My turn | College Football Playoffs: A $7.8 Billion Shell Game | Guest comments

CFP Administration LLC (better known as CFP, short for College Football Playoff) and ESPN signed a $7.8 billion, six-year media deal in March.

The CFP is a limited liability company serving 10 Football Bowl Subdivision conferences (the Big Ten plus the American Athletic, Atlantic Coast, Big 12, Conference USA, Mid-American, Mountain West, Pac-12, Southeastern and Sun Belt) and Notre Dame.

The CFP website reports that university presidents and chancellors of these institutions administer the championship playoffs.

Recently, the CFP-ESPN TV deal landed on the radar of sports labor lawyers.

While the CFP is not a defendant at this time, the massive TV deal on behalf of FBS conferences adds to the ongoing fiction that college football players are not employees.

But first, let’s look at the history of TV in college athletics.

In the beginning

The University of Pennsylvania broadcast the first college football game in 1938. Penn broadcast games from 1940 to 1950.

Then the NCAA got involved.

A three-person “television committee” reported at the 1951 NCAA convention that television was hurting attendance. This put pressure on school finances to pay for athletic departments and facilities.

From 1952 to 1977, the NCAA TV Commission rationed how often a school could appear on national and regional broadcasts. The NCAA showcased smaller schools with powerful football teams.

The big schools were annoyed by this monopoly on television games.

In 1977, five major football conferences organized the College Football Association.

Initially, the CFA tried to work within the NCAA to bring in more televised games.

The NCAA opposed the CFA’s ideas, so the University of Oklahoma – and other schools – sued the NCAA under the Sherman Antitrust Act.

In 1984, the Supreme Court ruled in favor of the schools, stating that “the NCAA’s television plan constitutes a prima facie barrier to the operation of a free market.”

This ushered in the era of conference-based TV contracts.

The CFA, Big Ten and Pac-10 competed against each other by selling their games as broadcast packages.

More recently, the power conferences turned to network broadcasting for themselves.

Which brings us to an important fact about college football TV revenue: Power conferences – not the NCAA – have controlled this money for more than four decades.

This financial reality has put the CFP’s latest TV deal on the radar of sports labor attorneys.

‘Price-determining labor’

Looking back from 2016 to the present, the House of Representatives antitrust settlement uses power conferences and NCAA TV revenue to recover $2.8 billion in name, image and likeness damages for athletes.

This case is solely about allowing athletes to “share in the commercial benefits of the conferences and schools they host by exploiting the names, images and likenesses of student-athletes.”

This case is not based on the NCAA’s misappropriation of unpaid labor, but rather on the unlawful exploitation of the player NIL broadcasts.

Looking ahead – and considering $7.8 billion in future revenue from football games – another antitrust case, Fontenot v. NCAA, takes advantage of three recent developments.

First, lawyers for the new case say the case in the House of Representatives centers on NIL, not unpaid labor.

Second, the House settlement does not take into account the $7.8 billion TV deal between the CFP and ESPN, which will generate huge revenues for major athletic programs that don’t pay athletes a dime for their work.

In fact, the House settlement strictly prohibits the employment of athletes.

Third, Fontenot’s attorneys are using Supreme Court Justice Brett Kavanaugh’s blueprint in NCAA v. Alston to challenge the NCAA’s wage-fixing practices.

He said that “the NCAA’s business model would be outright illegal in virtually any other industry in America.” He continued: “Price-setting labor is price-setting labor.”

Fontenot’s complaint says that “the athletes are not getting their fair share of these billion-dollar revenues… even though they – the athletes – are the primary driver of those revenues through their labor.”

It claims: “However, by acting as a cartel, Defendants have suppressed athletes’ labor compensation for decades.”

Furthermore, “This case is not about NIL – it is about allowing revenues to be allocated by the free market rather than the restrictive and unlawful rules of a labor cartel that abuses the athletes who are the main source of its vast income.”

Exploiting athletes

Now let’s return to the CFP-ESPN TV deal that mainly benefits the power conferences.

It is completely outside the House of Representatives settlement (although the NCAA and power conferences continue to dispute this point).

The irony of it abounds, exposing a greedy financial game.

The first irony is that this TV deal reflects the intense frustration felt by power conferences that opposed the NCAA’s monopoly allocation of TV games.

The power conferences won their case at the Supreme Court in 1984, moving billions of dollars in football television revenue out of the hands of the NCAA.

In the Fontenot case, the new CFP-ESPN TV deal portrays the power conferences as labor market monopolies that pay nothing for the labor that creates so much value in these playoff games.

A second irony is that the power conferences have piled up billions of dollars in revenue over the past four decades by adhering to the NCAA’s restrictions against pay-to-play.

After defeating one NCAA monopolistic practice (TV game allocation) in the 1980s, the power conferences have shamelessly exploited another NCAA monopolistic practice, setting labor costs for each football player at zero dollars.

A third irony is that the power conferences have found a championship supplier – CFP Administration LLC – to host their football championship event outside of the NCAA’s governing body.

But now that they’ve moved their TV revenue and distribution to CFP Administration LLC in a clever game, the power conferences’ self-dealing scheme leaves them open to a new antitrust labor complaint.

When you string these ironies together, you see why the Fontenot case goes beyond the settlement in the House of Representatives — a settlement in which the power conferences and the NCAA intend to put an end to all other antitrust suits.

At its core, Fontenot v. NCAA is about whether the college football players we watch during the playoffs are paid for NIL alone, or NIL and their labor, like professional athletes.