Full opinion text
MEMORANDUM OPINION BURCIAGA, District Judge, Sitting by Designation. THIS MATTER came on for trial to the Court on the merits on June 7 through 15, 1982. At issue is the legality of the controls exercised by the National Collegiate Athletic Association over the televising of college football games. The plaintiffs, both members of NCAA, allege that these controls violate the Sherman Antitrust Act, 15 U.S.C. §§ 1-2 (1980). Having considered the pleadings, evidence, briefs and memoranda submitted by the parties, the Court holds as follows: (1) The television football controls exercised by NCAA constitute an horizontal agreement among competitors to fix prices and restrict output, in violation of 15 U.S.C. § 1; (2) The controls constitute a group boycott, in violation of 15 U.S.C. § 1; (3) The NCAA exercises monopoly power over the market of college football television, in violation of 15 U.S.C. § 2; and (4) The plaintiffs are entitled to injunctive relief under the Clayton Act, 15 U.S.C. § 26 (1980). This memorandum opinion shall constitute the Court’s findings of fact and conclusions of law. I. Findings of Fact The parties to this case are the Board of Regents of the University of Oklahoma, the University of Georgia Athletic Association, and the National Collegiate Athletic Association. Plaintiff Board of Regents of the University of Oklahoma [hereinafter, “Oklahoma”] is the governing body of the University of Oklahoma. The Board is responsible for all of the operations of the University, including its intercollegiate athletic program. Oklahoma is a member in good standing of the National Collegiate Athletic Association, the defendant herein. Plaintiff University of Georgia Athletic Association is a non-profit corporation created under the laws of the State of Georgia. The Association has the responsibility of operating the intercollegiate athletic program of the University of Georgia. The University of Georgia is a member in good standing of the National Collegiate Athletic Association. The executive personnel of the University and the Athletic Association overlap. They shall be collectively referred to herein as “Georgia.” Defendant National Collegiate Athletic Association [hereinafter, “NCAA”] is a private non-profit association organized in 1905. NCAA consists of approximately 900 members. Membership is open to four-year institutions which meet certain academic standards. Allied and Associate membership is open to athletic conferences, associations and other groups interested in intercollegiate athletics. Oklahoma’s intercollegiate football program has, over the years, produced many outstanding and highly-ranked teams. Oklahoma is capable of attracting large national television audiences for its televised games. Football is the only sport sponsored by Oklahoma which actually generates revenue beyond the costs of fielding a team. The profits generated by the football team support all of the other sixteen men’s and women’s sports in which Oklahoma participates. In recent years, these programs have become more and more expensive to maintain due to increasing costs and the expansion of athletic programs for women. As a result, Oklahoma seeks to maximize its revenues from football television. Like Oklahoma, Georgia has compiled a record of outstanding success with its intercollegiate football program, and football is the major revenue-producing sport for Georgia. Budgetary pressures have forced cuts in Georgia’s athletic program, including the elimination of its intercollegiate wrestling program. Georgia also seeks to maximize the revenues generated from the televising of its football games. It is useful to present as background the history of NCAA and the football television controls it exercises. NCAA operates pursuant to a Constitution and Bylaws adopted by the membership and subject to amendment by the members. The Constitution, Bylaws, Executive Regulations and Official Interpretations are published in a printed manual and distributed to all members. The general policies of NCAA are established by the membership at annual conventions. When the annual convention is not in session, policy is established and directed by the NCAA Council of 22 members elected by the entire membership at the annual convention. NCAA has a professional staff located at its headquarters in Shawnee Mission, Kansas. Some 80 employees execute NCAA policy under the supervision of Executive Director Walter Byers. NCAA controls all forms of televising of football games of member institutions during the fall football season. NCAA has exercised such control since the early 1950’s. When television first became a significant part of America’s entertainment industry in the late 1940’s and early 1950’s, there were no controls on college football television. Each college was free to make its own contracts with television networks and stations without limitation. The University of Pennsylvania, for example, was televising all of its home football games in the Philadelphia area during this time. NCAA members expressed concerns to NCAA that unlimited telecasting of college football games might be detrimental in a number of ways. Chief among their concerns was the belief that uncontrolled televising of games would result in a decrease of live attendance at other games being played at the same time and in the same geographic area as the televised games being aired. The NCAA appointed a Football Television Committee to study and report on these concerns. The Committee retained the services of the National Opinion Research Center [hereinafter, “N.O.R.C.”] at the University of Chicago. Beginning in 1952, N.O.R.C. conducted a series of studies of the effects of televised college football on gate attendance of college football games. These studies were conducted through 1957, and tended to support the notion that televised college football resulted in a decrease in live gate attendance for the teams which were not being televised. On the basis of the first of these annual studies, the NCAA instituted the first controls on football television in 1953. Based on the N.O.R.C. studies, the Football Television Committee developed a program of controls. These controls included provisions that television exposures would be limited to one college football game per week on Saturday afternoons during the fall season, that no team would appear on television more than once per season, that the sponsors would select the games to be televised and that the revenues would be divided among the teams playing the game and the NCAA. From their inception, these controls were approved by a vote of the entire membership of the NCAA, including a good many members which did not even field a football team. Of some 800 voting members, less than 500 are schools which play football. Of these 500, only 187 are Division I schools. Schools in Division I dominate college football television. The NCAA Television Committee periodically circulated a questionnaire to NCAA members in order to obtain their suggestions as to what types of controls were desirable. A Plan was then developed by the Committee based on the desires of the membership as expressed in the responses to the questionnaires. The proposed Plan was then submitted to the membership for a vote by means of a mail referendum. Once approved, the Plan formed the basis for NCAA’s negotiations with the various networks. From 1952 until 1977, NCAA followed essentially