WASHINGTON (CN) – Sen. Orrin Hatch led a hearing Tuesday to investigate the college football Bowl Championship Series for what he considers antitrust law violations. “The architects of the BCS system appear to have intentionally excluded teams from non-privileged conferences, not on the basis of competition, but due to pre-arranged agreements,” Hatch said.
Hatch, R-Utah, who asked for the Senate Judiciary Committee hearing and was the only one to ask questions, recommended that the Department of Justice investigate the BCS. He accused the organization of price fixing, and called it a monopoly that violates the Sherman Antitrust Act.
“We are aware of the senator’s request and we will respond as appropriate,” said a spokeswoman for the Department of Justice, who refused to be named.
BCS Presidential Oversight Committee Chairman Harvey Perlman denied the antitrust claims, saying that the financial benefits of being part of a privileged college are trivial and that the current system is the most fair. Perlman warned that if the series were determined to have violated the law, it would have to dissolve because there is no way to make the team selection completely fair.
Only six conferences get automatic bids to participate in the BCS, the lucrative series of games leading up to the so-called national championship. These conferences also get a much larger portion of the revenue than the other five conferences, assuming the other conferences earn a spot in the series.
Under the system, the players in the championship game are determined by polls and computer rankings – which often are surrounded by controversy – and have resulted in the final game’s common nickname, the “mythical national championship.”
Many hearings have been held on the legality of the championship series system. The most recent was in the House a month ago. In January, a bill was proposed in the House that would cut federal funding to schools that play in the series unless the BCS uses a playoff system to determine who participates in the national championship game.
Barry Brett, a lawyer for the Mountain West Conference, testified before the committee. Just last year, a school in the conference, Utah, was not admitted to play in the post-season series even though it was undefeated during the season. Florida and Oklahoma played for the championship, both of them entering that game with one loss.
“The BCS embraces favoritism rather than fairness,” said Utah President Michael Young, taking the moral high ground. “We have a responsibility to teach and encourage our students to strive to make all playing fields in life level.”
Perlman of the BCS was less idealistic. “That’s the way the world is,” he replied.
He added that the public, the television networks, and the bowl organizations would not consider the national championship viable if it did not include schools such as Oklahoma, Texas, Florida, Georgia, Penn State, Miami, Florida State, Notre Dame, West Virginia, USC, Ohio State, Michigan and the University of Nebraska.
“With all due respect, this is not true of the other conferences,” Perlman said.
But Hatch said the federal funding and tax exemption that the schools enjoy, in addition to their role as schools, hold them “to the highest legal and ethical standards.”
Hatch cited the Sherman Antitrust Act, which forbids contracts and conspiracies to limit competition. He said the discrepancy in financial awards to non-privileged conferences and the preferences in admission violate the law.
“BCS bowls constitute a market all their own,” Hatch said, and characterized the national championship as a separate market. “The BCS enjoys a monopoly over both these markets and has, through what appears to be deliberate action, restricted the ability of teams from non-privileged conferences to participate.”
In his rebuttal of the antitrust allegations, Perlman, who is chancellor of the privileged University of Nebraska, argued that the BCS revenue was not enough to drastically affect a school’s competitiveness.
The University of Nebraska has a $75 million annual budget, and earned $1.5 million from series revenue. This makes up only 2 percent of the school’s revenue, he said.
The BCS “continues to be the fairest and most sensible way to determine a national champion in the Football Bowl Subdivision,” Perlman insisted.
He said the problem is that there is no definitive way to select the teams for the BCS because the teams of the conferences do not all play one another.
“If the antitrust laws prohibit such an agreement, then the only alternative is to return to the old bowl system that operated in 1901 to 1991,” Perlman said. Under that system, each conference negotiated its own bowl arrangements individually.