Evidence Exists to Deem the NCAA a State Actor

May 9, 2008

By Kadie Otto, Ph. D., Assistant Professor of Sport Management,
Western Carolina University
Most recently, my colleague(1) and I presented a paper at the inaugural College Sport Research Institute (CSRI) conference held at The University of Memphis(2). In this paper, entitled “The NCAA: A case for state action,” we presented the factual evidence and the legal underpinnings which could lead a future court to hold the NCAA to be a state actor.
First, we gave an overview of the Supreme Court’s “entwinement” analyses as applied in the cases of Burton v. Wilmington Parking Authority(1961) and Evans v. Newton(1966), and described how the lower courts found private athletic associations to be state actors in the high school setting and the NCAA to be a state actor pre-Tarkanian(1988). Then, we highlighted the Blum-trilogy (Blum v. Yaretsky, 1982; Rendall-Baker v. Kohn(1982); and, Lugar v. Edmondson Oil Co. (1982) which restricted the state action doctrine and described how courts subsequent to the Blum-trilogy concluded the NCAA was not a state actor.
In the Supreme Court’s Tarkanian analysis, in which it concluded that the NCAA was not a state actor, it relied in large part on the rationale that a member school has a voluntary choice to withdraw from the NCAA should it disagree with a NCAA sanction. The reality of big-time college athletics, however, is that a NCAA member school’s voluntary withdrawal is not actually voluntary but rather a case of “economic duress”(3).
Additionally, Brentwood(2001) and Burton(1961) recognized that the ability to voluntarily withdraw from unconstitutional behavior is not determinative of whether state action exists where the relationship is otherwise so interdependent as to make that “choice” a nullity. Brentwood is also important in that it acknowledges the modern-day practical reality that public schools must depend upon private athletic associations to carry out an integral part of their educational mission and that their joint participation in that endeavor is a factor in finding state action.
Finally, we analyzed the relationship between the public school members and the NCAA and applied Brentwood and Burton to conclude the NCAA, like the high school athletic associations, should be deemed a state actor: 1) public membership– while the NCAA’s total membership is 44% public, Division I (which brings in over 98% of the NCAA’s total revenue) consists of 66% public schools. Further, the NCAA allocated $420 million to Division I and just $27million to Division II and $19.5 million to Division III; 2) voting members who adopt rules/regulations are public– The four most powerful committees in the NCAA are the Executive Committee (71% public), the Board of Directors (78% public), the Management Council (80% public), and the Committee on Infractions (80% public); 3) enforcement–Since the inception of the NCAA’s enforcement arm in 1953, 67% of all members charged with a major violation have been public schools. Furthermore, of those members who have committed three or more major violations (up to eight), 86% are public.; 4) public schools’ educational obligation: (a) athletics integral– Public schools meet a portion of their educational objectives, in part, through athletics—which they have delegated control of to the NCAA, (b) schools have a financial stake in the system. Consider the following annual university athletic department budgets: Oregon $50 million, Alabama $82 million, Michigan $89 million, Tennessee $95 million, Texas $105 million, and Ohio State and Florida, each, at $109 million. What’s more, tax payer dollars contribute to funding coaches “educational” salaries (over 100 college coaches make $1 million/annually or more and over a dozen coaches make $2 million) (c) there is a need for a mechanism to regulate competition; 5) associations’ money making capacity is derived from public schools; and, 6) existence of association depends on public school members–An examination of championship revenue revealed that 98% of the NCAA’s total revenue is generated by the Division I men’s basketball tournament ($6 billion/11-year television contract with CBS). Of the teams who have made the NCAA tournament from 1939-2006, 63% are public. Therefore, 98% of the NCAA’s annual revenue is being generated by just 6% of its total membership, of which 63% are public.
Based on existing case law, the factual evidence exists for a court to deem the NCAA a state actor. For a court to hold otherwise ignores the dilemma public schools face when they are subject to constitutional standards but are not in a position to withdraw from the NCAA when those standards conflict with the NCAA rules. Further, it overlooks the incentives (or disincentives) of the business of intercollegiate athletic competition. While it is certain that the NCAA does need the ability to enforce its rules uniformly, it should not be granted the ability to do so at the expense of constitutional rights.
1. Kristal Stippich, J.D., Gass Weber and Mullins, LLC
2. April 17-20th, 2008
3. Economic duress is “an unlawful coercion to perform by threatening financial injury at a time when one cannot exercise free will” (Black’s Law Dictionary, 7th ed., p. 521).


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