The Biggest Sports News of the Year?
By Zach
This news came across the wire yesterday: The NIT's anti-trust lawsuit against the NCAA is underway. You can read the ESPN story here.
Now, since I go to NYU, which owns 1/5th of the NIT, and I know NYU President John Sexton somewhat well, I knew about this lawsuit a year and a half ago. I also work in the NYU Athletic Department, which means I've heard some of the office scuttlebutt as well.
As far as I can tell, the NIT's lawsuit is based around the fact that it requires teams to sign an agreement each year that prohibits them from declining an invitation to the NCAA Tournament to play in any other tournament (i.e., the NIT). Now, while it seems silly to think that in 2005 a team would turn down the money and presteige that comes with an NCAA Tournament berth, it wasn't always that way. The NIT was the original college basketball tournament, and it was considered the pre-eminent post-season tournament until a point-shaving scandal involving prominent New York colleges (including NYU) ruined a good deal of its clout. Still it competed with the NCAA Tournament into the late 70s, which is when the NCAA decided to implement the non-compete rules. This came about because in 1970 Al McGuire, the coach of Marquette, decided that because he had a lot of players on his team from the New York area, he'd rather play in the NIT then the NCAA. Bobby Knight had done the same thing with his Army team in 1968. This, needless to say, pissed off the NCAA which tried to get McGuire kicked out of the sport and ended up creating the aptly-named "McGuire Rule" forcing teams to accept invites to the NCAA.
Now, since such a rule has the intent and effect of creating a monopoly, and because the NCAA forces its teams to sign the agreement every year, I've been told that the NIT's case is as close to a slam dunk(pun intended) as you can get. While I'm no law student, and don't have all the details, for the purposes of this discussion, we're gonna assume that the NIT is damn likely to win their case.
So all of this is well and good, but probably doesn't answer your biggest question, namely: what does all this mean for March Madness?
Well, the short answer is: I'm not sure.
The longer answer is: Possibly big trouble. If the U.S. District Court rules in favor of the NIT, they could do any number of things. They could force the NCAA to pay damages in some form or another. It seems likely they'd simply force the NCAA to forfit a portion of their proceeds from the tournament, which exceeds 1 billion dollars a year. They might, in addition, force the NCAA to let the NIT in on some revenue from their TV contract with CBS for the forseeable future, perhaps in perpetuity. They could force the NCAA to allow the NIT to compete on level ground for teams for a post-season tournament, perhaps even divying up the top teams in the country even for two competing tournaments, thereby ruining the appeal of the NCAA tournament as the ultimate arbitor of Who's Best in college basketball. Even if they don't devise such a precise system, the fact remains that the NIT would be free to try and poach teams from the NCAA tournament field. Would they be successful? I don't know, but I suspect that if they offered significantly more money than the NCAA, they might appeal to some teams which, while good squads, had little chance at a national title.
Now, I think it's unlikely that any of that will come to pass because I doubt the NCAA is going to gamble its cash cow on something as uncertain as a verdict in their favor. In fact, from what I've been hearing, it seems fairly likely that the NIT will accept some sort of cash settlement, though I suspect they'll want to be paid a percentage of the TV money in perpetuity, which may make the NCAA people cringe. But there is a sort of precedent for this. When the ABA and NBA merged in 1976, the ABA had to buy out two teams, the St. Louis Spirits and the Kentucky Colonels. The Colonels took a straight cash payment (3 million or so), but the Spirits ownership got 1/7th of the TV revenue from each of the four teams that did join the NBA (Nets, Spurs, Pacers, Nuggets) in perpetuity. So, just for being in the right place at the right time, the ownership of the Spirits gets 4/7ths of an NBA team's share of their TV contract with ABC/ESPN. Yeah, that's a sweet deal, and the same thing may happen to the NIT.
Now, since I go to NYU, which owns 1/5th of the NIT, and I know NYU President John Sexton somewhat well, I knew about this lawsuit a year and a half ago. I also work in the NYU Athletic Department, which means I've heard some of the office scuttlebutt as well.
