[Congressional Record Volume 143, Number 37 (Thursday, March 20, 1997)]
[Senate]
[Pages S2613-S2618]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          ANTITRUST IMPLICATIONS OF THE COLLEGE BOWL ALLIANCE

  Mr. McCONNELL. Mr. President, Senator Bennett of Utah, Senator Thomas 
and Senator Enzi of Wyoming, and I have been working on a matter that 
we wish to discuss with our colleagues in the Senate for the next few 
moments. Senator Thomas needs to leave so he is going to lead off.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. I thank the Chair.
 Mr. President, I rise today to speak about the college 
football Bowl Alliance. I am concerned that under the Bowl Alliance 
structure, athletic excellence is not being recognized in postseason I-
A college football play.
  Fresh in the minds of Wyoming football fans is the last game of 
regular season play when the nationally ranked Cowboys played against 
No. 5-ranked Brigham Young University for the Western Athletic 
Conference [WAC] championship title. Both teams went into the game 
believing the winner would be selected for major postseason bowl 
action. UW and BYU delivered a terrific conference championship game. 
BYU won 28-25 over Wyoming in overtime play. It was the first WAC title 
game won in overtime. Unfortunately, neither WAC team was invited to a 
major New Year's bowl.
  The 1996 selections to the New Year's bowl games shed revealing light 
on the college football Bowl Alliance. Invitations to the most 
lucrative major bowls games--the Orange Bowl, the Sugar Bowl, and the 
Fiesta Bowl--were largely sent to high-profile, highly marketable teams 
instead of worthy teams. Many sports fans were disappointed at the 
postseason New Year's bowl matchups. I am concerned about the closed 
selection process that has developed and the impact the Bowl Alliance 
structure will have on I-A collegiate football.
  The Bowl Alliance operates outside the purview of the National 
Collegiate Athletics Association [NCAA]. The Bowl Alliance was created 
in 1993 when the Atlantic Coast Conference, the Big East Conference, 
the Big 12 Conference, the Southeastern Conference and Notre Dame came 
together and took it upon themselves to provide and acquire teams to 
participate in the major bowl games. These Bowl Alliance conferences 
have contracts with the television networks and large corporate 
sponsors--Federal Express, Tostitos, and Noika. Champions from each 
alliance conference are automatically guaranteed a berth in one of the 
major bowl games. The nonalliance conferences remaining out in the cold 
are the Western Athletic Conference [WAC], the Big West Conference, 
Conference USA, the Mid American Conference and the 11 Independent 
teams.
  The Bowl Alliance claims its purpose is to create optimal matchups 
and identify and national champion. Considering the 1996 selections for 
the bowl games, I question if quality matchups is the true goal. Last 
season, TV viewers saw No. 20 Texas lose to No. 7 Penn State 38-15 in 
the Fiesta Bowl. Texas' record was 8-4. The Orange Bowl showcased No. 9 
Virginia Tech losing to No. 6 Nebraska 41-21.

  Appearance in a Bowl Alliance game pays well. Each participating team 
takes approximately $8,000,000 back to its school. In addition, the 
teams get the national visibility and prestige that leads to strong 
athletic recruitment. Conferences outside the alliance have a remote 
chance of participating in one of the Alliance Bowls. Over time it will 
hurt the quality of the nonalliance teams who will have difficulty in 
recruitment. The Alliance Bowl structure will make the alliance teams 
stronger and relegate the nonalliance teams to a second-tier status.
  The alliance ensures its monopoly through the use of the at-large 
rule. Although the champions of the self-selected Alliance Bowl 
conferences automatically appear in one of the major bowl games there 
are two remaining at-large spots. It is questionable as to whether 
those two spots are truly at-large and open to any high-quality team 
that can play their way into one of the spots. A team from the WAC was 
deserving of one of those at-large spots last year, but the invitation 
never came.
  I am concerned for the future of the athletes and schools in the 
nonalliance conferences. That is why I joined with Senators Mitch 
McConnell, Robert Bennett, and Mike Enzi in writing to the Department 
of Justice [DOJ] and the Federal Trade Commission [FTC] to request an 
investigation of the Bowl Alliance. We suspect possible violations of 
the Sherman Antitrust Act. In 1996, the eight Alliance Bowl 
participants, including the Rose Bowl participants, went home with a 
total of $68 million. The 28 teams that played in the minor bowl games 
shared a pot of

[[Page S2614]]