the same procedure in contracting with the networks for the right to televise the football games of NCAA members. Beginning in 1977, the membership did not vote on the actual Plan. Instead, a number of “Principles of Negotiation” were distributed to and voted upon by the membership. While these “Principles” provided a general basis from which NCAA proceeded to negotiate with the networks, the evidence shows that substantial departures from these “Principles” have occurred without any form of prior approval by the membership. Until 1982, the contracts were always made with a single network, although all three of the major networks competed for the rights, and each has held those rights at one time or another. The length of the contracts was always either one or two years until 1977, when NCAA contracted with American Broadcasting Companies [hereinafter, “ABC”] for a four-year term covering the 1978 to 1981 seasons. ABC held the exclusive right to broadcast NCAA football at the network level from the year 1965 to 1981. The basic concepts of the original controls have survived to the present. The Plan is reviewed and changes in the Plan are made periodically to reflect the concerns of the membership. The most recent significant changes include: (1) Contracts with two national networks instead of only one beginning in 1982; (2) A supplementary series of games on cable television beginning in 1982; (3) Continuing increases in the number of games to be televised each season; (4) Continuing increases in the number of times any one school can appear during a given season; (5) Development of regional, as opposed to national, telecasts; and (6) Increased televising of games where circumstances warrant “exceptions” to the basic plan for a series of network telecasts. The Plan allows NCAA members a limited opportunity to televise their games other than on the network which had contracted with the NCAA. An example is the so-called “exception telecast,” where a member could obtain special permission from the NCAA to telecast a specific game within a limited area on a local station. Such telecasts are allowed only where no “appreciable damage” would result to schools playing games within the same geographic area and at the same time as the proposed telecast. Local “exception telecasts” bring far less to the schools in terms of rights fees than do network telecasts. NCAA claims that the controls on college football television are entirely consistent with, and are logical extensions of, the organic documents of the Association. However, before 1971, neither the Constitution nor the Bylaws of the Association made any mention of NCAA control of college football television. Prior to that time, the source of the Television Committee’s authority was annual resolutions of the membership. These resolutions were allegedly passed pursuant to a 1952 amendment to the Constitution which added the following provision to the “Purposes” section of the Constitution: To legislate through bylaws or by resolution of a Convention upon any subjects of general concern to the members in the administration of intercollegiate athletics. In 1971, NCAA finally added to its Bylaws a statement of its power to control college football television. Bylaw ll-3-(aa) was adopted at that time and reads, in pertinent part: The [Football Television] Committee shall be responsible for the formulation and administration of the Association’s football television policy and program, subject to the approval of the membership. In addition to the controls exercised by the NCAA over football television, NCAA legislates on a number of other aspects of college football. Playing rules, standards of amateurism, regulation of the recruitment of athletes, standards for academic eligibility, and certification of bowl games involving NCAA members have long been a part of the regulatory scheme developed by NCAA to govern college football. NCAA also regulates other college sports. Significantly, however, football is the only sport in which NCAA has taken unto itself the power to regulate the televising of college athletic events. The schools are free to make whatever arrangements they desire for televising regular season games in all sports except football, subject only to some restraints imposed by the various athletic conferences. The only other NCAA sport which attracts national television coverage for regular season games is basketball. The NCAA does not control the televising of regular season basketball games. Television arrangements are made by the schools themselves, or by the athletic conferences of which they are members. College basketball games are frequently televised on local stations and cable networks, in addition to national network broadcasts on weekends. While NCAA argues that the free market situation in television basketball bears no relation to that to be expected in a free market for televisiorf football, the Court considers the market in television basketball to be persuasive evidence of how a free market in television football would operate. NCAA’s attempt to distinguish basketball from football are unavailing. Partly out of dissatisfaction with different aspects of the NCAA regulations governing college football, a number of major football conferences and independent schools, all members of NCAA, banded together to form the College Football Association [hereinafter, “CFA”]. Both Oklahoma and Georgia are members of CFA. CFA consists of five of the major football-playing conferences — the Big 8, Southeastern, Southwestern, Atlantic Coast and Western Athletic Conferences — and major football-playing independents such as Notre Dame, Penn State, Pittsburgh, and the service academies. The only major football-playing schools which are not CFA members are the members of the Pacific 10 Conference and the Big 10 Conference. Membership in the CFA is restricted to football-playing schools meeting certain standards of size and importance. The original purpose of the CFA, which is itself a member of NCAA, was to lobby and promote the interests of major football playing schools within the NCAA structure. Beginning in 1979, however, CFA members began to feel that those colleges with major football programs should have a greater voice in the formulation of football television policy than they had in NCAA. CFA members evidently disliked the fact that all NCAA members had an equal vote on issues involving football television, even though a great many members either did not play football or were otherwise not directly affected by the particulars of the football television contracts. CFA then began investigating the possibility of negotiating an agreement of its own with the networks for the broadcast rights to games involving CFA members. As a result of these efforts, CFA developed an independent television plan and received a contract offer from the National Broadcasting Company [hereinafter, “NBC”]. This occurred in spite of the ongoing negotiations between NCAA and ABC and Columbia Broadcasting System [hereinafter, “CBS”]. NCAA, having learned of the CFA effort to negotiate football television rights on behalf of its members, was not long in responding. The members of CFA had adopted the position that nothing in the NCAA Constitution or Bylaws empowered NCAA to act as the exclusive bargaining agent on behalf of all of its members for the sale of television rights to college football games. In response to the CFA’s