{"id":4081,"date":"2005-09-13T14:49:39","date_gmt":"2005-09-13T18:49:39","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/formerlyknownas\/2005\/09\/13\/antitrusters-question-ncaa-pu"},"modified":"2011-08-05T14:57:24","modified_gmt":"2011-08-05T18:57:24","slug":"antitrusters-question-ncaa-purchase-of-nit","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2005\/09\/13\/antitrusters-question-ncaa-purchase-of-nit\/","title":{"rendered":"antitrusters question NCAA purchase of NIT"},"content":{"rendered":"

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In a letter<\/A>, yesterday, to the Federal Trade Commission, Department of Justice, <\/FONT><\/FONT><\/DIV>
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and New York Attorney General Spitzer, the American Antitrust Institute<\/A> called for <\/FONT><\/FONT><\/DIV>
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investigation of the private antitrust settlement in which the NCAA and the NIT agreed <\/FONT><\/FONT><\/DIV>
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to merge their tournaments. In its settlement with Metropolitan Intercollegiate Basketball <\/FONT><\/FONT><\/DIV>
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Association, NCAA agrees to purchase the National Invitational Tournament for $40.5 <\/FONT><\/FONT><\/DIV>
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million, plus $16 million to settle the suit, which is pending in the the SDNY federal <\/FONT><\/DIV>
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district court.  (ESPN.com, “NCAA buys tournaments<\/A>, ends NIT litigation,” by Andy <\/FONT><\/DIV>
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Katz, Aug. 17, 2005; Sports Law Blog<\/EM> has a <\/FONT>case summary<\/FONT><\/A> and an <\/FONT>analysis<\/FONT><\/A> of <\/FONT><\/FONT><\/DIV>
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the settlement; Skip Sauer at Sports Economist<\/EM> has also looked at the <\/FONT>case<\/FONT><\/A> and <\/FONT><\/FONT><\/DIV>
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the <\/FONT>settlement<\/FONT><\/A>).<\/FONT><\/FONT><\/DIV>
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<\/FONT><\/FONT> <\/DIV>
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\"bballGuys\"  In calling for an antitrust merger investigation by one or more of the agencies, <\/FONT><\/DIV>
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the AAI <\/FONT>letter, signed by its Vice President Diana Moss, explains, in part:<\/FONT><\/DIV>
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Even a cursory look into the proposed settlement raises serious questions <\/FONT><\/DIV>
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about the health of competition in post-merger markets. For example, the <\/FONT><\/DIV>
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NCAA would be in a position, post-merger, to impose its “mandatory participation” <\/FONT><\/DIV>
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rule for both the NIT and its own tournaments. This would erect an insurmountable <\/FONT><\/DIV>
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barrier to entry into post-season play.  <\/SUP>In enhancing their market power in acquiring <\/FONT><\/DIV>
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tournament teams, the NCAA would in turn enjoy significantly more market power <\/FONT><\/DIV>
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in sales of broadcast rights, sponsorships, concessions, and event tickets. The <\/FONT><\/DIV>
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proposed deal thus packs a double punch for consumers. Schools would have fewer <\/FONT><\/DIV>
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options and face potentially non-competitive terms for post-season tournament play. <\/FONT><\/DIV>
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And sponsors and consumers of the tournament games would potentially face higher <\/FONT><\/DIV>
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prices.<\/FONT>  <\/FONT><\/DIV>
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Based on information that is publicly available, AAI believes that there is a significant <\/FONT><\/FONT><\/DIV>
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probability that the effect of the proposed merger may be to significantly lessen (or <\/FONT><\/FONT><\/DIV>
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eliminate entirely) competition between organizers in acquiring men’s Division I basketball <\/FONT><\/FONT><\/DIV>
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teams for participation in post-season tournaments. NCAA President Myles Brand could <\/FONT><\/FONT><\/DIV>
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not have said it more succinctly when he noted in regard to the August 16th settlement: <\/FONT><\/FONT><\/DIV>
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“We’ve now unified post-season basketball.”  <\/FONT><\/FONT><\/DIV>
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                                                                                                                   \"bballHoop\"<\/FONT><\/DIV>
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The merger would spell an end to the NIT which, once upon a time, was an equally-matched <\/FONT><\/FONT><\/DIV>
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and vigorous competitor to the NCAA. But a series of actions by the NCAA has diminished <\/FONT><\/FONT><\/DIV>
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that competition, to the detriment of consumers. The proposed consolidation would further <\/FONT><\/FONT><\/DIV>
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hurt consumers and preclude the emergence of a stronger rivalry between the NCAA and NIT <\/FONT><\/FONT><\/DIV>
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(and with respect to new upstarts). An antitrust investigation of the merger could focus on <\/FONT><\/FONT><\/DIV>
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such <\/FONT><\/FONT>key issues as market definition (which was controversial in the MIBA v. NCAA litigation);<\/FONT><\/FONT><\/DIV>
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the <\/FONT><\/FONT>significant potential for <\/FONT>unilateral exercise of market power; and the entry barriers created <\/FONT><\/FONT><\/DIV>
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by <\/FONT><\/FONT>the merger. Moreover, the inquiry should extend to the likely effects of the merger on pre<\/FONT><\/FONT><\/DIV>
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season <\/FONT><\/FONT>tournaments by giving the NCAA the “green light” to enact a pending rule that <\/FONT><\/FONT><\/DIV>
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would replace <\/FONT><\/FONT>independent tournaments with events the NCAA can control.<\/FONT><\/FONT><\/DIV>
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See <\/FONT>Government Should Investigate Merger that Is Part of Basketball Tournament Settlement, AAI Says<\/FONT> <\/FONT><\/A><\/FONT><\/DIV>
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(Sept. 13, 2005)<\/FONT><\/FONT><\/DIV>
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Of course, few readers of this weblog are old enough to remember the time when the NIT “was <\/DIV>
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an equally-matched and vigorous competitor to the NCAA.”<\/FONT><\/FONT><\/DIV>
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update<\/FONT><\/STRONG><\/EM> (Sept. 14, 2005):  See our follow-up, not just NIT-picking<\/FONT><\/A>.<\/DIV>
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the bounce
of raindrops
on the basketball <\/FONT><\/DIV><\/BLOCKQUOTE>
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      w.f. owen<\/STRONG><\/FONT><\/A> <\/STRONG><\/FONT><\/DIV>
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         Frogpond<\/EM> XXIII:3 (2000)<\/FONT><\/DIV><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE>
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\"bballGuys\"<\/FONT><\/DIV>
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boy shooting baskets–<\/FONT><\/FONT><\/DIV>
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deep snow piled<\/FONT><\/FONT><\/DIV>
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all around him<\/FONT><\/FONT><\/DIV>
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<\/FONT><\/FONT> <\/DIV>
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       <\/FONT><\/FONT>lee gurga<\/FONT><\/STRONG><\/A> <\/FONT><\/STRONG><\/FONT><\/DIV>
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       <\/FONT>   from <\/FONT><\/STRONG>Fresh Scent<\/FONT><\/EM><\/A><\/FONT><\/FONT><\/DIV>
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      <\/FONT><\/FONT>                                                                          <\/FONT><\/FONT><\/DIV><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE><\/BLOCKQUOTE>
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