$31 million. We requested a formal investigation of the matter. If 
there is wrong-doing we want to see the DOJ and the FTC use their 
statutory enforcement powers to break this lock on college football.
  We are not asking for special consideration for any one team. We 
would like to see genuinely open competition restored to college 
football postseason bowls. Postseason play should be about recognizing 
achievement. Letting the best teams play is in the best interest of our 
student athletes and our schools.
  I wish to associate myself with the efforts of the Senator from 
Kentucky, the Senator from Utah, and my friend from Wyoming in doing 
some things that we think have impact in football. The Bowl Alliance 
has a great effect on small schools, particularly the University of 
Wyoming, BYU, Louisville, and others, and so we think this is an issue 
which needs to be discussed. I am very proud to be associated with the 
comments my friends will make.
  I thank the Chair.
  Mr. McCONNELL. I thank my friend from Wyoming for his contribution to 
the matter that we will now proceed to discuss with our colleagues.
  Mr. President, at a time when the country is swept away by March 
madness--particularly, I notice the occupant of the chair has a fine 
team in March madness that will probably, no doubt, come in second to 
Kentucky in the end--and the excitement of competitive college 
basketball, we are nevertheless reminded of the fundamental unfairness 
of college football's pseudo playoffs. Specifically, I am talking about 
the College Bowl Alliance.
  The alliance is a coalition of top college football conferences and 
top postseason bowls. Over the past few years, the alliance has entered 
into a series of restrictive agreements to allocate the market of 
highly lucrative postseason bowls. By engaging in this market 
allocation, the coalition bowls and the coalition teams have ensured 
that they will receive tens of millions of dollars, while the remaining 
teams and bowls are left to divide a much smaller amount. The alliance 
agreements have the purpose and effect of making the already-strong 
alliance teams stronger while relegating the remaining teams to a 
future of, at best, mediocre, second-class status.
  Mr. President, in college football, there can be no Cinderella 
stories. There can be no unranked, unknown Coppin State going to the 
playoffs and beating the SEC regular season champion, South Carolina, 
and going down to the wire with a Big 12 power like Texas.
  A team like Coppin State could never make it to the lucrative college 
football postseason. You see, a team like that would be excluded 
because it's not in the College Bowl Alliance and its fans don't travel 
well. It doesn't even have its own band.
  College football has no room for a Sweet 16 that includes teams like 
St. Joseph's and the University of Tennessee at Chattanooga. The 
opportunity to be in college football's Elite Eight and Final Four is 
essentially determined before the season begins.
  The basic message, Mr. President, is that--if David wants to slay 
Goliath--he'd better do it during basketball season. He won't be 
allowed to play Goliath when the football postseason rolls around.
  College football has no room for the underdog. In fact, as evidenced 
by the 1997 New Year's bowls, college football doesn't even have room 
for top-ranked teams--unless those teams are members of the exclusive 
Bowl Alliance.
  I first raised this issue in 1993 when my alma mater, the University 
of Louisville, had a 7-1-0 record and a top ranking, but was 
automatically excluded from the most lucrative New Year's bowls. I 
contacted the Justice Department and explained that the alliance 
agreements constituted a group boycott, and, thus, violated the Sherman 
Act.
  The Justice Department promised to promptly review the matter.
  Shortly thereafter, the College Bowl Alliance entered into a revised 
agreement whereby the 1997 New Year's bowls would be open to any team 
in the country with a minimum of eight wins or ranked higher than the 
lowest ranked--alliance--conference champion.

  Despite this pledge, the alliance continued its apparent boycott of 
nonalliance teams. During the 1996 season, Brigham Young University and 
the University of Wyoming, both members of the nonalliance Western 
Athletic Conference [WAC], met the alliance criteria. Wyoming finished 
the season 10-2 and ranked 22d in the country, while BYU won 13 games 
and was ranked the fifth best team in the country.
  Neither team, however, was afforded an opportunity to play in the 
alliance bowls. In fact, BYU's record and ranking was superior to 
nearly every alliance team, including four of the six teams who 
participated in the high-visibility, high-payout alliance bowls.
  Mr. President, this issue is about more than football, apple pie, and 
alma mater. This is about basic fairness and open competition. This is 
about a few conferences and a few bowls dividing up a huge 
multimillion-dollar pie among themselves.
  In 1997, the eight participants in the alliance bowls, including the 
Rose Bowl participants shared an estimated pot of $68 million while the 
28 nonalliance bowl participants were left to divide approximately $34 
million. In short, the market has been divided such that eight teams 
rake in 70 percent of the postseason millions, while 28 teams get 
nothing more than the leftover 30 percent.
  This chart may have printing that is too small for the camera to pick 
up, but it illustrates the nature of the problem.
  The Alliance bowls--Fiesta, Sugar, Orange, and Rose--totaled $68.2 
million. That is eight teams that benefited from the $68.2 million. The 
nonalliance bowls--and here is a whole list of them--collectively 
shared $34 million. Clearly, most of these teams never had an 
opportunity, no matter how good they were, to participate in the New 
Years Day payout bowls. Therein lies the antitrust problem, a clear 
antitrust problem I might say.
  These short-term millions lead to long-term benefits for the alliance 
conferences. Guaranteed appearances in high-visibility bowls directly 
translate to: more loyal fans, more generous alumni, and much more 
willing athletic recruits.
  If you don't believe it's easier for alliance teams to recruit, just 
pick up the phone and call the coach at an independent school like 
Central Florida, or the coach at the University of Louisville or BYU. 
These coaches will tell you time after time that the top high school 
athletes don't want to play for teams that don't have a shot at the top 
New Year's bowl games.
  Mr. President, in summary, there is substantial evidence that the 
most powerful conferences and the most powerful bowls have entered into 
agreements to allocate the postseason bowl market among themselves and 
to engage in a group boycott of nonalliance teams and bowls. The effect 
of these agreements is to ensure that the strong get stronger, while 
the rest get weaker.
  I have joined with my colleagues--Senator Bennett, Senator Enzi, and 
Senator Thomas--to request that both the Justice Department and the 
Federal Trade Commission investigate the intent and effect of the 
alliance agreements. I ask unanimous consent that the Justice 
Department letter be printed in the Record at the end of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. McCONNELL. In closing, I'd like to point out that this effort is 
much more than just a few Senators cheering for their home teams. The 
Supreme Court has said it much more clearly than we ever could. So, I 
quote the Court, which I seem to be doing quite often these days:

       [O]ne of the classic examples of a per se violation of 
     section 1 is an agreement between competitors at the same 
     level of the market structure to allocate territories in 
     order to minimize competition . . . This Court has reiterated 
     time and time again that ``horizontal territorial 
     limitations . . . are naked restraints of trade with no 
     purpose except stifling of competition.''