activities, the NCAA Council adopted the following “Official Interpretation” of Bylaw 11-3-(aa) on April 18, 1981: The Association shall control all forms of televising of the intercollegiate football games of member institutions during the traditional football season as defined in O. I. 307. The terms or principles of the control shall be set forth in a television plan or program which periodically shall be prepared by the Football Television Committee, approved by the NCAA Council for submission to the membership by a mail referendum and approved by at least two-thirds of the members voting, a procedure which has been followed by the NCAA membership on a regular basis for approximately 30 years. Any commitment by a member institution with respect to the televising or cablecasting of its football games in future seasons necessarily would be subject to the terms of the NCAA Football Television Plan applicable to such season. This broad interpretation of the 1971 amendment was the first clear statement of NCAA’s position that membership in NCAA was essentially a grant by the member to NCAA of the right to act as the school’s agent in negotiating football television rights fees. It was also NCAA’s first specific statement that it controlled “cablecasting” as well as broadcasting. As if in recognition of this fact, the NCAA leadership proposed an amendment to the Bylaws which reads substantially the same as the “Official Interpretation” quoted above. That amendment was adopted by the NCAA convention in January, 1982. Again, all NCAA members, including many which do not play intercollegiate football, were allowed an equal vote in the adoption of the amendment. In spite of the NCAA Council’s interpretation of the 1971 amendment, CFA continued its efforts to negotiate a separate contract. On June 5, 1981, the CFA adopted its own television plan at its annual convention. CFA members rejected the NCAA’s purported right to bargain on their behalf and authorized the CFA administration to seek a separate contract for the television rights to football games involving CFA members. On August 8, 1981, CFA did contract with NBC for the rights to televise the football games of CFA members for the 1982 through 1985 football seasons. The CFA-NBC contract contained the same types of provisions which had long been found in the agreements negotiated by the NCAA. However, the NBC contract would have been more lucrative to the members of the CFA than the current agreements between the NCAA and CBS and ABC. The number of appearances allowed each team per season was more liberal than that allowed by the proposed NCAA contract, and the fees to be paid to participating schools would have resulted in a larger television income per school than the current NCAA contract. This contract was ratified by a vote of CFA members at a special meeting in Atlanta on August 21, 1981. Thirty-three members voted in favor of the contract, 20 voted against, and 8 did not vote. This vote did not make the contract binding, however, because CFA members could still elect to opt out of the contract by written notice to that effect before September 10. After that date, NBC had the right to rescind if any of the CFA members chose to opt out of the agreement. During the time that the CFA was arranging for the contract and its members were deciding whether to join in the agreement with NBC, high officials of the NCAA were making public statements to the effect that CFA members, if they chose to go with NBC, would be in violation of NCAA rules. Further, it was indicated that the NCAA’s retaliation would be swiftly forthcoming. Walter Byers, NCAA’s Executive Director, and Thomas Hansen, NCAA’s Assistant Executive Director, stated that the NCAA administration would seek expedited disciplinary procedures against offending CFA schools. NCAA President James Frank and the distinguished Professor Charles Alan Wright, Chairman of the NCAA Infractions Committee, made clear that CFA members which chose to be bound by the NBC contract would be in violation of NCAA legislation and that such an infraction was punishable under NCAA’s rules. It was also made clear that sanctions would be forthcoming, and would affect not only the football programs of CFA members, but other sports as well. These events led directly to the initiation of this lawsuit. One reason for the filing of the action was to obtain temporary relief preventing NCAA from initiating disciplinary proceedings or otherwise interfering with CFA’s efforts to complete its agreement with NBC. Injunctive relief was granted on September 8, 1981, and has continued in effect to the present. Although the defendant has complied with the Court’s order not to interfere, the plaintiffs and CFA were unable to consummate their agreement with NBC. On the final extended deadline for CFA members to opt out of the NBC contract, few CFA members were willing to commit. Consequently, CFA advised NBC that it was unable to provide an adequate inventory of teams, and the arrangement was terminated. NCAA contends that the CFA schools’ unwillingness to go with the NBC contract was based on sound business considerations. However, the evidence is clear that the threat of NCAA sanctions, ranging from reprimand to expulsion, being imposed at some point in the future was a major consideration in the decisions of many CFA members to opt out of the NBC contract. While we cannot know what factors were telling in the decision of any particular college, it is clear that they were unable to exercise fully independent business judgment due to the threat of NCAA sanctions, in spite of the temporary equitable relief granted in this case. The dispute between the plaintiffs and the defendant continued both in this Court and in the forums provided by the NCAA. NCAA held two conventions of its entire membership in which a number of the matters raised in this lawsuit were addressed by the membership. A Special Convention was called in December, 1981, at the request of members of the CFA. This Convention was called to deal with restructuring the NCAA. NCAA member schools are divided into several divisions according to the size of the institution and its intercollegiate athletic program. Division I consists of about 275 colleges and universities with major athletic programs. Divisions II and III include some 500 institutions with less extensive athletic programs. Less than 190 of the 275 Division I schools play football. For purposes of football, Division I has been split into two subdivisions, I-A and I-AA. One of the complaints of CFA members was that Division I-A included many schools whose football programs were much less extensive than those of CFA members, most of which are Division I-A schools. Many CFA members believed that their interests and those of schools with relatively minor football programs were not consistent and that Division I should be restructured to reduce the number of schools in Division I-A. The concerns of the CFA members were addressed at the Special Convention held in December, 1981, though not necessarily to the satisfaction of all involved. Several CFA members had proposed the creation of a new Division IV composed solely of major football-playing institutions. This proposal was ultimately rejected by the NCAA membership. However, another proposal was adopted which reduced the number of schools in Division I-A from 135 to about 95. Notably, most CFA members, including the plaintiffs, favored