Ruling in NCAA Case May Bring Some Players Closer to Share of Profits

November 11, 2013

In a case that could fundamentally shake the economic model of college athletics, a federal judge on Friday agreed to partially certify a lawsuit challenging restrictions on how student athletes may be compensated in exchange for playing sports.

The ruling by U.S. District Judge Claudia Wilken allows a group of about 20 current and former college players to press ahead with a class action against NCAA rules that prevent athletes from sharing in licensing deals or television revenue. Current guidelines classify players as amateurs, prohibiting them from earning compensation beyond the value of their athletic scholarships.

However, the ruling also came with one major caveat: While Judge Wilken cleared a pathway for players to share in future revenues, she rejected a separate bid that would have allowed them to collect damages for the past use of their images and likenesses both on television and in video games. Had that effort succeeded, the NCAA’s legal tab could have run into the billions.

The split decision left both sides claiming victory.

“We have long maintained that the plaintiffs in this matter are wrong on the facts and wrong on the law,” wrote the NCAA’s chief legal officer, Donald Remy, in a statement. “This ruling is one step closer to validating that position.”

In a competing statement, attorneys for the plaintiffs wrote, “While we are disappointed that the court did not permit the athletes to seek past damages as a group, we are nevertheless hopeful that the court’s decision will cause the NCAA to reconsider its business practices … The court’s ruling is a giant leap in the effort to end these unfair practices.”

Wilken’s ruling comes a little more than a month after the video game maker EA Sports and Collegiate Licensing Company agreed to a $40 million settlement with players in the NCAA suit, including former UCLA basketball star Ed O’Bannon.

In 2009, O’Bannon became the lead plaintiff in the NCAA case after learning on a visit to a friend’s house that his likeness had been licensed to EA for a video game. As he told FRONTLINE in the below scene from the 2011 film Money & March Madness“[The NCAA] didn’t ask me for my image. They didn’t ask me, you know, for my left hand, for my sweet jump shot … Selfishly speaking, I want the way the NCAA does business, I want that to change.”

The extent to which the NCAA will change will now depend on what a jury decides at a trial scheduled for next June, if not sooner. As Michael McMann, a sports law expert at the University of New Hampshire, explained in Sports Illustrated, Friday’s ruling makes the chances of a settlement far more likely:

Both sides now have a better understanding of the potential value of the litigation to college athletes and its potential cost to the NCAA and its members. The case is not as valuable as O’Bannon had sought, especially for former student-athletes, but the prospect of college athletes being compensated in the future would still constitute a hefty new cost for colleges.

Sources close to the litigation insist the two sides have not engaged in settlement talks and are essentially in a cold war. The absence of talks to date is not surprising. Until tonight, neither side could reasonably predict the economics of the case. Neither knew if the number of plaintiffs was a handful or tens of thousands and neither knew which claims a class could bring against the NCAA. They now have more information and can better forecast whether the case carries the risk of tens of millions, hundreds of millions or even billions of dollars.


blog comments powered by Disqus
Support Provided By