  This fundamental principle of antitrust law should guide the review 
of the Justice Department and the Federal Trade Commission. In the 
words of the D.C. Circuit, ``the hallmark of the [unlawful] `group 
boycott' is the effort of competitors to `barricade themselves from 
competition at their own level.' ''
  Today, we are calling on all interested parties to break the 
barricade.

[[Page S2615]]

 We are challenging the NCAA, the Bowl Alliance commissioners, and the 
Alliance bowl committees to take action to bring about genuine 
competition to college football and the postseason.
  Postseason playoffs can be a reality for college football. It works 
for college basketball, college baseball, and it works for college 
football--at the Division I-AA, Division II, and Division III 
levels. They all have a playoff system, all of them except Division I.

  The opportunity to compete in postseason bowls should be based on 
merit, not membership in an exclusive coalition.
  So, Mr. President, I thank my good friend and colleague from Utah, 
Senator Bennett, for his fine work on this issue. And also Senator Enzi 
for his great work on this. We are hoping for the best. Obviously, the 
solution to this problem that we would all prefer is for the 
organizations themselves to solve the problem. But, if they do not, it 
seems pretty clear to each of us that this is an antitrust case the 
Justice Department should pursue.
  With that, Mr. President, I yield the floor.

                               Exhibit 1


                                                  U.S. Senate,

                                   Washington, DC, March 14, 1997.
     Hon. Joel I. Klein,
     Acting Assistant Attorney General, Antitrust Division, U.S. 
         Department of Justice, Washington, DC.
       Dear Mr. Klein: We believe that there is substantial 
     evidence of serious violations of Section 1 of the Sherman 
     Act (15 U.S.C. 1) by the College Bowl Alliance 
     (``Alliance'').
       The Alliance is a coalition of top college football 
     conferences and representatives of top postseason college 
     football bowls. Over the past few years, the Alliance has 
     entered into a series of restrictive agreements to allocate 
     the market of highly-lucrative New Years' bowls. By engaging 
     in this market allocation, the coalition bowls and the 
     coalition teams have ensured that they will receive tens of 
     millions of dollars, while the remaining teams and bowls are 
     left to divide a much smaller amount. In 1996, for example, 
     the eight Alliance bowl participants (including the Rose Bowl 
     participants) went home with a total of $68 million, while 
     the 28 non-Alliance bowl participants shared a pot of $31 
     million. Moreover, the Alliance agreements have the 
     additional purpose and effect of making the already-strong 
     Alliance teams stronger while relegating the remaining teams 
     to a future of, at best, mediocre, second-class status.
       As you will recall, the Antitrust Division commenced a 
     review of this coalition in late 1993. Shortly thereafter, 
     the Alliance agreed that the top bowls would be open to all 
     teams based on merit. The 1997 New Year's Bowls, however, 
     proved to the contrary. We are writing to advise you of these 
     recent material events and to urge that you initiate a formal 
     investigation into this matter.

                             I. Background

       Courts have routinely declared that agreements among 
     competitors to allocate territories and exclude would-be 
     competitors are a violation of Section 1 of the Sherman Act. 
     See, e.g., Smith v. Pro Football, Inc., 593 F.2d 1173, 1178 
     (D.C. Circuit 1978). As the D.C. Circuit has explained:
       ``The classic `group boycott' is a concerted attempt by a 
     group of competitors at one level to protect themselves from 
     competition from non-group members who seeks to compete at 
     that level. Typically, the boycotting group combines to 
     deprive would-be competitors of a trade relationship which 
     they need in order to enter (or survive in) the level wherein 
     the group operates. . . . [The hallmark of the `group 
     boycott' is the effort of competitors to barricade themselves 
     from competition at their own level.' ''
       Id. This fundamental principle should be kept in mind while 
     reviewing the facts surrounding the College Bowl Alliance.


              a. original college bowl alliance agreement

       In 1991, five college football conferences (ACC, Big East, 
     Big Eight, Southeastern, and Southwestern conferences) and 
     the independent University of Notre Dame, formed a coalition 
     with the prestigious College Bowl Committees of the Federal 
     Express Orange, USF&G Sugar, IBM Fiesta, and Mobil Cotton 
     Bowls (``Alliance bowls'').\1\ The Pac-10 and Big Ten also 
     participated in the coalition, although their champions 
     played in the Rose Bowl under a separate agreement.
---------------------------------------------------------------------------
     \1\ The Bowl Alliance was originally called the Bowl 
     Coalition. Additionally, pursuant to the dissolution of the 
     Southwest Conference, the Big Eight became the Big 12, and 
     the Cotton Bowl dropped out of the coalition.
---------------------------------------------------------------------------
       The coalition agreement was expressly designed to reduce 
     competition in the postseason match-ups of teams and bowls, 
     and to guarantee every coalition team an opportunity to vie 
     for a lucrative, high-visibility bowl. The contract 
     specifically guaranteed that each coalition team 
     participating in any of the Alliance bowls would receive a 
     minimum payout based on similar terms. Typically, an Alliance 
     bowl team has taken home a purse in excess of eight million 
     dollars. Moreover, the original Request for Proposal 
     contained a clause requiring that no Alliance bowl or 
     Alliance team could compete in time slots opposite other 
     Alliance bowls.
       The agreement also stipulated the procedure by which the 
     top-ranked and lesser-ranked Alliance teams were matched up 
     with participating Alliance bowls. Three conferences were 
     guaranteed berths at a specific Alliance bowl regardless of 
     the ranking of their champion team. Any team not in the 
     Alliance, however, was precluded from competing in any of the 
     Alliance bowls, regardless of its record or ranking.
       The Alliance conferences and Notre Dame received 
     substantial benefits from the coalition agreements. They were 
     assured a berth at a major postseason bowl--regardless of 
     their topmost ranking. Further, all of the participants in 
     the Alliance bowls were guaranteed to receive a substantial 
     minimum payment and national visibility. Such visibility in 
     turn enhanced fan support, alumni fund-raising, and athletic 
     recruiting for the bowl teams.
       By dividing the lucrative market of major postseason bowls 
     among themselves, the Alliance Conferences and Notre Dame 
     expressly and effectively excluded a substantial number of 
     the other Division 1A teams from any of the prestigious New 
     Year's Bowls. The excluded teams were those which were either 
     independent or in non-Alliance conference such as the Western 
     Athletic Conference, the Big West, and the Middle America 
     Conference.