an even more far-reaching restructuring. At the Annual Convention held in January, the NCAA membership considered a number of proposals directly relating to football television. Several CFA members proposed resolutions which stated that membership in the NCAA could not be conditioned upon the granting to NCAA of the power to place controls on college football television. This proposal was defeated. Instead, the membership adopted an amendment to the Bylaws which purported to establish the propriety of the NCAA controls, ratified the “Official Interpretation” of the NCAA Council to which the Court has previously referred, and ratified the NCAA’s actions concerning televising college football for the 1982 through 1985 seasons. In addition, minor changes were made in the manner in which future television plans for college football would be developed. Having provided a history of NCAA’s activities in marketing football television rights, the Court will now turn to the specific aspects of NCAA’s controls. The contracts which were made for the 1978 through 1981 and the 1982 through 1985 seasons are the most relevant to the issues raised herein and will therefore be discussed in detail. One matter must be resolved before examining the controls. The defendant insists that membership in NCAA is voluntary. That being so, says the defendant, the plaintiffs are free to withdraw, thereby ridding themselves of the NCAA controls of which they complain. It is true that membership is voluntary in the sense that a member institution may withdraw from NCAA at any time. However, it is clear from the evidence that an institution which withdraws or is expelled from the NCAA could no longer operate a fully-rounded intercollegiate athletic program. Non-member institutions could not compete in the prestigious NCAA championship events in such sports as baseball, basketball, track, swimming, wrestling and gymnastics. They would therefore be unable to recruit quality athletes into their programs. Its football team could not play on television against members of the NCAA. As a practical matter, membership in the NCAA is a prerequisite for institutions wishing to sponsor a major, well-rounded athletic program. Moreover, as shall be discussed below, withdrawal or expulsion from NCAA subjects the non-member to a group boycott, and forces the non-member to attempt to compete against a monopolist. The Court must conclude that NCAA membership is not voluntary for these plaintiffs, or for many other colleges and universities for which athletic excellence is an institutional priority. Many witnesses offered opinions as to the viability of developing a rival organization to NCAA.. The estimates of the number of schools necessary to form a rival group ranged from fifteen to one hundred and fifty. The Court concludes that the formation of a rival organization is neither practical, feasible nor desirable. The Court is persuaded that the number of schools needed to form such a group is prohibitively high. NCAA’s functions range from developing the rules of play in college athletics to the sponsoring of national collegiate championships in all major sports except football. NCAA has an annual budget of about $20 million. It maintains a large staff, and an expansive system of committees to carry out its functions. It is clear to the Court that the plaintiffs do not have the option of recruiting schools and forming a rival organization to NCAA. This conclusion is buttressed by the express desire of both plaintiffs to remain members of NCAA. The defendant suggests that it is disingenuous for the plaintiffs to agree to comply with certain NCAA rules, while challenging other aspects of the NCAA regulatory program in a court of law. NCAA suggests that plaintiffs’ motive in bringing this suit is born of spite due to their inability to persuade the NCAA membership that the television controls should be relaxed. The Court finds little basis to these allegations. The plaintiffs challenge only those aspects of the NCAA regulatory program which they believe violate the antitrust laws and cause them antitrust injury. The plaintiffs make clear that they believe that NCAA has an important role in regulating such matters as the rules of play, standards of amateurism and academic eligibility. For the plaintiffs to support and abide by those aspects of NCAA regulation which do not relate to football television in no way undercuts or shades the merits of their antitrust allegations. Finally, it is suggested that NCAA and college sports generally should be viewed as somehow different; that maximization of revenue introduces an unseemly air of professionalism into college sport and higher education generally. But it is cavil to suggest that college football, or indeed higher education itself, is not a business. The colleges of the nation are in competition for students, for faculty, for government grants, and for philanthropic support. It is a big business and millions of dollars are involved. The same is true of college football. It is a business, and it must behave in a businesslike manner to insure its future viability. The objectives and the past achievements of our institutions of higher learning have earned them great praise and an exalted position in our social fabric. Nonetheless, it is a business and a business operated by professionals. Like any business, the schools which play intercollegiate football seek to maximize revenue and minimize expense while at the same time maintaining the level of quality which makes their product attractive to the buying public. Our society encourages maximization of revenue so long as the means are legal. The Court, therefore, cannot condemn the plaintiffs’ desire to maximize revenue. NCAA’s suggestion that profit maximization is not a worthy goal is truly disingenuous in light of the fact that the express purpose of NCAA’s television controls is to maximize the football revenues of member schools. Under the NCAA’s plan for the 1978 through 1981 seasons, ABC held the exclusive right to televise college football on the network level. For this right, ABC paid a so-called “minimum aggregate fee.” A part of this fee, some 8% of the total, went directly to the NCAA to help fund certain of its activities. A specified dollar amount was then reserved for the fee to be paid to the teams participating in NCAA Divisions II and III football championships. Under the terms of its contract, ABC was required to televise these championship contests. The teams which participated in games broadcast by ABC received a fee from ABC for the right to televise those particular games. The remainder of the minimum aggregate fee was divided among the schools which appeared on ABC’s weekly college football telecast. In order to comply with the contract, the total of the fees which ABC paid to the teams playing televised games had to equal at least the set minimum aggregate fee for that year, minus that part of the fee going to NCAA and the schools playing in the Division II and III championships. In essence, ABC was paying a certain sum for the right to be the exclusive carrier of NCAA football on the network level. That sum was divided among the teams which appeared on ABC during the course of any given season. The particulars of how that sum was to be divided among the schools were not spelled out in the contract. However, the NCAA Football Television Committee, throughout the term of the contract, made “recommendations” to ABC as to how much should be paid for each regional telecast, and how much should be paid for each national telecast. ABC always implemented these “recommendations,” and at no time did ABC pay any more or any less than the amount “recommended” by NCAA. Once ABC had decided to televise any particular game, it would notify the host team of its decision. Up through the 1980 season, ABC would send a telegram and “require” confirmation of the school’s acceptance of the rights fee which had been established. Beginning in 1981, ABC would only “request” confirmation. However, it is clear that negotiation of the rights fee was not anticipated, nor would it have been tolerated. For example, in 1978 ABC was obligated under the contract to pay a “minimum aggregate fee” of $29 million. By letter dated April 10, 1978 (PL Ex. 18), Thomas Hansen, NCAA’s Television Program Director, “suggested” the following distribution of the $29 million. Seven hundred fifty thousand was earmarked for the rights fee to the Division I-A playoffs, and $670,000 for the Division II and III playoffs. Another $165,000 was set aside for regular-season telecasts of Division II and III games. Under the contract, ABC was also awarded the right to televise five NCAA championship events in sports other than basketball and football. Two hundred fifty thousand was set aside for that purpose. This left a total of $27,165,000. NCAA then took eight percent of this amount as its share, or some $2,173,200. This left $24,-991,800 to be divided among the Division I teams appearing on ABC during the 1978 season. Under the contract, ABC was to televise 13 games nationally, and 45 on a regional basis. Mr. Hansen then “worked various combinations” until he reached prices for the regional and national telecasts which, when multiplied by the scheduled number of each type of telecast, equalled the balance of the “minimum aggregate fee.” Hansen “recommended” that ABC pay $533,600 for each national game, and $401,222 for each regional game. Multiplying $533,600 by 13 yields $6,936,800, and 45 times $401,222 equals $18,054,990. The sum of these figures is $24,991,790. This method of determining prices was employed throughout the 1978-1981 seasons. The testimony of network officials establishes that for the years 1982-1985, the networks will employ the same method of determining rights fees, and that neither ABC nor CBS will pay any more than the “minimum aggregate fee.” (See Table Summary below for key provisions of contracts.) TABLE SUMMARY OF NCAA-NETWORK CONTRACTS 1978-1985 Year Number of Minimum Exposures Aggregate Fee Total Price per Price per Commercial Exposure Commercial Minutes Minute 1978 23 $29,000,000 506 $1,260,860 $57,312 1979 23 $29,000,000 506 $1,260,860 $57,312 1980 24 $31,000,000 506 $1,291,660 $61,264 1981 24 $31,000,000 506 $1,291,660 $61,264 1982 28 $59,000,000 728 $2,107,140 $81,043 1983 28 $64,000,000 728 $2,285,710 $87,912 1984 28 $68,500,000 728 $2,446,420 $94,093 1985 28 $72,000,000 728 $2,571,420 $98,901 Another key feature to the NCAA-ABC contract was a limitation on the number of times any one team could appear on ABC over a certain time period. Under the contract, a school could appear no more than five times over the course of two seasons. A school could televise on stations other than ABC, but only under certain very limited conditions. The “exception telecasts” had to receive prior approval from NCAA. If a school could show that its proposed telecast met all of the prerequisites, NCAA had no discretion as to whether to approve the telecast. A school was allowed to have its game telecast only if all of the tickets for the game had been sold or if the game was to be played more than 400 miles from the school. If these preliminary criteria were met, the school was then required to show that the broadcast would not be shown within a certain distance of any other college football game being played at the same time as the game to be telecast. (For broadcast on a UHF station, the distance limit was 45 miles; for VHF, 120 miles.) The only exception to this rule was that if the other games being played within the distance limitation were sold out, then the broadcast would be allowed. The number of “exception telecasts” has increased over the years. However, many more games would have been broadcast locally were it not for the cumbersome requirements and procedures entailed in applying for an “exception telecast.” All of the restrictions noted herein applied only to schools in Division I. Division II and III schools are allowed unlimited freedom in televising their regular season games. The NCAA makes much of the fact that under the terms of the contract with ABC, member schools were allowed to negotiate with ABC for the rights fee to be paid for any particular game. This so-called right to negotiate was clearly illusory, however. The practical effect of granting exclusive rights to ABC was to create a monopsony; that is, a situation in which there is only one eligible buyer in a product market. The school could not sell the rights to CBS or NBC, unless it was willing to flaunt the NCAA plan. Such a course would violate NCAA rules and subject the school to the disciplinary proceedings which would certainly follow. As an example, suppose Oklahoma and Georgia had a game scheduled in the fall of 1981. Both teams were highly regarded by the national media, and with their tradition of excellence, the game would have attracted a great deal of national attention. ABC would have undoubtedly wanted to televise this game. If the schools balked at the figure offered by ABC (that is, the figure “recommended” by the NCAA Football Television Committee), ABC had two options. First, ABC could have actually negotiated with the two schools and arrived at a higher figure. Second, and the more likely result, ABC could tell the schools to either take it or leave it. ABC had an almost unlimited choice of other games it could televise in which the teams would accept the fee established by NCAA. The pernicious aspect of the plan was that Oklahoma and Georgia would have no alternatives available to them, save the far less lucrative “exception telecast.” ABC would realize that the schools could not sell the rights to another network and, therefore, would be unconcerned about the possibility that the game they ultimately chose to broadcast would appear at the same time another network was broadcasting the Oklahoma-Georgia game. A clear example of the failure of the rights fees paid to respond to market forces occurred in the fall of 1981. On one weekend of that year, Oklahoma was scheduled to play a football game with the University of Southern California. Both Oklahoma and USC have long had outstanding football programs, and indeed, both teams were ranked among the top five teams in the country by the wire service polls. ABC chose to televise the game along with several others on a regional basis. A game between two schools which are not well-known for their football programs, Citadel and Appalachian State, was carried on four of ABC’s local affiliated stations. The USC-Oklahoma contest was carried on over 200 stations. Yet, incredibly, all four of these teams received exactly the same amount of money for the right to televise their games. There is no dispute as to the fact that, but for the NCAA contract, no broadcaster would be willing to pay the same amount for the Citadel-Appalachian State game as