On August 8, 2014, one of the most important Sports Law cases was decided. The case, O'Bannon v. NCAA, was a class action lawsuit brought by current and former college athletes that sought to challenge the NCAA's rules prohibiting compensation for FBS football and Division 1 basketball players on antitrust grounds. Specifically, the athletes were challenging the rules that disallowed athletes from receiving a portion of the revenue the NCAA, and its institutions, receive for the use of the athletes' names, images and likenesses in video games, game broadcasts, and other forms of media. The athletes alleged that these rules violated the Sherman Antitrust Act.
Ultimately, the Court found in favor of the athletes, holding that "the challenged NCAA rules unreasonably restrain trade in the market for certain educational and athletic opportunities offered by NCAA Division I schools. The procompetitive justifications that the NCAA offers do not justify this restraint and could be achieved through less restrictive means." Based on its findings, the Court imposed an injunction to:
This case is notable for the implications it has on college sports in both the present and the future. Although the remedies were limited in scope, much of the decision reads of contempt for the NCAA's business practices under the guise of amateurism. This decision may not be the deathblow to the NCAA and/or its practices, but it certainly provides a step in the right direction for athletes to be compensated. Further, and perhaps more importantly, this decision provides the foundation for future legal challenges to the NCAA's practices. Currently, there are multiple challenges to the NCAA's business practices, and since the O'Bannon decision was filed, another class-action antitrust suit has been commenced against the NCAA.
Effects of the O'Bannon decision
Unfortunately, this ruling does little to put money in the players' pockets during college, when they need it. Athletes who have full scholarships can struggle financially during their time in college, as scholarships do not cover the full cost of attendance. Further, there is a public perception that all collegiate football and basketball players are scholarship athletes. This notion is simply untrue. Many athletes, even at the Division 1 level, do not have scholarships. For instance, per NCAA regulations, a FBS football team can have up to 85 players on full scholarship at any given time. However, prior to the college's first day of classes or the team's first game (whichever is sooner) a team's roster cannot exceed 105 players. This means that football teams are allowed to have 20 athletes, approximately one-fifth of the total roster, who are not on scholarship prior to their first game. These walk-on athletes must attend college on their own dollar, and many struggle financially to do so.
However, this decision is still a victory for players' rights. The NCAA has hidden behind its principles of amateurism and the "student-athlete" since its inception, and has vehemently refused (by both actions and omissions) measures that it believed would align it with professional sports leagues. Some of these measures include:
Although this decision did not provide remedies that impact athletes during their college careers, it effectively obliterated the NCAA's concept of amateurism. In discussing the inconsistencies of how the NCAA has defined amateurism throughout its history, Judge Wilken opined that "Rather than evincing the association's adherence to a set of core principles, this history documents how malleable the NCAA's definition of amateurism has been since its founding." The NCAA's convenient principle of amateurism is the foundation of many, if not all, of players' rights issues that should be addressed in further litigation. Most notably, amateurism is one of the NCAA's primary oppositions to the unionization of college athletes.
Importantly, the O'Bannon case has provided a roadmap for future lawsuits on how to challenge many of the NCAA's practices. The decision itself has provided a large amount of language for Courts to utilize in decisions for years to come. The NCAA is currently facing several similar class action cases. One of the current class action antitrust cases alleges that the NCAA has unlawfully capped player compensation to the value of the scholarship. This effectively seeks a free market for player compensation. This case is similar in theory to the O'Bannon case, and could benefit from utilizing the analysis of the O'Bannon decision, particularly Judge Wilken's discussion of amateurism. Certainly, at least some of Judge Wilken's analysis from the O'Bannon decision will be used to frame that case moving forward. Time will tell whether or not the case succeeds, but the O'Bannon decision has exposed a weakness in what has been the NCAA's strongest argument.
Changes through legislature?
In her conclusion to the O'Bannon decision, Judge Wilken opined "It is likely that the challenged restraints, as well as other perceived inequities in college athletics and higher education generally, could be better addressed as a policy matter by reforms other than those available as a remedy for the antitrust violation found here. Such reforms and remedies could be undertaken by the NCAA, its member schools and conferences, or Congress." This statement, while not a ringing endorsement of change through antitrust challenges, also highlights the ease (technically speaking) by which the NCAA's inequitable practices can be remedied, or solidified, through negotiation or petitioning Congress. As the NCAA has refused to budge thus far on these athletes' rights issues, the only remaining path (other than litigation) is by seeking Congressional action.
In light of the several cases the NCAA was facing recently, the NCAA spent $240,000 on lobbying in the last six months. Not only is this amount approximately $80,000 more than the NCAA spent all of last year on lobbying, it is also the most the organization has ever spent on lobbying. There are likely two reasons the NCAA is pursuing this lobbying campaign. Either the NCAA is attempting to solidify its practices with respect to athletes by seeking Congressional action, or their lobbying is a means of damage control.
Despite the NCAA's lobbying, college athletes' rights have become a topic of discussion in Congress. Recently, Congress formed a bipartisan caucus "to inform Congressional members about physical, academic and financial issues college athletes face so they're treated fairly." The Congressional Student-Athlete Protection Caucus, as it has been named, was designed to foster discussions that would "lead to greater accountability on the part of the NCAA" (Charles Dent [R-Penn]). Perhaps as Judge Wilken opined, Congressional action may obviate the need for further litigation to give athletes the rights they are entitled to.
Although the O'Bannon decision did not result in sweeping changes to NCAA practices, the ruling importantly exposed a weakness in the NCAA's arguments that future litigants may be able to utilize to their advantage. Certainly, the several ongoing actions against the NCAA will borrow some of the analysis from the O'Bannon decision. However, as Judge Wilken opined, Congressional action may obviate the need for further litigation. Hopefully, the Congressional Student-Athlete Protection Caucus yields legislation supporting college athletes' rights. Otherwise, the lawsuits will continue until these athletes get the rights they deserved.
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