As far as I can tell, the NIT's lawsuit is based around the fact that it requires teams to sign an agreement each year that prohibits them from declining an invitation to the NCAA Tournament to play in any other tournament (i.e., the NIT). Now, while it seems silly to think that in 2005 a team would turn down the money and presteige that comes with an NCAA Tournament berth, it wasn't always that way. The NIT was the original college basketball tournament, and it was considered the pre-eminent post-season tournament until a point-shaving scandal involving prominent New York colleges (including NYU) ruined a good deal of its clout. Still it competed with the NCAA Tournament into the late 70s, which is when the NCAA decided to implement the non-compete rules. This came about because in 1970 Al McGuire, the coach of Marquette, decided that because he had a lot of players on his team from the New York area, he'd rather play in the NIT then the NCAA. Bobby Knight had done the same thing with his Army team in 1968. This, needless to say, pissed off the NCAA which tried to get McGuire kicked out of the sport and ended up creating the aptly-named "McGuire Rule" forcing teams to accept invites to the NCAA.
Now, since such a rule has the intent and effect of creating a monopoly, and because the NCAA forces its teams to sign the agreement every year, I've been told that the NIT's case is as close to a slam dunk(pun intended) as you can get. While I'm no law student, and don't have all the details, for the purposes of this discussion, we're gonna assume that the NIT is damn likely to win their case.
So all of this is well and good, but probably doesn't answer your biggest question, namely: what does all this mean for March Madness?
Well, the short answer is: I'm not sure.
The longer answer is: Possibly big trouble. If the U.S. District Court rules in favor of the NIT, they could do any number of things. They could force the NCAA to pay damages in some form or another. It seems likely they'd simply force the NCAA to forfit a portion of their proceeds from the tournament, which exceeds 1 billion dollars a year. They might, in addition, force the NCAA to let the NIT in on some revenue from their TV contract with CBS for the forseeable future, perhaps in perpetuity. They could force the NCAA to allow the NIT to compete on level ground for teams for a post-season tournament, perhaps even divying up the top teams in the country even for two competing tournaments, thereby ruining the appeal of the NCAA tournament as the ultimate arbitor of Who's Best in college basketball. Even if they don't devise such a precise system, the fact remains that the NIT would be free to try and poach teams from the NCAA tournament field. Would they be successful? I don't know, but I suspect that if they offered significantly more money than the NCAA, they might appeal to some teams which, while good squads, had little chance at a national title.
Now, I think it's unlikely that any of that will come to pass because I doubt the NCAA is going to gamble its cash cow on something as uncertain as a verdict in their favor. In fact, from what I've been hearing, it seems fairly likely that the NIT will accept some sort of cash settlement, though I suspect they'll want to be paid a percentage of the TV money in perpetuity, which may make the NCAA people cringe. But there is a sort of precedent for this. When the ABA and NBA merged in 1976, the ABA had to buy out two teams, the St. Louis Spirits and the Kentucky Colonels. The Colonels took a straight cash payment (3 million or so), but the Spirits ownership got 1/7th of the TV revenue from each of the four teams that did join the NBA (Nets, Spurs, Pacers, Nuggets) in perpetuity. So, just for being in the right place at the right time, the ownership of the Spirits gets 4/7ths of an NBA team's share of their TV contract with ABC/ESPN. Yeah, that's a sweet deal, and the same thing may happen to the NIT.
posted by Zach at 3:36 PM
3 Comments:
The possibility that you've brought up before, but didn't bring up here, is the chance that someone other than the NCAA or NIT Tourneys, possibly a Malcolm Glazer type, possibly a shoe company, possibly NBC, will come up with the money to buy the top four teams in the nation to play a three game tourney, effectively cutting both major tournaments off at the head. The fact of the matter is that without some level of guarantee that the teams won't play in another tournament, the NCAA and NIT are both susceptible to some entity luring away just four teams for their own championship-crowning moment. The hard decision to make, but one that could be done, is to make the NCAA Tourney one big-ass brackey, with all 220 teams. Teams on probation would automatically be seeded worst, giving multiple byes to the best teams, and so on. They could even set it up so that the number one seeds played on the road for their first game. Can you imagine Illinois traveling to the University of Hartford (U of H Athletics) and playing in front of a sell out crowd of 4,500? Anyway, that's my spiel.
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You are correct that Al McGuire prompted the NCAA's rule change about accepting the bid offered to their own tournament. However, pls note that Coach Al made his decision during the 1970 season (that might have been his best team, led by Dean Meminger). MU went on to win the NIT title that season.
Coach Al retired in 1977. Hank Raymonds was coaching Marquette in 1978 -- a team that failed to live up to post-season expectations.
Marquette Hoops, thanks for the correction, and the original post has been changed to reflect it.
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