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Home | Blog | The Antitrust Playoffs Have Begun

The Antitrust Playoffs Have Begun

May 4, 2011

After years of media and academic griping, the Justice Department’s Antitrust Division is finally threatening to rid the nation of the most hated thing not named Bin Laden — the Bowl Championship Series. Utah’s attorney general — who hates college football’s postseason because it didn’t pay his state’s schools a sufficient ransom — released a copy of a letter from Antitrust Division boss Christine Varney to NCAA President Mark Emmert demanding “information,” the first step towards a potential Sherman Act lawsuit:

Dear Dr. Emmert,

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 the federal antitrust laws. The Attorney General of Utah has announced an intention to file an antitrust lawsuit against the BCS. In addition, we recently received a request to open an investigation of the BCS from a group of twenty-one professors, a copy of which is attached. Other prominent individuals also have publicly encouraged the Antitrust Division to take action against the BCS, arguing that it violates the antitrust laws.

So right off the bat, Varney admits she’s not really a neutral enforcer of the “law,” but a political hack responding to external pressure to take some sort of action against the BCS. It’s especially laughable that Varney cites lobbying from “a group of twenty-one professors” as grounds for opening what could be a lengthy and expensive antitrust investigation that ultimately leads nowhere. If I could get a letter from 21 Austrian economics professors requesting Varney shut down her office, would she look into that as well?

Now as to the main point — the BCS “may not be conducted consistent with the competition principles expressed in the federal antitrust laws” — I have yet to hear any anti-BCS argument that can’t be reduced to, “People just want a playoff instead.” Which is fine. I could care less how college football handles its postseason. The problem is that BCS critics have latched on to this idea that the mere fact they despise the BCS somehow means there must be an antitrust violation. It’s a brute force argument if ever I’ve heard one: Consumers aren’t getting something they want, so the government must act!

Yet even under the convoluted “competition principles” of antitrust, the BCS should be non-controversial. The antitrust argument against cartels is that they reduce output and access. The BCS has done just the opposite. It’s increased the number of postseason bowl games to comical levels, and schools that had no chance of playing in the highest-paying games now at least have a theoretical chance. What grinds the gears of institutions like Utah is that despite increased access under the BCS, they remain less competitive than other schools that, quite frankly, devote more resources to their football programs. Once again, antitrust is a crutch for less successful firms to sue their way to parity.

The rest of Varney’s letter suggests her office may soon assert itself as the de facto regulator of college football’s postseason — a wasteful pursuit even for an inherently wasteful outfit like the Antitrust Division:

On March 2,2011, the New York Times reported that the National Collegiate Athletic Association (NCAA) was “willing to help create a playoff format to decide a national championship for the top level of college football.” In that context, it would be helpful for us to understand your views and/or plans on the following:

  1. Why does the Football Bowl Subdivision not have a playoff, when so many other NCAA sports have NCAA-run playoffs or championships?
  2. What steps, if any, has the NCAA taken to create a playoff among Football Bowl Subdivision programs before or during your tenure? To the extent any steps were taken, why were they not successful? What steps does the NCAA plan to take to create a playoff at this time?
  3. Have you determined that there are aspects of the BCS system that do not serve the interests of fans, colleges, universities, and players? To what extent could an alternative system better serve those interests?

Your views would be relevant in helping us to detennine the best course of action with regard to the BCS. Therefore, we thank you in advance for your prompt attention to this matter.

So the mere fact the NCAA has chosen not to adopt a football playoff for some schools — there are three divisional playoffs for schools that do not participate in the BCS — is sufficient grounds to launch a federal antitrust investigation. This is yet another instance of antitrust officials taking it upon themselves to decide which business models are acceptable within the marketplace. Even if the Antitrust Division never brings an actual complaint, the mere grounds it cites for investigation should give businesses in every industry pause.

Of course, none of this matters much to the mainstream press, many of whom will be overjoyed at the prospect of their benevolent government charging — at last! — to rescue them from the horrors of a non-playoff college football postseason. It goes without saying that the ends justify the means. It certainly won’t occur to anyone that allowing the Antitrust Division to run rampant over the BCS might set a dangerous precedent for the expansion of the Division’s unchecked power in other areas.

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