             B. Initial Request for Antitrust Investigation

       In response to these market allocations, Senator Mitch 
     McConnell formally requested that the Justice Department 
     investigate the intent and effect of the Bowl Alliance 
     agreements. Specifically, Senator McConnell pointed out that 
     the Bowl Alliance agreements precluded a non-Alliance team 
     from going to the significant and lucrative Alliance Bowls--
     even when the non-Alliance team had a better record and a 
     better ranking than an Alliance team. In response, the 
     Justice Department commenced a review of the Bowl Alliance.


                  C. ``Revised'' College Bowl Alliance

       Thereafter, the College Bowl Alliance entered into a 
     revised agreement whereby the 1997 New Year's bowls would 
     supposedly have two of the six Alliance slots ``open to any 
     team in the country with a minimum of eight wins or ranked 
     higher than the lowest-ranked conference champion from among 
     the champions of the Atlantic Coast, The Big East Football, 
     The Big Twelve and Southeastern conferences.''
       At that point, Senator McConnell concluded that the ``new 
     arrangement seems to open competition to the top tier bowl 
     games.'' (Letter from Honorable Mitch McConnell to the 
     College Football Association, December 21, 1995.) The Justice 
     Department apparently made a similar determination.
       Notwithstanding the promise of open competition, the 
     Alliance announced that it would consider non-Alliance teams 
     for the ``at-large'' openings only if they signed a special 
     restrictive agreement. The Alliance demanded that the terms 
     of this ``participation agreement'' be kept confidential. 
     Nevertheless, a key term of this agreement apparently was 
     that the at-large participants had to promise to accept an 
     offer from an Alliance bowl over any offers from non-Alliance 
     bowls. In the words of the Alliance, ``[t]here are no `pass' 
     or withdrawal options.''\2\
---------------------------------------------------------------------------
     \2\ In the fall of 1996, the Alliance sent out 
     ``participation offers'' to presumably all of the non-
     Alliance teams. Both Brigham Young University and the 
     University of Wyoming signed the restrictive participation 
     agreements, but included a proviso stating they would not 
     agree to all of the restrictive terms. Specifically, the 
     University of Wyoming explained that ``the University . . . 
     and the Western Athletic Conference will not comply with any 
     expressed or implied provision that prevents other members of 
     the WAC from participating in bowls that compete with any 
     Alliance Bowl, or with any other provisions that might 
     violate antitrust laws.''
---------------------------------------------------------------------------


               D. Continued Boycott of Non-Alliance Teams

       The potential antitrust fears became a reality after the 
     1996 regular season when the Alliance continued its apparent 
     boycott of non-Alliance teams. During the 1996 season, 
     Brigham Young University and the University of Wyoming, 
     members of the non-Alliance Western Athletic Conference, had 
     ``a minimum of eight wins or [were] ranked higher than the 
     lowest-ranked [Alliance] conference champion. . . .''
       BYU, in fact, met both of the Alliance criteria by 
     compiling a remarkable 13-1 record and earning a ranking of 
     the fifth best team in the country. This record and ranking 
     was superior to nearly every Alliance team, including the 
     University of Texas, 8-5 record and a No. 20 ranking; 
     Pennsylvania State University, 11-2 record and a No. 7 
     ranking; Virginia Tech, 10-2 record with a No. 13 ranking; 
     and Nebraska, 11-2 record and a No. 6 ranking. Nevertheless, 
     BYU did not receive an at-large invitation to play in any of 
     the prestigious Alliance bowls; while Texas, Penn State, 
     Virginia Tech, and Nebraska all were invited to play in 
     various Alliance bowls, with the attendant financial and 
     recruiting benefits. Similarly, Wyoming finished with an 
     impressive 10-2 record and a No. 22 ranking, but was not 
     afforded an offer to play in the Alliance bowls.


                 E. Formation of the ``Super Alliance''

       In June 1996, the Alliance lock on college football power 
     was strengthened as the Rose

[[Page S2616]]

     Bowl agreed to join the Alliance, which guaranteed the Big 
     Ten and Pac-10 conferences automatic berths in an Alliance 
     bowl. The Alliance has officially renamed itself the ``Super 
     Alliance.''

    II. Sherman Act Prohibits Market Allocations and Group Boycotts

       The Sherman Act prohibits the Alliance agreements. Section 
     1 of the Sherman Act is violated where: (1) there is an 
     agreement, (2) that unreasonably restrains trade, and (3) 
     affects interstate commerce. 15 U.S.C. 1. It is beyond 
     dispute that interstate commerce is affected by the millions 
     of dollars that flow through the Alliance bowls to the 
     Alliance conference teams. Thus, our analysis focuses on the 
     existence of agreements and the unreasonable restraint of 
     trade.