they would pay for the USC-Oklahoma matchup. The fees paid were exactly the amount which had been approved by NCAA. Had Oklahoma and USC attempted to negotiate a higher fee, they would have been able to do so only from a position of weakness. Because the schools had lost their right to sell the rights to a competitor of ABC, ABC had little if any incentive to actually negotiate the rights fee. If the schools had refused to accept the price established by NCAA and ABC, they faced the very real and unpleasant prospect of not having the game televised at all. This would have cost the schools both a great amount of money as well as the publicity and prestige which accompanies a network broadcast of a game. Moving to the contracts which are in effect for the 1982 through 1985 football seasons, there is little indication that the situation will be any different. The new contracts do, for the first time, provide for multiple network broadcasts. Both ABC and CBS now have the right to broadcast NCAA football games. Each network has agreed to pay a minimum aggregate fee of $131,750,000 over the next four years. In addition to the broadcast network contracts, NCAA entered into a contract with Turner Broadcasting System, Inc. [hereinafter, “TBS”], for the exclusive live cablecasting of NCAA football games. TBS will pay a minimum aggregate fee of $17,696,-000 over the next two years. NCAA argues that because it invited bids from all three of the major broadcast networks, it has met the Sherman Act’s requirement of open competition. However, the evidence supports the opposite conclusion. The fact that both ABC and CBS will pay an identical price for identical packages leads the Court to conclude that there was no true negotiation. NCAA substantially dictated the terms under which both networks could televise NCAA football. The networks were offered a take-it-or-leave-it proposition. A truly free market would not have yielded the identical prices and packages which result from the contracts. The basic features of the previous plans remain intact. While the contracts themselves appear to provide for competition between the two networks for the right to televise any particular game, the so-called “ground rules” developed by NCAA for the two-network plan eliminate any possibility of competitive bidding between the networks. This much is effectively undisputed. Representatives of the networks and of NCAA have made clear in recent months in their statements to concerned NCAA member schools that competitive bidding for game rights is not contemplated under the new contracts. Instead, the “ground rules” will again produce a monopsony situation in which a single network will have exclusive television rights to any given game. The “ground rules” will operate in the following way. Before the beginning of each season, the networks will submit to the NCAA Television Committee their preferences for a minimum of three “special dates” per network for the broadcast of football games during that season. If the networks both select the same date, a coin flip will determine which network gets first choice of the “special dates.” The network which wins the coin flip would choose a special date, and then the other network would be allowed to select one, with this process continuing until each network has all of the special dates it wishes. The special dates available to the networks are: the first Saturday of the television series for each season; Thanksgiving Day; the Friday and Saturday following Thanksgiving Day; the first Saturday in December; Labor Day; Veterans Day; Monday through Thursday nights, and any Saturday night date approved by the Committee. The networks would then select a date and the specific game or games it wishes to televise, as well as the time of day at which it will show the game. While it is possible for both networks to carry games on the same special date, rules have been developed which will minimize, if not eliminate, the possibility of more than one game being shown at any particular moment. After the “special dates” have been selected, the networks will then engage in a so-called “equity draft” in which each network will be allowed to select at least two “equity games” for broadcast by that network. Again there is a provision which minimizes the possibility of two games being broadcast at the same time by the two networks. After the “equity draft,” the networks will then begin alternatively selecting dates over which they will have a “right of control,” i.e., the first right to choose any given game. If CBS were to select, say, Saturday, October 30, it would have its pick of all of the games being played that day. If a particularly attractive game is scheduled for that day, CBS would have the first right to choose that game for broadcast. Presumably, the schools staging the game could negotiate for more money than CBS is offering, in hopes that the possibility that competitive bidding between the networks would occur. NCAA contends that this possibility cures the alleged illegality of the prior contracts. However, that view is not supported by the evidence. First, the networks have no intention to engage in bidding. Second, once the network holding first choice for any given date has made its choice and agreed to a rights fee for that game with the two teams involved, the other network is then in a monopsony position. The schools cannot threaten to sell the broadcast rights to any other network. They cannot sell to NBC without committing a violation of NCAA rules. They cannot sell to the network which had first choice over that particular date because, again, they would be in violation of NCAA rules, and the network would be in violation of its agreement with NCAA. Thus, NCAA creates a single eligible buyer for the product of all but the two schools selected by the network having first choice. Free market competition is thus destroyed under the new plan. In the words of James Spence of ABC Sports, while it is theoretically possible for the networks to engage in a bidding war for the rights to any particular game, “the system is not set up in that way.” The remaining key features of the new contracts are basically the same as in the past. Each network must broadcast a college football game on at least 14 different dates, and a minimum of 35 games must be shown per year by each network. At least seven of the broadcasts must be national, and a minimum of six must be regional broadcasts. At least one of the networks must broadcast a game on each Saturday of the fall season. No one school can appear any more than six times during any two-year period, and no school can appear nationally more than four times over two years. At least 82 different teams must appear on each network over a two-year period. The number of times any one school may appear during the two-year period must be divided equally between ABC and CBS. The effect of the NCAA’s program of controls is quite obvious. Rather than letting the market operate freely, NCAA has seriously restricted free market forces in the economics of college football television. Turning first to the plaintiffs’ allegations of price-fixing, it can be said with certainty that the prices which have been paid in the past to participating schools for the right to televise any particular game do not even resemble the prices which would have been paid were it not for the NCAA controls. It is quite obvious that were it not for the