Is the Bowl Championship Series a Cartel?

Last week the Justice Department sent a letter to the NCAA expressing concern that the Bowl Championship Series violates antitrust law. Justice asked a simple question: Why doesn't college football have a playoff? Today I asked an antitrust lawyer a less simple question: Does the Justice Department have a case?

1. The Case Against the BCS

"Serious questions continue to arise suggesting that the current Bowl Championship Series (BCS) system may not be conducted consistent with the competition principles expressed in federal antitrust laws," Assistant Attorney General Christine Varney wrote to the NCAA.

The BCS is essentially an arrangement among six conferences to reserve space in the lucrative end-of-year bowl games, which confer about $100 million to participating teams each year. Only two non-conference teams get a shot at the eight-digit reward from appearing at a BCS game. But the burden of proof is on the Justice Department to prove that the conferences collude to prevent the NCAA from holding a playoff that would benefit worthy teams.

"Here's how an antitrust lawyer would look at it," said Dale Grimes, an antitrust lawyer at Bass, Berry & Sims. "If each conference would be better off individually to have a playoff system, but they've agreed to hang together to protect their interests collectively, that's a cartel."

What's the chance the DoJ brings a lawsuit against the BCS? "The percentage has considerably increased with this letter from the assistant attorney general," Grimes responded. "I would give it at least a 50-50 chance."

2. In Defense of the BCS

"The schools from the nonautomatic qualifiers have had more access to the top-level bowl games than ever before, all because of the BCS," argues Bill Hancock, the executive director of the Bowl Championship Series. "If it all falls apart, (outsider schools like) Boise State will be a huge loser both in terms of revenue and access."

Grimes agrees that BCS has a reasonable rebuttal. The major conferences have helped create the lucrative bowl system that is now under attack. Today each bowl has a sense of finality, which raises its status among promoters. A playoff could make some bowl games less valuable by demoting them to the level of a quarterfinal.

"The BCS could argue that the bowls aren't what antitrust lawyers call an 'essential facility,' like a railroad across the Mississippi, because there are other bowl games that other conferences can promote," he said. "They'll say: We created the value of these bowl games, and we're entitled to reap the rewards."



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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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