         a. the alliance is linked by at least three agreements

       The Alliance coalition is linked by a minimum of three 
     agreements that limit competition. First, the Alliance 
     conferences--the ACC, Big East, Big 12, Big Ten, Pacific 10 
     and the Southeastern conferences--have horizontally agreed 
     not to compete with each other for the top postseason bowls. 
     Next, the Alliance bowls--the Sugar, Fiesta, and Orange 
     bowls--have horizontally agreed not to compete with each 
     other for the top-ranked teams. Third, the Alliance 
     conferences and the Alliance bowls have vertically agreed to 
     further their horizontal agreements by limiting participation 
     with non-Alliance teams and non-Alliance bowls. These 
     agreements individually and in their totality demonstrate ``a 
     conscious commitment to a common scheme designed to achieve 
     an unlawful objective.'' Monsanto Co.  v. Spray-Rite Serv. 
     Corp., 465 U.S. 752, 768 (1984).
       Moreover, strong evidence suggests the existence of an 
     ``anti-overlap'' agreement. The coalition's original Request 
     for Proposal contained an explicit ``anti-overlap'' clause. 
     Under the terms of such an agreement, no Alliance bowls or 
     teams could compete in time slots opposite other Alliance 
     bowls. Although this clause was officially removed following 
     a letter of protest from the Holiday Bowl, the Alliance's 
     exclusive prime television slots are strong indicators of an 
     anti-overlap agreement. Such circumstantial evidence may be 
     used to prove the existence of an agreement. See id.


 b. the alliance agreements unreasonably restrain trade under either a 
                  per se test or a rule of reason test

       The effect of these interlocking agreements is to 
     unreasonably restrain trade. Courts determine the 
     reasonableness of a restraint by applying either a per se 
     test or a rule of reason test. See, e.g., NCAA v. Board of 
     Regents, 468 U.S. 85, 100-01 (1984). The Alliance agreements 
     fail under either analysis.


                          (1) per se analysis

       The facts underlying the Alliance warrant the stringent per 
     se analysis. Although courts have often analyzed regulations 
     of sports organizations under a rule of reason, see, e.g., 
     Justice v. NCAA, 577 F. Supp. 356, 380 (D. Ariz. 1983) 
     (citations omitted), such a lenient review is inappropriate 
     where the purpose of the regulations is to eliminate business 
     competition. See, e.g., id. (citing M & H Tire Company, Inc. 
     v. Hoosier Racing Tire Corp., 560 F. Supp. 591, 604 (D. Mass. 
     1983); Blalock v. Ladies Professional Golf Assoc'n, 359 F. 
     Supp. 1260, 1264-68 (N.D. Ga. 1973)). The Alliance cannot 
     cloak its purpose and effect under the garb of NCAA self-
     regulation, cf., Justice, 577 F. Supp. at 379 (rule of reason 
     is appropriate where NCAA enforced rules against compensating 
     athletes), where the underlying facts demonstrate that 
     business-minded entities acted with the clear intent to 
     exclude non-Alliance bowls and non-Alliance teams from multi-
     million dollar opportunities.
       Courts have routinely condemned such market allocations and 
     group boycotts under the per se rule. See Fashion 
     Originators' Guild v. Federal Trade Comm'n, 312, U.S. 457 
     (1941) (group boycott); United States  v. Addyston Pipe & 
     Steel Co., 85 Fed. 271 (6th Cir. 1898), mod., 175 U.S. 211 
     (1,899) (market division). As the Supreme Court has 
     explained:
       [o]ne of the classic examples of a per se violation of 
     section 1 is an agreement between competitors at the same 
     level of the market structure to allocate territories in 
     order to minimize competition. . . . This Court has 
     reiterated time and time again that ``horizontal territorial 
     limitations . . . are naked restraints of trade with no 
     purpose except stifling of competition.''
       United States v. Topco Associates, 405 U.S. 596, 608 (1972) 
     (citations omitted).
       For example, in United States v. Brown, 936 F.2d 1042 (9th 
     Cir. 1991), the Ninth Circuit held that an agreement between 
     two billboard advertising companies providing that each would 
     not compete with the other's former billboard leaseholds for 
     one year was per se illegal. Similarly, the agreement among 
     the Alliance bowls not to compete with each other for teams 
     should be per se illegal. Id. Likewise, the agreement among 
     the Alliance teams not to compete with each other for the 
     Alliance bowls should be struck down. Id.


                           (2) Rule of reason

       The Alliance agreements also fail under a rule of reason 
     analysis. Under the rule of reason, courts require a 
     plaintiff to show that there are significant anti-competitive 
     effects. See NCAA v. Board of Regents, 468 U.S. 85, 100-01 
     (1984). Once this burden has been met, the defendant must 
     show that there are pro-competitive effects, which then 
     shifts the burden back to the plaintiff to demonstrate that 
     such effects can be achieved in a less restrictive manner. 
     Id. at 120 (striking down restraint on broadcast of college 
     football where there was no sufficient pro-competitive 
     justification).