NCAA controls, no network decisionmaker would even consider offering the same price to the schools involved in last fall’s Oklahoma-USC and Citadel-Appalachian State games. Even the defendant’s witnesses had to agree that a free market mechanism most certainly would not have resulted in the uniform price paid for each and every game broadcast under past NCAA contracts with the networks. The evidence is clear that NCAA controlled the price to be paid to participating teams, and made it impossible for the teams to negotiate any higher price by restricting dealings to a single network. The evidence is also clear that some teams would have received larger fees were they allowed to negotiate with any and all potential broadcasters. At the same time, the testimony made clear that many of the smaller schools would not have received as much as they did under the NCAA plans if they were forced to compete in a free market. While the NCAA protests that these features have been eliminated by the new dual-network contracts, it is clear that they have not. As discussed above, a maximum of one game each week may allow the participating schools to engage the networks in true negotiations. However, after the network having the right of first choice on any given date has made its agreement with the teams playing the most attractive game of the week, the other schools are left in the same position as they were under previous contracts. They will be selling in a market where there is only one eligible buyer. They will be unable to use the bargaining leverage which would be available if they could sell the rights to the game to other broadcasters. Further, this monopsony situation is aggravated by the limitations on the number of times a school can appear on a given network over a two-year period. Suppose Georgia appears on ABC three times during one year, two national broadcasts and one regional. Under the current contracts and the “ground rules” accompanying them, during the following year Georgia could only appear, if at all, on CBS. This is because Georgia is limited to six appearances over a two-year period, and these six are to be equally divided between the networks. During the second year, ABC would not be allowed to televise a Georgia game. Georgia would then be forced to appear only on CBS. Georgia would have no bargaining leverage to negotiate a larger-than-average rights fee, since it could not threaten CBS with selling the rights to ABC. Thus, while the new contracts may appear, at first blush, to alleviate these features of past NCAA contracts, in fact they do not. The setting of a minimum aggregate fee, in combination with the “ground rules” restricting competition between the networks and the limitations on each team’s appearances, only perpetuate the monopsony situation which NCAA has created. It was suggested by defense witness Landes that the “minimum aggregate fee” contained in the contracts represent a figure not substantially different from the total of all rights fees which would be paid to colleges in an unrestricted football television market. This testimony fails to persuade the Court that NCAA’s controls are not illegal price-fixing for several reasons. First, Dr. Landes’ testimony was pure speculation. There is no data whatsoever before the Court in support of this conclusion, and Dr. Landes’ guesswork is unpersuasive. Second, even if Dr. Landes’ speculation were proven correct, it does not resolve the essence of the plaintiffs’ contention that some football games are worth more to broadcasters than others. The example of the rights fees paid for the 1981 Oklahoma-USC and Citadel-Appalachian State games was conceded by Dr. Landes to be a gross distortion of free-market forces. Third, whether or not the price paid by the networks is reasonable is not a permissible inquiry. Even if Dr. Landes were correct about the reasonableness of the price paid by the networks, that does not mean that the NCAA controls are any less offensive to the Sherman Act. National Society of Professional Engineers v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978). The plaintiff also urges that NCAA has acted to place a horizontal limit on production. That is, by making agreements with the networks for exclusive national television rights and placing severe restrictions on local broadcasts of college football, NCAA has agreed to limit production of televised college football. It is clear from the evidence that were it not for the NCAA controls, many more college football games would be televised. This is particularly true at the local level. Because of NCAA controls, local stations are often unable to televise games which they would like to, even when the games are not being televised at the network level. The circumstances which would allow so-called exception telecasts arise infrequently for many schools, and the evidence is clear that local broadcasts of college football would occur far more frequently were it not for the NCAA controls. This is not a surprising result. Indeed, this horizontal agreement to limit the availability of games to potential broadcasters is the very essence of NCAA’s agreements with the networks. The evidence establishes the fact that the networks are actually paying the large fees because the NCAA agrees to limit production. If the NCAA would not agree to limit production, the networks would not pay so large a fee. Because NCAA limits production, the networks need not fear that their broadcasts will have to compete head-to-head with other college football telecasts, either on the other networks or on various local stations. Therefore, the Court concludes that the membership of NCAA has agreed to limit production to a level far below that which would occur in a free market situation. The evidence is also clear that the NCAA plan has many of the characteristics of a group boycott. There are two different ways in which NCAA’s cartel-like behavior works as a group boycott. First, by granting exclusive rights to certain networks for televising college football, the NCAA essentially agrees not to bargain or make its product available to other broadcasters. If an NCAA school were to make an agreement with a broadcaster which did not comport with the NCAA plan, very severe penalties could be inflicted on the offending school under NCAA’s rules. Thus, the schools do not stray from NCAA plan, as can be seen from the events which transpired when CFA attempted to negotiate its own contract with NBC. The veiled threats which came from NCAA officials and NCAA’s entire course of conduct constituted classic cartel behavior. This leads directly to the second aspect of the group boycott allegation. If a member school were to defy the NCAA and make its product available to all potential buyers on an equal basis, that school would itself be made subject to a group boycott. This aspect of the group boycott operates in the following way. Unlike many industries, college football requires the cooperation of two producers in order to create their product. That is, two schools must stage a game; one school could not stage a football game by itself, at least not a game which would attract the kind of attention which NCAA football now attracts. If a member school strayed from the NCAA plan, it would be subject to very severe sanctions from the NCAA. Among the sanctions available would be expulsion from NCAA. Since NCAA members are prohibited from playing televised football