Inside the Supreme Court case that changed college sports forever

Andy Coats loves telling his classes about it. It’s one thing to teach antitrust law. It’s quite another to tell his Oklahoma students there once was a case, one that went all the way to the Supreme Court, that involved the school they attend — and it was about football.

Then Coats, almost 90 years old and still sounding as sharp as he was half his life ago, looks at his students and makes the big reveal.

“I’m the guy who screwed up college football,” he says.

Oklahoma, where the law school building is named after Coats, officially joined the SEC with Texas on Monday. When announced three years ago, SEC expansion set off a wave of realignment that changed the complexion of college athletics.

It was about the chase for television money. And it happened because nobody is in charge: The NCAA is powerless to tell conferences what to do. The conferences and schools are free to chase all the TV dollars, and in turn the courts and lawyers are free to demand the players get their fair share, their name, image and likeness money, their unlimited transferring.

It all stems from one lawsuit, 40 years ago, when Oklahoma — joined by Georgia, long before they became conference mates — teamed up against the NCAA to challenge its stranglehold on television rights. When it ended, the NCAA lost control of football, and the financial floodgates opened.

It was the case that changed everything.

The way it was

The NCAA predated television. That made it easy for Walter Byers.

The first televised football game was in 1938, when a University of Pennsylvania game was broadcast to six other television sets at labs in Philadelphia. As television caught on, Byers, who became executive director of the NCAA in 1951, simply added TV rights to the NCAA’s area of control, giving it the power to negotiate contracts and determine which games were televised. And for NCAA members to be in good standing, they had to agree to the NCAA’s rules.

The NCAA had three official objectives regarding football on television, per a handbook of the NCAA Television Committee, located in the archives at Georgia’s special collections library:

1. To reduce, insofar as possible, the adverse effects of live television upon football game attendance.
2. To spread television among as many NCAA member colleges as possible.
3. To provide football television to the public to the extent compatible with the other two objectives.

Essentially, the NCAA wanted the bigger brands to take less for the greater good. This NCAA handbook, published in 1982, noted that those plans “remained remarkably similar as to their essential features over the past 30 years.”

But discontent among the bigger brands had been brewing for years. The top schools complained that they weren’t on television enough. They were the ones pulling in the viewers, yet everything was shared equitably by NCAA member schools. And by the late 1970s, there was more financial pressure: Title IX, which passed in 1972, pushed schools to add women’s teams, driving costs up. Big schools saw the NCAA’s television deals as an untapped source of revenue.

There was also the NCAA’s rule that limited teams to one or two national games per year, and then only one more regional game. During the 1981 season, No. 1 USC beat No. 2 Oklahoma in a classic, down-to-the-wire game … and it was only a regional telecast. Ditto for the 1966 classic between No. 1 Notre Dame and No. 2 Michigan State, which ended in a 10-10 tie. In 1980, when Georgia won the national championship, it was on national television only twice, with one regional appearance.

There were so few games on broadcast television that many stadiums didn’t even have lights because day games were better for attendance, remembered television executive Kevin O’Malley.

The NCAA package reached its high point in 1976 before steadily declining through 1982. It had control of everything, often to the detriment of the viewer. NFL ratings, meanwhile, had gone up.

“You had one or two games on television whether you liked the teams or not,” Chuck Neinas said. “We just wanted to open up the market.”

Neinas, the former Big Eight commissioner, was put in charge of the College Football Association, a collection of football-playing schools comprising most of what is now the SEC, Big 12 and ACC, along with Notre Dame and several others. They lacked power within the existing NCAA structure, where it was one school, one vote, giving power to schools without big-time football. The Big Ten and Pac-12 schools also resisted joining, partly out of solidarity with the NCAA and partly out of fear of Byers.

“You didn’t want to cross Walter Byers; he’d find some way to put you on probation,” Coats said. “He’s the kind of guy who couldn’t take a joke. He was tough.”

Byers made that clear when the CFA negotiated a separate television deal for its members with NBC to begin in the fall of 1982. The NCAA had contracts with ABC and CBS for 1982-85 worth $263.5 million, and it had also agreed with TBS for $17.7 million in 1982 and 1983. The CFA deal with NBC was collectively for less than that but would have been split among fewer schools, and each CFA school would have been televised more. Neinas still considers the deal not happening one of the biggest disappointments of his career.

Byers warned schools that they would no longer be in good standing if they didn’t adhere to the NCAA’s television deal. For decades, fear of the NCAA had been enough to keep order. But when Byers vetoed the deal with NBC, that was it for some people.

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The case is brought

Georgia president Fred Davison was the chairman of the CFA. A veterinarian by training, he had been the school’s president since 1967 and didn’t feel the need to submit to the NCAA.

“My general feeling is that our people would be better able, taking everything into account, to run our business than would the NCAA,” Davison said in one of his depositions for the case.