                      (a) anti-competitive effects

       As set forth above, the anti-competitive effects of the 
     Alliance on college football generally and the New Year's 
     bowls specifically are undeniable. Instead of having all the 
     bowls bidding for all the teams, a super-coalition of 
     powerful bowls and powerful teams has divvied up the prized 
     opportunities among themselves. As the Supreme Court stated 
     in NCAA v. Board of Regents, ``[t]he anti-competitive 
     consequences . . . are apparent . . . [when] [i]ndividual 
     competitors lose their freedom to compete.'' 468 U.S. at 107-
     08.
       The facts of the 1996 season indicate that non-Alliance 
     teams were not allowed to genuinely compete for one of the 
     lucrative Alliance bowls. For example, BYU was not invited to 
     an Alliance bowl in spite of having a ``minimum of eight 
     wins'' and being ``ranked higher than'' four of the 
     Alliance teams participating in Alliance bowls. Moreover, 
     non-Alliance bowls were unable to genuinely compete for 
     the Alliance teams in light of the anti-overlap rule and 
     the ``no-pass'' rule--the latter of which mandated that 
     all Alliance-eligible teams must accept offers from 
     Alliance bowls--regardless of how lucrative a non-Alliance 
     bowl offer might be.
       These anti-competitive effects are in direct contravention 
     of well-established Supreme Court precedent. In NCAA, the 
     Court explained that `` `[i]n a competitive market, each 
     college fielding a football team would be free to sell the 
     right to . . . its games for whatever price it could get.' '' 
     NCAA, 468 U.S. at 106 (quoting district court and striking 
     down restraints). The Alliance agreements clearly restrict 
     such a right for both the non-Alliance bowls and the non-
     Alliance teams. See also United States v. Paramount Pictures, 
     Inc., 334 U.S. 131, 154 (1948) (striking down block booking 
     because it ``eliminate[s] the possibility of bidding for 
     films theater by theater. [Such agreements] eliminate the 
     opportunity for the small competitor to obtain the choice 
     first runs, and put a premium on the size of the circuit.'')


                     (b) No Pro-competitive Effects

       The Alliance cannot establish that its restrictive 
     agreements produce any pro-competitive effects. In fact, the 
     Alliance's own language reveals that it did not have even a 
     pro-compeititve purpose. The Alliance states that its 
     ``framework enhances the quality of postseason college 
     football match-ups, increases the likelihood of pairing the 
     two highest ranked teams in the nation in a bowl game, and 
     provides excitement for the coaches, players, and fans.'' 
     According to a recent Sports Illustrated article, the purpose 
     and effect of the Alliance is not to determine the true 
     national champion, but rather ``is to avoid the creation of 
     NCAA-run national playoffs. . . . The Alliance exists to keep 
     the power and the money in the hands of the Alliance bowls 
     and the four conferences that receive guaranteed berths in 
     those bowls. . . . Any national championship games that 
     result are a bonus.'' Layden, Tim, ``Bowling for Dollars,'' 
     Sports Illustrated, Dec. 16, 1996 at 36.
       The Alliance goals fall far short of actually allowing the 
     best teams to compete in the best bowls. The 1996 season is a 
     painful reminder of this fact. Instead of consumers getting 
     to watch a highly-competitive match-up between No. 5 ranked 
     BYU and another top-ranked team, they were forced to endure 
     two blow-outs in the Alliance: the Fiesta Bowl where No. 7 
     Penn State defeated No. 20 Texas 38-15, and the Orange Bowl, 
     where No. 6 Nebraska trounced No. 9 Virginia Tech 41-21. 
     These match-ups were based on membership in the Alliance, not 
     on merit.\3\
---------------------------------------------------------------------------
     \3\ Additionally, there is evidence which indicates that the 
     decision was not based on consumer preference. One poll is 
     reported to have shown that fans would have preferred the 
     following teams in an Alliance bowl: BYU--48%, Penn State--
     22%, and Colorado--21%. As the Court has stated, ``[a] 
     restraint that has the effect of reducing the importance of 
     consumer preference . . . is not consistent with [the] 
     fundamental goal of anti-trust law.'' NCAA, 468 U.S. at 107 
     (citation omitted).
---------------------------------------------------------------------------
       In short, the Alliance ``framework'' fails to enhance 
     competition, as well as failing to meet its own stated goals. 
     The rule of reason inquiry must end here where the anti-
     competitive restrictions are ``not offset by any pro-
     competitive justifications sufficient to save the plan . . . 
     .'' NCAA, 468 U.S. at 97-98.

                            III. Conclusion

       Based on the facts available at this time, it is clear that 
     the Alliance agreements fail under either a per se rule or a 
     rule of reason. As the Supreme Court has explained, ``the 
     essential inquiry remains the same--whether or not the 
     challenged restraint enhances competition.'' NCAA, 468 U.S. 
     at 104. The restrictive Alliance agreements reduce 
     competition in the lucrative New Year's bowls, and guarantee 
     every Alliance team an opportunity to reap the short- and 
     long-term profits of a high-visibility bowl. The Alliance not 
     only perpetuates the current power structure, but, in fact, 
     exacerbates it. The strong get stronger, while the rest get 
     weaker.
       As policymakers and football fans, we urge the Justice 
     Department to use its statutory enforcement powers to break 
     this lock on

[[Page S2617]]

     college football. We have every reason to believe that your 
     investigation will reveal additional evidence of the 
     Alliance's anti-competitive purpose and effects. Action must 
     be taken to restore genuinely open competition to college 
     football and to postseason bowls.
           Sincerely,
     Mitch McConnell.
     Craig Thomas.
     Robert F. Bennett.
     Mike Enzi.
  The PRESIDING OFFICER. The Senator from the home State of the BYU 
Cougars, the Senator from Utah.
  Mr. BENNETT. Mr. President, I thank you for that commercial. I must, 
in the spirit of full disclosure, report that I am not a graduate of 
Brigham Young University but of the University of Utah, which happens 
to be ranked in the top three in the current basketball season along 
with the University of Kansas and the University of Kentucky. I wish 
the Final Four could include Utah, Kentucky, and Kansas, but I am 
afraid Utah and Kentucky will have their showdown prior to the Final 
Four and only one of the two will make it. If it is not Utah--as I am 
confident, of course, that it will be--I hope, for the sake of my 
friendship with the Senator from Kentucky, that it will be Kentucky 
that goes to the Final Four with Kansas.
  But the very fact that we can have this conversation about the NCAA 
underscores the importance of what we are talking about with respect to 
football. These teams will get to the Final Four in basketball on the 
playing field and not in the boardroom. The decision will be made on 
the basis of how good they are and how entertaining they can be on 
television by virtue of their skill, rather than how sharp the 
negotiators were that put together the stacked deck in advance of the 
final event.
  I have a chart here that reports what happened in the last bowl 
circumstance. Every team in color, whether it is the two in yellow, the 
two in orange, or the two in red, appeared in an alliance bowl.
  The two teams in white, No. 2 and No. 4, that did not appear in an 
alliance bowl, appeared in the Rose Bowl, which is now part of the 
alliance. Only one of the top seven teams did not appear in a lucrative 
alliance bowl--and that happens to be the team from BYU.
  Rather than go on in a parochial fashion, as the Senator from the 
State in which BYU appears, I would like to summarize this circumstance 
from a source that is clearly not parochial and not particularly biased 
to BYU as a school.
  I am quoting from the article that appeared in Sports Illustrated on 
the 16th of December, 1996, entitled, ``Bowling For Dollars.'' In the 
article they made it very clear what the real criteria was here. 
Quoting from the article:

       Sunday's selections shed revealing light on the alliance. . 
     . , It was the shunning of Brigham Young, however, despite 
     the fact that the Cougars have a higher ranking and a better 
     record than either of the at-large teams chosen (Nebraska and 
     Penn State) by the alliance, that served to trash two widely 
     accepted myths.
       Myth No. 1: The purpose of the alliance is to determine the 
     true national champion.

  Sports Illustrated says:

       Not even close. The purpose of the alliance is to avoid the 
     creation of NCAA-run national playoffs. Such playoffs would 
     put the NCAA in charge of the beaucoup dollars the event 
     would generate. The alliance exists to keep the power and the 
     money in the hands of the alliance bowls and the four 
     conferences that receive guaranteed berths in those bowls.

  A fairly direct statement to the point raised by my friend from 
Kentucky.
  Now, Sports Illustrated goes on:

       Myth No. 2: The alliance bowls exist to give fans the best 
     possible games.
       Bowls are businesses, with major corporate sponsorship and 
     huge television deals. Their purpose is to fill stadiums, 
     generate TV ratings, and create precious ``economic impact'' 
     on their communities in the days leading up to the games.

  Now, Mr. President, comes the paragraph that makes it clear that 
Sports Illustrated is not necessarily friendly to BYU in every 
circumstance, but summarizes why this decision was made.

       BYU fails, not only on the strength-of-schedule issue but 
     also on the economic-impact side. Bowls, particularly the 
     Sugar Bowl, thrive on bar business. One of the tenets of the 
     Mormon faith is abstinence from alcohol. You do the math. In 
     the French Quarter, they don't call the most famous 
     thoroughfare Milk Street. ``We used to go to the Holiday 
     Bowl, and our fans would bring a $50 bill and the Ten 
     Commandments, and break neither'' says BYU Coach LaVell 
     Edwards. Nebraska fans, on the other hand, travel like 
     Deadheads, and spend like tourists.
       Choosing bowl teams based in significant part on the 
     rabidity and spending habits of their fans isn't fair to the 
     audience watching the bowls at home. For all its flaws, BYU 
     would even be a more intriguing opponent for Florida State 
     than a team the Seminoles have already beaten. Unfortunately, 
     money rules all matchups.

  Mr. President, BYU did go to a postseason game--the Cotton Bowl. The 
Presiding Officer from Kansas and this Senator from Utah entered into a 
friendly wager, which fortunately this Senator from Utah won when BYU 
beat the team from Kansas.
  Satisfying as that victory was for Brigham Young University, the 
point made by Sports Illustrated is still important. It is the fans on 
television who support the tremendous amount of money available to 
these alliance bowls, by tuning in and being available as an 
advertising audience.
  It is those fans who were deprived of the opportunity of seeing the 
best game available on New Year's Day.
  So for that reason, I am delighted to join in this effort to see to 
it that we do something to see that the antitrust laws apply here and 
that a conspiracy in a boardroom does not take place to siphon off the 
heavy money to one group at the expense of not only the other group but 
also of the fans.
  Mr. McCONNELL. Will the Senator yield for a question?
  Mr. BENNETT. Yes, I yield.
  Mr. McCONNELL. I am not sure it is a question, but rather an 
observation. Also, the BYU Cougars, as a result of the Cotton Bowl 
appearance probably--I don't have the figure in front of me, maybe 
staff does--probably got about $2.5 million as opposed to the roughly 
$8 million that would have been available had they been selected, as 
they obviously should have been selected, for an alliance bowl. We are 
talking not just about bragging rights here, we are talking about real 
money. We are talking about a $6 million differential, Mr. President. 
So this is not just putting a trophy in the school gym. This is a big 
business with huge economic implications.
  Mr. BENNETT. The Senator from Kentucky is exactly correct. One of the 
reasons, I am sure, why the Senators from Wyoming are joining in this 
effort is that under the rules of the Western Athletic Conference, 
Brigham Young would not take that money home by itself. It would be 
shared with the other schools in the conference, one of whom posted a 
sterling record themselves, the Wyoming Cowboys. They were frozen out 
of any bowl appearance at all on New Year's Day. They cannot even salve 
that particular wound with the money Brigham Young would distribute 
throughout the Western Athletic Conference with participation in an 
alliance bowl.
  As I said before, the money comes primarily from television revenues, 
and by creating a restraint-of-trade circumstance to hold those 
television revenues for a certain set of conferences, the leaders of 
the alliance have damaged every other conference in the country, 
including schools like Wyoming, which would have received a significant 
amount of money had it been available to the Western Athletic 
Conference.
  The message out of the alliance is: WAC need not apply, regardless of 
how their teams are or have ever been.
  I yield the floor.
  Mr. ENZI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Thank you, Mr. President. Today, I am pleased to join my 
colleagues, Senator Thomas from Wyoming, Senator McConnell from 
Kentucky, and Senator Bennett from Utah, in urging the Justice 
Department to exercise its enforcement powers to break the current 
anticompetitive lock on college football, if football does not do it 
itself.
  I have a special interest in college athletics. I followed college 
athletics for some years, and I enjoy the excitement and competition of 
college basketball and football. I especially enjoy the competition in 
the Western Athletic Conference. My son, Brad, played basketball at the 
University of Wyoming, and so I watched numerous WAC games, both as a 
Cowboy fan and as a father. I am disappointed to see the University of 
Wyoming and other very