games with non-NCAA members, the expelled school would be unable to produce its product. Such a situation would clearly constitute an agreement among NCAA members to boycott the school which strays from the NCAA Football Television Plan. The NCAA offers several justifications for its policies. The principle argument relied upon by the NCAA is that it is attempting to protect the gate attendance of member institutions. The evidence does not support that contention. First, the Court is not persuaded that college football television has any effect on gate attendance. The N.O.R.C. reports so heavily relied upon by NCAA are fallible in a number of ways. First, their age renders them most suspect. The last of these reports was compiled in 1957, some twenty-five years ago. It strains logic past its breaking point to suggest that because something was true twenty-five years ago, it is still true today, particularly when the subject of discussion is something so fluid as public preference in entertainment. Moreover, the N.O.R.C. studies, while quite professional and thorough, were analyzing a controlled market. Only the first of the N.O.R.C. studies was done in the absence of NCAA controls. The rest were studying a controlled market. No valid conclusion can be reached on the basis of a single year’s study, nor on the basis of studies of a controlled market. We simply do not know the effects of uncontrolled televising on gate attendance. Nor is the Court willing to infer deleterious effects from the evidence presented. The N.O.R.C. studies fail to show that football television was the cause for the steadily declining gate attendance at college football games during the early years of the study. There was no evidence that N.O.R.C. made any attempt to measure the general impact of the rapidly growing television industry (outside of televised football) on gate attendance. The N.O.R.C. study conceded that college enrollment had declined during the same years that gate attendance did, yet tries to minimize the very obvious relationship between declining enrollment and declining gate attendance. In short, because of the N.O.R.C. study’s failure to account for the effect of circumstances which logic says would negatively impact college football attendance, and the inadequate data base upon which it relies, the reliability of the conclusions is suspect. Yet the N.O.R.C. studies are the only empirical evidence supporting NCAA's conclusion that football television harms gate attendance. The study conducted by Dr. Landes and introduced into evidence is equally unpersuasive. While the study purports to analyze the effect of football television on gate attendance in the areas surrounding Oklahoma and Georgia, Dr. Landes was forced to admit that the study was imperfect since there is no weekend in which college football is not being televised nationally. The statistical significance of the correlation between televised football and gate attendance is marginal, and particularly unpersuasive in that it fails to analyze that effect in terms of the time of day in which the televised games are broadcast as opposed to the time at which the other games are being played. Furthermore, like the N.O. R.C. study, Dr. Landes was studying a controlled market. However, the greatest flaw in the NCAA’s argument is that it is manifest that the new plan for football television does not limit televised football in order to protect gate attendance. The evidence shows that under the new plan, many areas of the country will have access to nine hours of college football television on several Saturdays in the coming season. Because the “ground rules” eliminate head-to-head programming, a full nine hours of college football will be shown on television during a nine-to-twelve hour period on almost every Saturday of the football season in most of the major television markets in the country. It can hardly be said that such a plan is devised in order to protect gate attendance. • In the end, the NCAA’s argument regarding gate attendance is either an ill-founded belief at best, or at worst, a deception employed to make the majority of the NCAA membership believe that they should control football television out of self interest. The vast majority of NCAA members suffer none of the restrictions of the NCAA controls, yet that majority can seriously undermine the goals of those schools which are subject to the controls and whose athletic programs are almost completely dependent on revenue from football. It is also suggested by NCAA that the controls help preserve a competitive balance among the football programs of the various schools. Again, the argument must fail. NCAA has failed to show why this competitive balance cannot be maintained without NCAA acting as the exclusive bargaining agent for its members in matters of football television. Several witnesses testified to a vague belief that the entire program of controls is necessary, but not one witness could give a credible, factually-supported explanation as to why that is so. Even the executive officers of the NCAA could not explain why it is necessary for NCAA to act as the exclusive agent. If the NCAA is seeking to improve the competitive position of smaller schools seeking television revenues, it has done so in a way which inhibits, if not destroys, the effect of free market mechanisms on the price paid to teams appearing on television. If the NCAA is seeking to improve competition on the football field, it has chosen a much too far-reaching manner of doing so. The NCAA regulations on recruitment, the limitations on the number of scholarships each team may award, and the other standards for preserving amateurism found in NCAA legislation are sufficient to achieve this goal. Rather than relying on the NCAA to improve their competitive position by restraining competition, the schools can and should compete on their own and improve their position in that way. The plaintiffs’ final allegation is that the NCAA exercises monopoly power over college football television. As is often the situation in cases of this type, the most difficult factual inquiry is the definition of a relevant market. This inquiry is made exceedingly difficult in this case by the fact that we cannot know for sure what the characteristics of this market would be if the market were a free one. The NCAA controls prevent the free market economy from operating as to college football. Because we cannot know what the characteristics of the industry would be in a free market situation, the definition of a relevant market necessarily involves some guesswork. The Court concludes that the relevant market for testing whether the NCAA exercises monopoly power is live college football television. This conclusion is based on the following facts. Defining a relevant market involves inquiries into a number of factors, including such characteristics of the industry as the geographic area in which it is available, the time at which it is available, special characteristics of the buyers and the sellers of the product, and special characteristics of the product itself. The only one of these inquiries as to which there is no dispute is that the geographic market is the United States. The time at which college football is available is Saturday afternoon. Several facts support this conclusion. The vast majority, some 75%, of intercollegiate football games are played on Saturday afternoon. On Saturdays, college foo