Football would end up being Davison’s undoing at Georgia, as he was forced out amid the Jan Kemp scandal. But the television rights case was his greatest hour.

“He was the one of the few who had the courage to stand up to the NCAA,” Coats said. “And Bill Banowsky, the president of Oklahoma, just didn’t give a damn about anything.”

Oklahoma became the co-lead because of its faculty rep, Dan Gibbens, a member of the CFA television committee who convinced Banowsky to take on the case. Oklahoma’s board of regents agreed to do it provided they hired Coats and his partner, Clyde Muchmore.

And thus Georgia and Oklahoma joined together to file suit against the NCAA in September 1981. They filed in Oklahoma, because Coats and Muchmore were the lead lawyers, but every federal judge in the state had to recuse themselves because they’d gone to OU or worked there. The case ended up being sent to New Mexico, where judge Juan Burciaga was selected.

“Taking them on was a courageous thing,” Coats said. “I mean, people forget, the NCAA was like the mafia.”

Fred Davison was president of Georgia from 1967-86. (UGA Special Collections Library)

Byers and the NCAA fought back hard. The NCAA made itself clear in a letter: “It would seem that some major football institutions within the CFA wish to defy NCAA legislation because of the possibility of increasing their monetary rewards, even though their actions may be injurious to the overwhelming majority of other affected institutions, and even though such actions will be incompatible with their continued good standing as members of the NCAA.”

Neinas and others working for the CFA felt like outcasts when they attended NCAA conventions. But some coaches, such as Joe Paterno, would come up to them and whisper good luck. And a big name outside of football sent Neinas a supportive letter, which read in part:

“Knowing you as an experienced and outstanding field commander, I was certain that you could repel any attacks, counter attacks or guerilla approaches made by the NCAA and General Byers. … I am in total agreement that the NCAA has placed itself in a position where it is just not able to service the needs of intercollegiate athletics. — Bob Knight, Indiana”

To be fair, the NCAA did make a few moves in the direction of compromise, such as proposing schools get a veto of TV deals or have a voice in developing those deals. But it was far short of the conferences being able to do it themselves.

If the NCAA had simply negotiated a better deal, or allowed the CFA to proceed with its deal with NBC, the case would not have gone forward. Neinas and Coats won the case, but speaking decades later, they wish the NCAA had made a deal with them.

“We learned that NCAA stood for Never Compromise Anything Anytime,” Coats said. “We tried to make a deal with them every step of the way. We tried before the preliminary hearings, before the temporary injunction, we did after we won the trial, we tried after the (appeal). And we never could.”

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The rulings

Judge Burciaga was a U.S. military veteran who ran a “really firm” courtroom, as Coats recalled. The case began in June 1982 and took about a week. It included testimony from Byers, who Coats remembers as “strong and smart.”

Burciaga made his ruling that September, finding that the NCAA control over TV rights constituted a group boycott and an agreement to fix prices and restrict output, both illegal under the Sherman Act. He also invoked the “rule of reason,” established in Standard Oil Co. v. United States, which states that a business practice is illegal if it unreasonably restricts trade.

“The controls have not been shown to protect gate attendance, nor do they preserve a competitive balance among schools,” Burciaga wrote. “The only benefits for the plan go to the NCAA itself, and the less prominent schools whose games would not appear on network television in the absence of such controls. Consumer demand and the free market are sacrificed to the interests of the NCAA administration and its allies among the memberships.”

The CFA was free to pursue its deal with NBC. The football season had already started, so it planned for 1983.The NCAA appealed but lost in May 1983, as the U.S. Circuit of Appeals ruled 2-1 in favor of Georgia and Oklahoma. Again the NCAA appealed, this time to the U.S. Supreme Court, which agreed to take the case.

Coats had never argued before the Supreme Court. There was some pressure for Oklahoma to bring in lawyers who had, but Neinas stood behind him.

“Andy’s brought us this far, I’m gonna roll with him,” Neinas said.

They did suffer an early setback: Justice Byron White — the former Colorado football star — granted the NCAA a stay, meaning the NCAA’s contracts with ABC, CBS and Turner remained in effect until the court ruled.

White, given his background, had more sympathy for the NCAA and its notions of fairness. He was also “the only one who knew how to blow up a football,” remembers Kevin O’Malley, then a CBS television executive who attended the Supreme Court arguments.

During question-and-answer arguments, White said that antitrust law was never meant to apply to college athletics. Another justice sympathetic to the NCAA, William Rehnquist, asked Coats whether the NCAA was meant to be a profit-making organization.

“It wasn’t intended to be, but it certainly is,” Coats replied.

