Utah Attorney General Mark Shurtleff is preparing to file an antitrust lawsuit later this year against college football's Bowl Championship Series alleging that its postseason system is an illegal monopoly that restrains free trade.

The core of Shurtleff's argument is that the BCS - which includes the Fiesta, Orange, Rose and Sugar bowls - rewards six major football conferences at the expense of five others. The arrangement, he argues, creates a system of haves and have-nots in which the favored six conferences have more access to and receive more bowl earnings than their less powerful cousins.

"This scheme is set up so that it doesn't promote full, free competition. It enriches a certain group," Shurtleff said. "We believe the law is on our side, and they (BCS) are breaking the law."

Bill Hancock, BCS executive director, said the organization and its bowls believe their system is on solid legal ground.

Begun in the 1998-99 season, the BCS is a partnership among 11 college-football conferences, the University of Notre Dame and four major bowls - the Fiesta, Orange, Rose and Sugar. The bowls generate their income from the games, sponsorships and TV contracts. Last year, the combined BCS payout was nearly $182 million, with roughly 80 percent of the money going to the six major conferences that created the BCS.

The system selects teams to play in each of the four major bowls plus a fifth, rotating game that determines a national champion. By design, the formula for choosing those matchups automatically selects the top team from each of the six original conferences - the Atlantic Coast, Big East, Big Ten, Big 12, Pac-12 and Southeastern. Five other conferences get a shot only when their teams play well enough.

The pending suit is one of several legal obstacles now facing the BCS and its bowls as they come under closer scrutiny:

- The U.S. Department of Justice met with Hancock June 30. A department spokeswoman said officials continue to review information to determine whether the BCS violates antitrust laws.

- The Sugar Bowl last week acknowledged that it improperly made $3,000 in campaign contributions to the former governor of Louisiana in 2004 and 2006. The Sugar Bowl is run by a non-profit organization. Federal law prohibits non-profits from making campaign donations. The Sugar Bowl reported its violations to the Internal Revenue Service following an investigative report aired by cable-TV network HBO.

- The Fiesta Bowl has worked with the IRS to retain its non-profit status. That status was threatened by an internal investigation that concluded Fiesta Bowl employees misspent bowl money and used some funds in a manner not consistent with the bowl's non-profit purpose, including reimbursing employees for campaign contributions and taking lawmakers on out-of-state trips.

- The Arizona Attorney General's Office continues a criminal investigation of the Fiesta Bowl that began in summer 2010. The probe initially examined whether campaign-finance laws were broken by employee political donations but expanded after the Fiesta Bowl in late March turned over findings of potentially criminal activity.

The Arizona Republic has learned the FBI and the U.S. Attorney's Office in Phoenix are working in cooperation with the Arizona Attorney General's Office on the case. The U.S. Attorney's Office and the FBI would not confirm nor deny they were involved in the case. The Arizona Attorney General's Office had no comment.

- The Maricopa County Attorney's Office is investigating whether elected officials broke laws by accepting from the bowl gifts that included out-of-state trips and stays at luxury hotels like the Ritz-Carlton in Chicago. The case is ongoing.

- Playoff PAC, a small Washington, D.C.-based group that includes attorneys, filed a complaint with the IRS asserting that executive compensation and benefits provided by the non-profit organizations that run the Fiesta, Orange and Sugar bowls are excessive for tax-exempt non-profits. The IRS declined comment.

In August, Playoff PAC also filed complaints with attorneys general of nine states, asking them to investigate a Fiesta Bowl contract with the Scottsdale Convention & Visitors Bureau. The contract requires teams playing in the Fiesta Bowl and BCS title games to stay in Scottsdale-area resorts for a set number of days, with the visitors bureau paying the bowl hundreds of thousands of dollars a year in return.

While the various legal issues have created distractions and negative publicity for the BCS and its bowls, Hancock said he is confident they are not violating antitrust laws.

"We take all of these issues very seriously," Hancock said.

Hancock and the bowls consider Playoff PAC more of an annoyance than a legal concern.

"They have had little to no effect," Hancock said.

Utah locked out, AG says

Shurtleff hopes to be the game-changer. Re-elected in November 2008 for a record third term as Utah attorney general, he became an adversary of the BCS after the University of Utah, his law-school alma mater, went undefeated in 2004 and 2008.

The Utes at the time were in the Mountain West Conference.

The Mountain West and four others - Mid-American, Sun Belt, Western Athletic and Conference USA - have BCS contracts, but their champions do not get automatic spots in a BCS bowl.

Instead, they may be invited to fill one of the remaining spots, after the bowls place the champions of the six power conferences.

