Judge rules against NCAA, says some players can get share of licensing revenue
08/08/2014 5:37 PM
08/08/2014 8:57 PM
A federal judge ruled for student-athletes and against the NCAA on Friday, opening the door for some college players to share in licensing revenue after their careers are over.
The ruling by U.S. District judge Claudia Wilken in the Ed O’Bannon lawsuit allows for trust funds to be established for major college football and men’s basketball players, who can cash in, after their eligibility expires, on a portion of the proceeds generated by the use of their images and likenesses.
“This is a major step toward decency for college athletics,” said Bill Isaacson, of the New York law firm Boles, Schiller & Flexner, the co-lead counsel for the O’Bannon plaintiffs.
“The judge’s decision strikes down the NCAA rules restricting their compensation and permits reasonable but significant sharing with athletes … from the billions in revenues that schools earn from the football and basketball players.”
And the reshaping of the college sports landscape continues, at least when it comes to providing benefits to athletes.
Only a day earlier, the NCAA voted to give power conferences more governing freedom, which translates into the ability for schools in the Big 12, Southeastern, Big Ten, Pac-12 and Atlantic Coast conferences to spend the money they make from television contracts as they see fit and without input from smaller-budget schools.
Student-athletes from the power five conferences are expected to see their scholarships increased to include their full cost of attendance and medical coverage beyond their college years.
And there remain several other lawsuits against the NCAA that seek wealth-sharing with athletes in some form. The most notable may be the “Kessler case,” in which current players are seeking an injunction to eliminate the NCAA ban against paying players beyond their scholarships. Kessler argues athletes presumably would receive offers well beyond the value of tuition, room, board and books if not restricted by NCAA rules.
The Wilken decision is a step in that direction.
O’Bannon is a former UCLA basketball player who filed a lawsuit against the NCAA five years ago after he saw his image used in video game.
He was joined in the suit by several former players who claimed that football and men’s basketball players should be entitled to compensation for the commercial use of their likenesses and images.
Wilken agreed, ruling the NCAA violates antitrust law by restraining schools’ ability to compensate football and men’s basketball players by sharing licensing revenue.
In a 99-page ruling, Wilken issued an injunction that will prevent the NCAA “from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images and likenesses in addition to a full grant-in-aid.”
The NCAA may still cap athletes’ compensation while they are enrolled in school but not below $5,000 for every year athletes remain academically eligible.
“The conference and its members are going to carefully evaluate how to comply with the judge’s ruling in a way that goes forward with the collegiate amateur model,” said Kevin Sweeney, an attorney for the Polsinelli law firm who serves as outside counsel to the Big 12. “This doesn’t, in our view, throw out the collegiate amateur model.”
Rutgers law professor Michael Carrier, a specialist in antitrust and intellectual property law, told the Associated Press that the outcome may be not scary because the money may not be huge and will be paid only after a player’s career is over.
“My sense is something like making these (name, image, likeness) payments after graduate are not really big game-changers,” Carrier said. “They’re just giving the plaintiffs a little piece of the money many people would view as entitled to. I don’t think it will put college athletics out of existence.”
The NCAA, in a statement from chief legal officer Donald Remy, disagreed with the court’s ruling.
“We note that the Court’s decision sets limits on that compensation but are reviewing the full decision and will provide further comment later,” Remy said. “As evidenced by yesterday’s Board of Directors action, the NCAA is committed to fully supporting student-athletes.”
The NCAA argued in the O’Bannon case that allowing athletes to cash in on their likenesses would move away from the amateur concept and disrupt competitive balances in college sports.
Some former players have already cashed in on their likenesses. On the first day of the O’Bannon trial in June, the NCAA settled a case with the plaintiffs on video game likenesses for $20 million. This came after Electronic Arts and Collegiate Licensing Co., settled with plaintiffs for $40 million.
But how will college sports look in world where current athletes can cash in on their image and likenesses?
Could Andrew Wiggins, who arrived at Kansas last year as one of the most hyped newcomers, have been allowed to hold autograph sessions during the season? Or could he receive revenue from his jersey sold in the school’s bookstore?
That will be possible beginning in 2016, and at least one poll believes it should happen. The Reason-Rupe poll interviewed 1,003 Americans in March and found that 64 percent said a player should be allowed to receive some of the money from the sale of his likeness or jersey.