By: Adam Blaier
The game-changing college sports court case (no pun intended) has been decided, and could change college sports forever. O’Bannon v. NCAA is a landmark case in sports and intellectual property. Edward O’Bannon was a college basketball player at UCLA who argued that the NCAA should pay him for using his image in video games and on TV. Mr. O’Bannon and 20 former football and basketball players went to court for an injunction against the NCAA rule that prevented players from collecting money for their likeness. The plaintiffs argued that players should get a share of the Collegiate Licensing Company (CLC) and TV broadcast revenues.
The plaintiffs needed to show U.S. District Judge Claudia Wilken (Northern District of California) that the NCAA violates anti-trust law, and a market is being harmed. Further, they needed to prove there was a contract or conspiracy to fix prices, the agreement unreasonably restrained trade under a rule of reason analysis, and the restraint affected interstate commerce.
Plaintiffs argued that the college education market & group licensing market were being harmed by the NCAA rules. They further argued that; the rules limit competition for collegiate athletes, athletes need to pay more money for school, the rules facilitate an early exit for some athletes, there is a limited consumer choice due to the limited number and quality of licensed products, and the rule spurs inefficient substitution of funds; such as excessive expenses on recruiting, salaries of coaches, and expensive facilities. It was noted that some NCAA coaches make over $ 1.5 million dollars per year.
The NCAA, in response, argued that; college athletes operate under the title of amateurs, there would be a competitive imbalance among schools, there would be damage to integration of athletics and academics, and it will have a participation impact. To the NCAA’s dismay, the ruling was a significant blow, and dismissed almost all of their defenses.
The judge made a few important rulings, which will have a major impact on college sports going forward. In an earlier ruling on a specific issue, Judge Wilken rejected O’Bannon’s argument that live TV broadcast of games and commercials are speech. Plaintiffs were trying to argue that every time a player gives a pre-game, post-game, in game, or other interview, it was protected speech, which they should be compensated for. This was rejected.
Judge Wilken’s injunction has two components: (1) NCAA couldn’t cap the amount of scholarship below the actual cost of attendance, and (2) the NCAA can’t ban schools from creating a trust fund to pay players equal shares for their use of their likeness. The judge created a number, (a minimum) $5,000 dollars per season of eligibility, for the trust fund. The schools are not allowed to collude on the price they set, thus creating competition. This would go into effect for the freshman class of 2016, if it were not overruled in the appeal.
This is an interesting ruling. During my sports law symposium tour this past year, this topic came up a lot. I came to the conclusion that a trust fund would be the best way to compensate athletes. I do not think it would be fair for athletes to be paid in college and receive compensation while attending school. However, a trust fund they could touch after school would be a fair way to compensate athletes, and could be used for medical expenses and bills accrued during college. Most schools (that can afford it) will provide more than $5,000 dollars per athlete. My biggest issue with paying players is that when a regular student graduates from college, they come out with over $100,000 in debt (or more). A student athlete on scholarship can graduate with $0 in debt (or a few thousand at most). I sympathize with athletes when it comes to the toll playing a sport has on one’s body (as a college boxer, I still feel some of the injuries I sustained while representing my school).
This decision is favorable for athletes who play in revenue-generating sports (football and basketball). I am unsure how it will affect non-rev sports, such as wrestling, volleyball, intramural, and others. Penn State football revenue pays for every sports program except basketball. If the revenue is reduced, will other sports suffer or not be allowed to run at all? This decision will change the landscape and rules of college sports forever (if it is not overturned). The fact that there will never be an NCAA football or basketball game ever again saddens me. NCAA schools will have to adjust, as will the fans. This case comes right after an announcement by the NCAA allowing the power 5 conferences more autonomy. The shift is in the student-athlete’s favor. There are several more lawsuits against the NCAA, and this ruling is just one of many to come.
Some suggested reading
- http://www.cbssports.com/collegefootball/writer/jon-solomon/24582226/ed-obannon-vs-ncaa-a-cheat-sheet-for-college-sports-on-trial – for context about the trial
- http://www.usatoday.com/story/sports/college/2014/08/08/ed-obannon-antitrust-lawsuit-vs-ncaa/13801277/ – for the decision
- http://www.cbssports.com/collegefootball/writer/jon-solomon/24654805/qa-what-the-obannon-ruling-means-for-the-ncaa-schools-and-athletes – for some quick facts