As anyone who follows college football knows, the University of Michigan is under investigation by the NCAA and Big 10 Conference for “sign stealing,” gathering information on signal game of future opponents. Given Michigan’s national title aspirations, the possibility of sanctions is obviously bad news. Michigan now has retaliated with evidence that three other Big 10 teams – Rutgers, Ohio State and Purdue – shared Michigan’s signs. You what are you aside, it turns out that sign stealing is not prohibited per NCAA rules. Rather, the question is whether Michigan (or other teams) violated NCAA Rule 11.6.1 which prohibits “in-person, off-campus scouting of future opponents (during the same season).”
Before addressing the antitrust issues raised by the application of this rule, let me clarify that although I am employed by the University of Michigan, I do not represent it. These comments are solely my personal opinion. Also, while I obviously don’t want Michigan to be penalized, I also wouldn’t want Maize and Blue, or anyone else, to get away with cheating. Right is right and wrong is wrong.
But the question of “cheating” is at the heart of the antitrust problem. As already mentioned, there are apparently no rules regarding gathering intelligence on an opponent’s signs. If a school can do this by reading lips on a television screen, more power to them. The relevant rule does not concern the integrity of the game such as 11 men on the field or ineligible receivers. According to MLive, the rule was adopted in 1994 “as a cost-cutting measure designed to promote fairness for programs that could not afford to send scouts to other games.” ” In other words, if Michigan cheated, it cheated a financial rules rather than those concerning the game itself.
Enter antitrust law. In recent years, NCAA rules that limit economic competition among member schools have faced serious antitrust problems. In 2021, the Supreme Court unanimously ruled that the NCAA’s enforcement of rules limiting member schools’ compensation of student-athletes up to the full cost of their education violates Section 1 of the Sherman Act. National Collegiate Athletic Ass’n v. Alston, 141 S.Ct. 2141 (2021). Six years earlier, the Ninth Circuit made a similar decision regarding the NCAA’s restrictions on student-athletes’ name, image and likeness rights. O’Bannon v. National Collegiate Athletic Association, 802 F.3d 1049 (9th Cir. 2015). In the more distant past, the Supreme Court ruled that the NCAA’s limitations on television broadcasts violated the Sherman Act. Assn. national college sports. v. Board of Regents of the Univ. from Okla., 468 U.S. 85 (1984). The common thread in these cases is that NCAA rules that prevent member schools from freely determining how to allocate their resources may run afoul of antitrust laws, even though (or perhaps because) those rules are designed to achieve intercollegiate economic parity.
To the extent that Regulation 11.6.1 is intended to prevent schools from competing economically by determining how much to spend on their athletic programs, it squarely clashes with Alston, O’BannonAnd Board of Regents. The NCAA or Big 10 might have a chance to justify this rule by equalizing economic spending among member schools to promote competitive balance. The NCAA has made such arguments in the past and, O’Bannon the Ninth Circuit recognized that promoting competitive balance could constitute a legitimate justification in favor of competition. in theory. The problem is that the courts have rejected the competitive balance rationale in practice. See, Alston, 141 S.Ct. at 9:52 p.m. (observing that the NCAA had unsuccessfully attempted to justify its player compensation rules as promoting competitive balance); O’Bannon, 802 F.3d at 1072 (“We () accept the district court’s factual findings that the compensation rules do not promote competitive balance.”). Anyone who attempts to justify Regulation 11.6.1 as promoting competitive balance will have a difficult task.
This is a bad time for the NCAA or the Big 10 to rattle the antitrust cages. Courts are already unhappy with NCAA rules that limit economic competition, and the Justice Department has shown increased interest in antitrust issues in sports. The sign-stealing scandal may be a source of jokes or righteous (hypocritical?) indignation for now, but it could spark something that no one in the NCAA or Big 10 would want. Warning emptor.
Daniel A. Crane is the Richard W. Pogue Professor of Law at the University of Michigan Law School.
