US Justice Antitrust Dept Investigating NCAA's one year "renewables"

[HouWarrior]

I guess ALL NCAA BB scholly's are, by NCAA rule, to be one year renewables.

 US justice, antitrust attys may see such as unfair to competition and subjecting players  to coaches' annual  decision making.

""What if universities offered whatever they wanted? It would be a free market for universities to retain their talent."

To promote free markets (the object of antitrust laws) this article, just released, seems to indicate USDOJ AntiT's wants to consider federal action to overrule the NCAA's uniform,, non competitive rule , and allow member schools to offer, at their  option full 4 year gauranteed deals, not just the standard one year renewables....Result? interesting...
This would encourage promise keeping and competition for players:

example : a mid major competing for a border line MU recruit, (who may forsee that at MU he may not get renewed, after a year or two) will be lured to the mid major, who decides to offer him a GTY 4year deal (w/o renwable/cancelable terms) vs the bigger school, MU,  which only offers the standard one year renewable. Or
example 2: 2 equal rank BE schools, pursuing the same player (again I think this  mostly applies to borderline guys) ...one offers 4 yr gty to beat out the other BE who's offered only a renewable.
"If 2 of you love me, I'll go with the one who gives me the 4yr gty deal"--says the player..."after all if I am signing a 4 year commitment to you, why shouldnt I prefer the 4yr commitment back, over this other school who says they the retain right to drop me next year"

This puts players looking for the 4 year education and stability (esp borderline players) in line to make schools compete (federal goal) by some schools  offering 4 yr gty deals  , while other schools  will still only offer the standard one year renewable.

The fact this is even being investigated at federal level is an open nudge by fed govt that it would like to force NCAA out of the standard deal and eliminate renewables....or make non renewal a lot harder for the schools.

here is the article:

By Marlen Garcia, USA TODAY
The Justice Department's Antitrust Division is looking into NCAA rules that make scholarships renewable by schools on a yearly basis, the association announced on its website Thursday.
Over the years, the NCAA has been criticized for not guaranteeing scholarships for up to five years. Now the Justice Department is wondering why scholarships are one-year renewable, said Kadie Otto, associate professor of sports management at Western Carolina and past president of reform-minded The Drake Group, which favors guaranteed scholarships.

Otto told USA TODAY she was interviewed by a Justice Department attorney who floated the concept of giving schools flexibility to offer guaranteed scholarships of four years or more. That could possibly create bidding wars.

"They threw out the idea of why couldn't it be a free market where schools compete against each other," she said. "What if universities offered whatever they wanted? It would be a free market for universities to retain their talent."

In its statement, the NCAA said scholarships were based on merit. "Student-athletes must demonstrate that they deserve the merit-based award ... by remaining academically eligible for competition and by meeting participation expectations."

But that has created an environment in which athletes are beholden to the coach, Otto said.

According to NCAA spokesman Bob Williams, "We walked (the Justice Department) through the why, and they asked, 'Do you mind if we contact some of your schools to get their opinion?' And we said, 'Go ahead.' They wanted information, and we gave them information."

Justice Department spokeswoman Gina Talamona declined to comment.

[HouWarrior]

BTW, if you like conspiracy theories --call this the Craig Robinson/Obama investigation... it went like this...
"Damnit Obama, brother in law, my Oregon State team needs to compete for guys and I cant offer any more than the one year renewable the others do"

Why?

Its an NCAA rule, and I'd love to offer a 4yr gty to the same guy to lure him to Oregon State, over other pac 10 guys, esp that darn Orgeon, with all that Nike $!

Sounds good to me-- but what can I, the president of USA, do?

Well, you are the Harvard Lawyer, but it seems this rule is uniform, and prevents me from from competing for guys by offerring a better, more guaranteed deal to the guys I want, especially those Oregon targets, whose lust for a natl program will always have OU upgrading every year and only using renewables.

Hmmm, I support you, I like Bball, your Oregon State team , and the feds might look good if we were seen to be pushing for 4 yr gty education for our ballin' kids of the USA....

I'll call Eric Holder, stir something up, and we'll even plant a USA today story to promote the initiative--- if the feds can legitimately promote 4 yr education, BB at Or State, and make us all look good...

 ( Obama also thinks to himself..that damn NCAA is making more $$ than Goldman Sachs, anyway...AND that new NCAA prez from Washington killed my bracket when Marquette lost!!),

You're right lets do it......lets give Players everywhere...

HOPE...THEY CAN BELEIVE IN......for FOUR FULL YEARS...FOUR FULL YEARS

[GGGG]

Your first post raised some good points.  However, I have no idea how this is a restraint of trade.  These schools are voluntary members of the NCAA and agree to be beholden by their rules.

Your second post is absurd.

[jficke13]

absurd... but amusing.

[WellsstreetWanderer]

maybe not so absurd... didn't the government rush in with something like 18 million for the school where the brother-in-law was on shakey ground?  thought I read that somewhere

[HouWarrior]

Your first post raised some good points.  However, I have no idea how this is a restraint of trade.  These schools are voluntary members of the NCAA and agree to be beholden by their rules.

Your second post is absurd.

The NCAA, unlike MLB, has never had a congressional exemption to the antitrust laws.
posted below are other examples of NCAA rules being subject to and barred in enforcement due to antitrust.
Joining and agreeing to be bound by the rules voluntarily, is quite irrelevant. Unless exmpt from antitrust, any "group" rule which has an anti competitive effect is subject to this scrutiny, and typically govt weighs reason benefits/reasons for the rule against the restraint---here (see above) the NCAA's claimed reason for the restraint and in requiring uniform use of one year renewables is weak, in comparison to the competitive effect for schools and recruits--not really that hard to see.

Oh, .."absurd"... implies you took the satire of second post as serious speculation-- I guess I need to use teal more

Antitrust viz NCAA rules has a long history....:

In July 2003, a United States District Court in Ohio ruled that the National Collegiate Athletic Association (NCAA) violated section 1 of the Sherman Act 1 by limiting the number of appearances by its members in "certified" basketball tournaments. 2 In Worldwide Basketball and Sports Tours, Inc. v. NCAA, 3 the court held that by restricting member institutions to two certified tournaments every four years, the NCAA's rule had a "substantially adverse effect on competition." 4 As a result, the court issued a permanent injunction, barring the NCAA from ever enforcing the rule. 5

The decision in Worldwide Basketball was the latest in a pattern of federal court rulings that have a stifling effect on the NCAA in fulfilling its mission. 6 The legislation in debate in the Worldwide Basketball case was designed to limit the number of basketball games in a season "out of concern for student welfare, and [to give] lesser-known schools more opportunities to play in desirable tournaments." 7 In previous cases, courts have found the NCAA in violation of antitrust laws in regulating the salary of assistant basketball coaches 8 and the number of television appearances that a university can make during football season. 9

During the twenty years since the Supreme Court last weighed in on the NCAA and antitrust, college athletics has taken a sharp turn away from its roots. Today, big-time college athletics is considered its own industry, and very much is the subject of ever increasing antitrust scrutiny.