[[Page S2618]]

competitive WAC teams kept out of the top college bowl games because of 
the anticompetitive College Bowl Alliance. These clandestine agreements 
keep our players on the bench and in the grandstand when they should be 
out there on the field.
  I think it is interesting we are discussing the anticompetitive 
effects of the college football alliance in the midst of the NCAA 
college basketball tournament. The NCAA basketball playoff system, 
while not perfect, aims to include the finest 64 college basketball 
teams in the Nation. In this tournament, any of those 64 teams has the 
possibility of winning the national championship. This arrangement is 
designed to maximize competition for the benefit of all the players, 
the fans, and the schools involved. In contrast, the College Bowl 
Alliance has decreased the competitiveness of college football to the 
detriment of the fans and schools involved.

  The alliance is a coalition of top football college conferences and 
representatives of the top post-season college football bowls. Over the 
past few years, the alliance has entered into a number of restrictive 
agreements designed to divide the market of the most highly lucrative 
New Year's football bowls. These agreements effectively preclude the 
nonalliance teams from having access to the most prestigious and 
lucrative bowl games, even when one of the nonalliance teams has a 
better record and a higher national ranking than any of the alliance 
teams. These restrictive agreements are bad for football, and they 
violate Federal antitrust law.
  Just this last January, as you have heard, 2 of the top 25 ranked 
football teams in the country fell victim to this anticompetitive 
alliance. Brigham Young University, a member of the nonalliance Western 
Athletic Conference, finished the year with a remarkable record of 13 
and 1 and was ranked 5th in the Nation. Another member of the WAC, the 
University of Wyoming, finished its regular season with a formidable 10 
and 2 record and a national ranking of 22, but it was not given an 
offer to play in any of the alliance bowls. In fact, as has been 
mentioned, despite its excellent year, the University of Wyoming was 
not given the opportunity to play in any post-season bowl game. This 
came as a great disappointment to the Cowboy fans nationwide.
  The alliance is bad for football since, as a practical matter, it 
prohibits teams from outside the alliance playing the top bowl games. 
The football games are now taking a back seat to the money games being 
played behind doors closed to both players and the fans. This has 
resulted in alliance teams having an institutional advantage in both 
bowl receipts and future recruiting.
  In 1996, the eight alliance bowl participants, including the teams 
playing in the Rose Bowl, split a total of $68 million. That was eight 
teams. In contrast, the 28 nonalliance participants divided a total of 
$31 million. This disparity in financial return is not good business. 
It results in a built-in advantage for alliance teams in the areas of 
future recruiting and program development.
  The alliance agreement provides unlawful economic protection for its 
members to the detriment of college football generally. The alliance's 
market allocation agreements have, in turn, hurt consumers. One poll 
has shown that college football fans would have preferred to have seen 
several nonalliance teams, including Brigham Young University and the 
University of Colorado, in top bowl games. These agreements amounted to 
changing the rules with 2 minutes left in the fourth quarter. These are 
precisely the type of market allocation agreements the Sherman 
Antitrust Act was passed to prohibit.
  I strongly urge the Justice Department and the Federal Trade 
Commission to use their statutory powers to end the alliance's 
anticompetitive stranglehold on college football if they cannot do it 
on their own.
  I thank the Chair and yield the floor.
  Mr. GRAMS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. McCONNELL. Will the Senator from Minnesota just allow me a couple 
minutes?
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I thank my good friend from Wyoming for 
his important contribution to this issue and express to our colleagues 
that we intend to stay interested in this. There is some indication in 
today's paper that some accommodation to the WAC and to the Conference 
USA may be forthcoming. But I want to reassure all of those who have 
been left out that the antitrust case is clear and that the four of us 
plan to continue our interest in this, if the problem is not solved by 
the organizations themselves. I thank my friend from Wyoming for his 
important contribution.
  Mr. BENNETT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. BENNETT. Mr. President, I would like to add one more statement 
for the edification and information of Senators. The Senator from 
Wyoming referred to his team's record of 10 and 2. One of those two was 
a loss to Brigham Young University literally in the last seconds with a 
field goal that no one expected anybody could make that caused the game 
to go into overtime, and then Brigham Young won in overtime.
  If that had gone the other way, it would have been Wyoming that would 
have earned the position that BYU was denied. They would have beaten 
the fifth ranked team, would have had a 10 and 1 record and would have 
been a clear choice for an alliance bowl. It was BYU's victory over 
Wyoming that pulled BYU to that level. That is why I am happy to join 
with him in saying we both got robbed.

  The PRESIDING OFFICER. The Senator from Minnesota has the floor.
  Mr. GRAMS. Thank you very much, Mr. President.
  Not to take away from the debate of my fellow Senators and friends 
here, I still have to just root on our Minnesota Gophers tonight as 
they take on Clemson in the ``Sweet Sixteen'' and hope and wish them 
the best.

                          ____________________