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The Lawsuit That Changed College Athletics
by Chris Coleman, TechSideline.com, 8/5/05

Back in 1984, the world was in the middle of the Cold War, and the United States was running an arms race with the Soviet Union. The winner would emerge from the Cold War as the most influential, most powerful nation in the world. At the same time, the United State Supreme Court was making an important decision that would lead to another arms race, this time in the world of college football.

This was the time when college football wasn’t considered to be a big business. Old schoolers considered college football to be an outlet to promote the name and educational values of the universities, not to make money or send a lot of players to the NFL. Sure, making a little cash off of the sport was great, but that wasn’t its purpose.

The NCAA had control of just about everything in college football. The two most powerful forces that move college football today, television contracts and bowl tie-ins and revenue, were squarely in the hands of the NCAA. By the late 1970s, the thought process of the NCAA had not progressed as quickly as that of the university athletic departments, which saw college football as a potential cash cow, even more than it already was.

The problem for the athletic departments was that the NCAA was standing directly in their path and refused to budge. The NCAA, which controlled the college football television contracts, had a policy of allowing each school only one or two television games per year. There were a couple of reasons for this. Number one, it created more parity in college football. The big dogs with huge fan bases would have trouble further separating themselves from the pack if they didn’t have more television games.

The second, and dumbest, reason was to protect attendance at college football games. The NCAA figured that if games were on television, people would just stay home and watch from their couches, which would hurt gate receipts.

“We’re trying to protect you,” the NCAA said to the schools.

“Thank you,” replied the schools, “but we can protect ourselves.”

And that’s exactly what they did in 1977. The ACC, Big Eight, SEC, SWC and WAC, plus Notre Dame and Penn State, joined together to form the College Football Association. They hired Charles M. Neinas, the commissioner of the Big Eight Conference, as their director.

While it’s not accurate to say that this group split off from the NCAA, they definitely got fed up with some of the NCAA’s policies, and in 1981 they signed their own television deal with NBC. The deal was worth $180 million over four years, beginning in 1981.

The problem? The NCAA announced their own television deal at just about the exact same time. The August 15, 1981 edition of The NCAA News tells us that the NCAA signed a contract with ABC and CBS that paid $263.5 million. They also had a supplementary contract with TBS, a fledgling cable channel, that paid $17.6 million. That’s three networks, $281 million. That’s a tremendous amount of money, especially for the time period. The NCAA’s new television deals were set to begin with the 1982 season. So now college football had two different television deals, with CFA members technically a part of both deals. What a mess.

Naturally, the NCAA wasn’t about to take this lying down, and they declared that any college that took part in the CFA’s deal was eligible to be banned from championship events in every sport.

That’s harsh, but by this point the NCAA was thrashing in the water, desperately trying to grab ahold of something to pull them back ashore. In my view, the idea that the NCAA cared deeply about the amateur athlete was put to rest by this threat. The NCAA was actually threatening that any team, such as the Duke women’s soccer team, the Boston College rowing team, or the UNC basketball team, could not compete for the national championship because of college football television contracts, something those 19 and 20 year old kids had no control over. That’s not exactly what I would call setting a good example.

However, the move by the NCAA worked. The majority of the CFA member institutions refused to ratify the CFA’s television agreement out of fear of punishment by the NCAA. Thus, the CFA and its members were stuck with the NCAA television contract.

At this point, it looked like the NCAA had won the battle, but Oklahoma and Georgia, at the request of the CFA and on behalf of its 61 members, and backed financially by the CFA, sued, saying that the NCAA was acting as a monopoly. The case centered around property rights in televised college football. The lawsuit later evolved to where it was based on anti-trust charges.

Oklahoma President William Banowsky testified in court that his school could potentially earn several million dollars per year from their own television deals, although he could not back that statement up with hard evidence. It’s not clear how much Oklahoma made as a result of payouts from the NCAA, but Virginia Tech was making about $750,000 per year, so it’s a good bet that the Sooners were earning less than the several million dollar estimate provided by President Banowsky, given that the NCAA restricted appearances.

In all of the courts to hear the case, the basic findings were unanimous. According to Judge Juan G. Barciaga of the Oklahoma City Federal Courts, the NCAA was acting like a “classic cartel.” Barciaga, along with the U.S. Court of Appeals and eventually the United States Supreme Court, all decided in favor of Oklahoma and Georgia.

The case lasted from the early fall of 1981, when the lawsuit was first filed, to the summer of 1984, and was perhaps the most important event in the forming of the college football landscape that we know today.

Since the Supreme Court’s 1984 ruling, the college football television packages started to look more like today’s versions. The first notable change was that more games were televised. Since more games were televised, the value of each game decreased. However with this type of deal, the big time programs of college football were able to further separate themselves from the smaller schools. Now, Alabama didn’t have to play the same amount of TV games as VMI just for the sake of parity. Alabama would stay on top, and VMI dropped off the face of the earth.

At first the CFA negotiated the new television deals, but eventually the schools and conferences grew tired of this kind of control as well. Notre Dame left the CFA in 1991 to sign a deal with NBC, and the SEC bailed out in 1994 to sign a contract with CBS. After Notre Dame and the SEC showed that they could fend for themselves on the business side of things, the CFA dissolved. It no longer had any reason to exist.

With the Supreme Court’s ruling on television contracts, it was now time to fight over rights to bowl games. As it turned out, it wasn’t much of a fight. The NCAA received legal opinions two years after the 1984 Supreme Court case that told them there was no way they could keep control over the bowl games. Just like that, the conferences were free to gobble them up. And once again, more money for the Alabamas of the world, and less for the lower tier teams, as well as those teams without a conference. Like Virginia Tech.

The Hokies were fighting to keep their head above water under athletic director/football coach Bill Dooley. And pretty soon, the athletic department started bleeding cash. Not only did donations stop coming in because of some questionable decisions by Dooley, but the Hokies started getting less and less money from televised games. They weren’t in a conference, and didn’t have the media appeal of the bigger name programs. Virginia Tech was getting left behind, as well as a few dozen other schools like Tech. And that’s exactly what schools like Oklahoma and Georgia wanted.

You know the story after that. Virginia Tech received an invitation to the Big East and joined that conference for football. There was access to bowl money and television revenue. The Hokies were finally in a position to make their mark on college football. All they needed was to start winning, and that’s what they did. Now, just 20 years later, the Virginia Tech athletic department is making more money than any of us could have ever dreamed. And it doesn’t look like it’s going to stop anytime soon.

The aftershocks of this quake upon the college football world still rumble from time to time. Conference expansion has been a direct result. The Big Eight became the Big 12, the SEC moved to 12 teams at one point, and now the ACC has expanded. It’s all a part of the larger effort to maximize revenue, which the schools and conferences now have the power to do thanks to the Supreme Court decision.

The vast majority of bowl contracts expire following the 2005 season. The ACC, thanks to the prestige that they have gained by adding Miami, Virginia Tech and Boston College, will now have eight bowl tie-ins instead of six. If the NCAA was still in charge, this wouldn’t be the case. There probably wouldn’t be enough bowls to give one conference eight tie-ins.

Football practice starts in Blacksburg Friday afternoon. The Hokies are going to be a preseason top ten team, and defending ACC Champions. Some think that VT has what it takes to make a run to Pasadena. It’s going to be a fun year. At some point this season, perhaps if the Hokies are beating Miami in Lane Stadium, think about the situation in the 1980s when Tech almost got left out to dry permanently, and how different things would be today if that had happened. It will probably make you enjoy the moment even more.

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