The BCS invited Utah to play in the 2005 Fiesta Bowl and 2009 Sugar Bowl at the end of its undefeated seasons - it throttled its power-conference opponents - but neither was the championship game. Shurtleff thought Utah deserved to play for a title.

Shurtleff alleges Utah was locked out because the BCS rating system that selected the top two teams to play in those championships is unfair. The BCS rating system is based on a ranking formula that takes into account polls and strength of schedules.

Only teams from the six original conferences have played for a national championship since the BCS began. Those conferences by contract get most of the revenue.

Shurtleff said the BCS makes it impossible for a "Cinderella story" to exist in college football because "no matter how good you are, you will never play for a national championship. It's the scheme that is set up."

Utah viewed the situation seriously enough that in 2010 it bolted the Mountain West Conference for the Pac-10 (now called the Pac-12) in order to have a shot at a national championship appearance and to earn a bigger payout.

In the five bowl games in 2012, each of the six power conferences will get a payout of at least $22.3 million, with payout money coming from bowl revenue, television-network contracts and corporate sponsors. Each conference decides how to distribute its payout. There is no set national formula, but each conference member usually gets a share.

The five other BCS conferences together will share $26.4 million in the upcoming year if any one of their schools is invited to play in a BCS game. If none gets a BCS bid, they share $13.2 million under BCS rules.

To fill all 10 bowl spots in a given year, the BCS also has at-large invitations it may extend to teams from member conferences or independents ranking high in the polls. Conferences sending at-large participants will get $6.1 million in the coming bowl season. Some money also is distributed to independent schools.

Bowl-game selection is largely determined by teams' performance during the season and their conference membership. Most highly ranked universities come from the BCS' six original conferences. BCS critics say that makes the system inherently biased against the other conferences whose teams typically do not rank highly at the start of the season and can't climb high enough in the polls once the season starts.

"The BCS is anti-competitive and harmful for many reasons," said Alan Fishel, an antitrust attorney representing the Mountain West Conference and Boise State University, which this year became a member of that conference. "For one thing, it basically eliminates almost half of the teams before the season even starts."

Even if a team from a smaller conference were to make it to the BCS title game, that conference would get a fraction of the $22.3 million payout guaranteed to a power conference.

Teams that don't make the bowls face similar disparities. In 2009-10, for example, the Mountain West Conference and what was then the Pac-10 Conference each sent one team to a BCS bowl. Other teams in the Mountain West received $614,000 each from the conference's BCS payout. Other teams in the Pac-10 each received $1.8 million in BCS money, according to University of Utah records.

Monopoly alleged

Shurtleff said even though Utah changed conferences and will now receive additional shares of the BCS money, he is pressing his lawsuit because he believes the BCS still damages other universities such as Utah State, a member of the Western Athletic Conference.

Shurtleff's office earlier this year solicited proposals from law firms specializing in antitrust cases to help represent Utah. He said a firm will be chosen by the end of October and a lawsuit will follow shortly in U.S. District Court in Utah.

In it, he will allege the BCS is a monopoly that restrains free trade and full competition because schools from the five non-automatic qualifying conferences have unequal access to BCS bowls. And, he argues, the BCS engages in price fixing because conferences cannot negotiate with bowls on payouts. If proven, the allegations would violate the federal Sherman Antitrust Act. Shurtleff said he is hoping other states will join him.

He also has met with the U.S. Department of Justice on the matter. The Justice Department declined comment, except to confirm it still was reviewing information on whether to pursue a full antitrust investigation.

Hancock and other supporters of the BCS understand a lawsuit may be imminent, but they express confidence that the BCS and its bowls are on firm legal ground. Hancock said all 11 conferences contracting with the BCS have access to the BCS bowls, and there is more money today in college football than ever before.

University of Nebraska Chancellor Harvey Perlman, who has twice testified before Congress defending the BCS against antitrust accusations, agreed. While payouts are comparatively higher for the BCS' six major conferences, he said, the other five conferences are receiving more money now than prior to the creation of the BCS in 1998-99, and they now have a shot at a top bowl appearance, unlike in the past.

The reason the six major conferences receive larger shares of BCS money, Perlman said, is because they created the system, they play in larger stadiums before more fans, and they drive lucrative television contracts.

"I don't see a fairness issue," Perlman said. "The reality of the marketplace is, the major teams in the automatic qualifying conferences generate the TV revenue that supports the Bowl Championship Series. . . . Resources flow to those who generate them."

Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478.

John Zidich, CEO and publisher of The Arizona Republic, is a former member of the Fiesta Bowl's board of directors and was on the bowl's five-member executive committee from January 2010 to April 2011. The Arizona Republic is a Fiesta Bowl advertising sponsor.