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That argument won out. The Supreme Court ruled 7-2 in favor of Georgia and Oklahoma, in a decision handed down in June 1984. Justice John Paul Stevens wrote the majority opinion:

“The court found that by fixing a price for television rights to all games, the NCAA creates a price structure that is unresponsive to viewer demand and unrelated to the process that would prevail in a competitive market. And, of course, since as a practical matter all member institutions need NCAA approval, members have no real choice but to adhere to the NCAA’s television controls.”

The majority closed with granting one tenet of the NCAA before finally swatting down its argument in this case:

“The NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports. There can be no question but that it needs ample latitude to play that role, or that the preservation of the student-athlete in higher education adds richness and diversity to intercollegiate athletics and is entirely consistent with the goals of the Sherman Act.

“But consistent with the Sherman Act, the role of the NCAA must be to preserve a tradition that might otherwise die; rules that restrict output are hardly consistent with this role. Today we hold that the record supports the District Court’s conclusion that by curtailing output and blunting the ability of member institutions to respond to consumer preference, the NCAA has restricted rather than enhanced the place of intercollegiate athletics in the nation’s life.”

The rise of ESPN helped spur college football’s growth on TV. (Jonathan Daniel / Allsport / Getty Images)

White, with Rehnquist, joining, had a cautionary, 17-page dissent. He wrote that the majority erred in treating the NCAA “as a purely commercial venture.” He also defended the NCAA’s deals, arguing that teams had the ability to compete with each other to be among the games televised. And he argued that the NCAA’s television plan did not suppress competition but regulated it — and by doing so promoted competition.

“Fundamentally, the plan fosters the goal of amateurism by spreading revenues among various schools and reducing the financial incentives toward professionalism,” White wrote, adding later: “It helps ensure the economic viability of athletic programs at a wide variety of schools with weaker football programs, and it promotes competitive football among many and varied amateur teams nationwide.”

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The aftermath

Everything changed, even if it took a while.

The CFA negotiated deals for its members until 1997, when the organization dissolved and relinquished negotiating rights to the conferences. And the money didn’t explode right away: O’Malley points out that the value of the CFA deal to each school didn’t equal what the NCAA deal would have been until 1992.

“What was happening was there was too much product,” said O’Malley, who went on to negotiate numerous college broadcast deals, including for March Madness and the BCS.

O’Malley believes college football would have become a lucrative property regardless of whether the NCAA or CFA won in court.

“The development of cable was kind of an inevitable force,” he said. “At the time of this series of court decisions, there was just ESPN and HBO, basically, and HBO was doing some boxing but other than that they were out of the sports business. And ESPN was doing Australian Rules Football and curling.”

By 1987, ESPN had Sunday Night Football. By 1990, both TNT and ESPN were on Sunday night, and the NFL was in business with five networks.

“There’s a general conception out there that the opening up of college football in 1984 was the key to all this. When in fact I think the opening up would have happened anyway because of the new alternatives of cable TV,” O’Malley said. “But one way or another it produced exposure for college football. And that was really, really good.”

Of course, the most tangible result of the case was the NCAA losing control of football, essentially, because it lost control of TV rights. The NCAA president isn’t in charge of college football. It’s not like pro sports where the buck stops with commissioners, even if they work for the owners.

That is what led to realignment, with television deals the most important draw for conferences. It ended the Pac-12 as we knew it. It led to the Big Ten and SEC being the two richest conferences, the Big 12 behind, and the ACC with a very uncertain future.

“The chaotic state of college athletics today was not in our vision,” Neinas said. “It is beyond any control.”

He was talking also about NIL and the transfer portal, which came into being after court cases and state legislation. And those happened in large part because of the money pouring into the sport, and an awareness that the players should share in it.

That’s partly why Coats doesn’t have regrets.

“When the conferences are making billions and the coaches and the universities are making millions they’re not going to make the young people play for $35 a month and I think that’s right,” Coats said. “But I think there should be some limitations on what they can make and how they can pay it and whether it can become a recruiting tool or not.”

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Neinas, even while bemoaning “the sad state of affairs,” also doesn’t regret winning.

“We opened up the marketplace for college football,” Neinas said. “College football is a great sport, but the NCAA held it back from being available to the general public.”

At its core, that’s what NCAA v. Board of Regents of the University of Oklahoma was about: It was an antitrust case. Seven Supreme Court justices who may not have known much about football saw it as that, and history has continued to show that the NCAA has trouble defending itself in court. But the results are messy.

Coats, after arguing the case but before the Supreme Court issued its ruling, found himself at a function with Justice White. They ended up walking out together.

“Andy, you may win the case,” White said, according to Coats. “But you’ll regret it.”

Coats thought for a moment.

“I never personally have regretted it,” he said. “But it did cause some significant problems.”

(Top illustration: Dan Goldfarb / The Athletic; photos; Getty; Vittoriano Rastelli / CORBIS / Corbis, Icon Sportswire, Tierney L. Cross / Bloomberg)