'Is the NCAA an illegal cartel that brazenly uses its power to generate immense wealth for member institutions, even as it shortchanges the amateur athletes it has sworn to protect?

A handful of disgruntled former athletes say it is in a pair of antitrust lawsuits that provide a troubling backdrop for the NCAA during its men's basketball tournament, which will spin off the lion's share of the NCAA's $521.1-million annual budget and generate an estimated $500 million in network advertising revenue.
The lawsuits filed by former football and basketball players at big-time athletic programs would reshape regulations that form the foundation of the NCAA effort to halt what President Myles Brand has described as a "slide toward professional athletics and the sports entertainment industry."

The lawsuits are seen as longshots by some antitrust experts because judges in the past have been hesitant to second-guess the NCAA on matters that directly involve student athletes. But "if the courts were to open this door, it would potentially unravel the NCAA's core mission," said Gary Roberts, director of the Tulane University Sports Law program and a Tulane representative to the NCAA.

Critics of the NCAA, which consists of 1,250 member institutions with more than 350,000 athletes, argue that amateur athletics at the top of the collegiate pyramid are in danger of being overtaken by an "arms race" fueled by television revenue, the largesse of wealthy donors and the demand among partisan fans for national championships. NCAA supporters counter that strict rules like those being challenged are necessary for the NCAA to fulfill its mandate to govern athletic competition "in a fair, safe, equitable and sportsmanlike manner."

One of the lawsuits, filed by former walk-on football players in a federal court in Washington state, challenges an NCAA cap on the number of grants-in-aid that big-time college football programs can offer to athletes. The other suit, filed in Los Angeles by former football and basketball players, argues that the grants awarded to athletes fail to cover the full cost of attending college.

The class-action lawsuits seek to represent thousands of athletes who have played, or are playing, sports at big universities. Because antitrust law allows for damages to be tripled, the Los Angeles suit alone could cost the NCAA as much as $345 million.

The NCAA argues that the contested rules are needed to "maintain a clear line of demarcation between intercollegiate athletics and professional sports." But the lawsuits underscore the fact that collegiate sports have turned into a big business.

"What it comes down to is that the coach is making money, the schools are making money but the players are severely restricted," said Daniel E. Lazaroff, director of Loyola University's Sports Law Institute. "What the plaintiffs are arguing is that caps aren't reasonably necessary, that they're really an artificial attempt at cost-containment."

Ironically, former athletes who filed the suit in Los Angeles count Brand as a supporter. The NCAA president has said he favors bigger grants that could help athletes cover gas money, phone bills and other expenses. But the NCAA's member institutions that set the rules Brand is paid to enforce say otherwise.

NCAA defenders view the lawsuit as a "pay-for-play" bid by greedy athletes, but Ellen Staurowsky, a professor of sports management at Ithaca College, disagrees. "The idea of a free ride is a myth," she said. "That's why I find this case so compelling. It's not just an individual athlete or a couple of dissatisfied athletes who are just in it for the money. They're arguing … from a perspective of fundamental fairness."

The other lawsuit, filed in 2004 by former walk-on football players at a handful of universities, portrays the NCAA as an illegal cartel that arbitrarily limits the number of grants. The former athletes moved a step closer to a trial last year when a judge refused the NCAA's request to have the lawsuit tossed out.

Though it is jarring, it isn't uncommon for such phrases as "illegal cartel," "price-fixing" and "collusion" to be used in conjunction with the NCAA. Athletes have frequently challenged the NCAA's strict amateurism rules, but the organization's business practices also have come under attack.

In 1984, the NCAA lost a landmark antitrust case that was sparked by a lucrative television broadcast rights contract. A few years later, the association paid more than $50 million to assistant coaches who sued over an NCAA salary cap. Last year, the NCAA settled an antitrust case by paying $56.5 million to acquire the competing National Invitation Tournament. The NCAA also has been sued over policies governing what tournaments teams can enter and what summer training camps athletes can attend.

It was the 1984 lawsuit that opened the door for subsequent antitrust challenges. The U.S. Supreme Court upheld a lower court that determined the NCAA had acted as a "classic cartel" when it crafted a broadcast rights deal that forced television networks to pay a premium. The contract also limited the number of television appearances by popular teams.

The NCAA had defended the plan — which redistributed television revenue to all members — as necessary to protect live attendance. But two big universities that wanted a bigger slice of the financial pie successfully sued the NCAA on antitrust grounds.

After the Supreme Court ruling, television rights fees fell by 50% as newly powerful athletic conferences negotiated their own broadcast agreements. "We knew that the marketplace would change dramatically if the courts allowed us to negotiate directly with the individual schools and conferences," said Neal Pilson, who was with CBS Sports in the early 1980s.

Though few could have predicted the dramatic growth in demand for college sports and the resulting rush of television revenue, former college and professional football player Byron "Whizzer" White, one of two Supreme Court justices who sided with the NCAA, saw danger signs.

In a minority opinion, White described the television deal as necessary if the NCAA were to keep big schools from "taking advantage of their success by expanding their programs, improving the quality of the product they offer, and increasing their sports revenues." Absent tough NCAA regulations, White wrote, "no single institution could confidently enforce its own standards [of amateurism] since it could not trust its competitors to do the same."

Fortunately for the NCAA, the 1984 Supreme Court opinion also confirmed that many of the rules that the NCAA was using to protect amateur athletics passed legal muster. And, in subsequent antitrust cases that directly involved student-athletes, judges have tended to side with the NCAA; one even referred to the "paternalistic" nature of the NCAA's duties.

NCAA General Counsel Elsa Kircher Cole says she is confident the two latest antitrust suits will fail because federal judges are hesitant to substitute their judgment for the collective wisdom of NCAA member institutions. Others, including Lazaroff, aren't so sure: "I don't see this as a slam-dunk either way."

Should the grant-in-aid rules be found in violation of antitrust law, some observers suspect that public pressure would force Washington, D.C., to move to protect the status quo. Brad Humphries, an economist at the University of Illinois, says that irate fans would lobby legislators to "step in and do for collegiate sports what it did for baseball" by granting the NCAA an antitrust exemption.

Roberts agrees that irate fans would rebel: "The political power that college sports exercises is unbelievable. Football is a religion in Louisiana, Texas, Florida and Alabama. And basketball is a religion in North Carolina and Kentucky." '