Interview Michael McCann
A professor of law and director of the Sports Law Institute at Vermont Law School, McCann is also a legal analyst for Sports Illustrated. This is the edited transcript of an interview conducted on Jan. 29, 2011.
In terms of sports law, could you describe the case involving Ed O'Bannon?
Ed O'Bannon, a retired college basketball player who also played for a short while in the NBA, has come to the conclusion that he should be compensated for the NCAA's use of his image, likeness and other characteristics when the NCAA licenses his image to private companies, including those who broadcast games, those who repackage games in terms of classis sports, also video game companies.
His argument is that, why is it that I'm not being compensated for the use of my likeness? After all, we normally are compensated through our right of publicity, that we have certain proprietary interests in our identity, our voice, our gestures, our name, many characteristics.
He also argues that not only is there an issue with his proprietary interest being taken, but there is an antitrust argument as well. And the antitrust argument is that if players could negotiate their own contracts, retired players, in terms of licensing, there would be a more competitive market. Right now, the NCAA licenses the images of ex-players, and as a result, there's only one supplier of those images, the NCAA. O'Bannon argues there would be a more competitive market, which is something that antitrust law values, if he and other players could do their own deals.
How significant is this case?
It's a very significant case, particularly because it's past the motion-to-dismiss stage. A motion to dismiss is an argument by the defendant that, even if all of the facts are true, there's no viable legal claim. Well, the NCAA lost the motion to dismiss, and it's now going to trial. Normally, cases against the NCAA have not succeeded, either because of motions to dismiss or because they're settled. O'Bannon, though, seems to signal that he isn't going to settle, that he's actually going to go forward with this case, and he's going to try to win it.
And if he wins it, it would mean that retired players, including those who have been retired for a while, should be compensated for their use and image and likeness that the NCAA contracted away.
Well, you said something called the "right of publicity." What is that?
The right of publicity is that we have certain proprietary interests in our identity, that if somebody is going to try to make money off our image, our likeness, our name, that we should be compensated for that. Now, there are exceptions to that. There's a newsworthiness exception, for instance. If we're in the public news because of something we did or because we happen to be there, we're not going to be compensated. There's also an exception for parody. In other words, if we went on a television show and somebody parodied our appearance, we wouldn't be compensated for that.
But if somebody is just trying to make money off our image or likeness, we have a legal right, under state laws, to be compensated for that.
Let me put it a different way. O'Bannon, all the college athletes today, student-athletes, they all sign this form, right? And it's our understanding that this form has a clause in it that says you're signing away all your rights, basically, to the NCAA and to the school that you went to. So what's this litigation all about?
O'Bannon would argue that the Student-Athlete Statement, which, as you noted, Lowell, is required of students to sign if they want to play college sports -- students who may be 17 or 18 years old know that if they don't sign that statement, they will not be able to play sports. And if they can't play sports, they may not get their scholarship. And if they don't get their scholarship, they may not be able to afford school. So O'Bannon is saying, well, that's not really much of a choice, is it, because you're required to sign this form.
Not only does it seem as if we don't have a choice, but the form itself shouldn't have the meaning that the NCAA seems to perceive. The form means that players give up their proprietary interest while they're in college, so the NCAA can use their likeness and image while they're in college to promote the NCAA and to promote the colleges that the players are associated with.
O'Bannon is saying, even if that's OK, which he doesn't seem to concede, but even if that's OK, it shouldn't continue after I've left school, because the NCAA, as it's argued, is concerned about the exploitation of student-athletes; that if they were to be able to do their own deals while in college, there would be charlatans who exploit players and the like. But O'Bannon is saying: "I'm 39 years old. Why is it that I need to be protected by the NCAA nearly 20 years after I played college basketball? I should have a right to get paid. That form shouldn't take the effect that the NCAA seems to interpret."
And the NCAA requires that you not have a knowledgeable person, let's say an agent or even an attorney, look at this document for you, interpret it for you?
Yeah, the NCAA frowns upon, and to some extent, prevents, student-athletes from having a lawyer enter the room and review the document. Now, the thinking there is that it would be a litigious experience if a lawyer were reviewing a form, that it would complicate the playing of college sports if lawyers were involved. Also [there's] the concern that lawyers are really acting as agents if they're giving advice to a student-athlete; that their interests wouldn't necessarily be aligned with those of the student-athlete. There has been other litigation concerning that.
There was a baseball player [for Oklahoma State] named Andy Oliver who, about a year and a half ago, sued the NCAA. He got in trouble because an agent had given him advice after he was drafted. There was ultimately a settlement in that case, but he won the first round in terms of the litigation. So I suspect the NCAA may move away from the requirement that you can't have outside counsel providing advice while you're contemplating this form. But I think the NCAA will argue that we don't want college sports to be litigious; we want to ensure that it's ultimately about amateurism, not about lawyers entering the story. But I'm not sure that's the most persuasive argument around.
They're requiring you to sign this thing, which signs away your rights, basically, by their interpretation, in perpetuity, for the rest of your life.
And it would seem that somebody should be there to provide advice, particularly if you have a 17-year-old -- 17-year-olds do not reach the age of majority. Do they really know what they're doing? And I also think the issue of choice matters here. How much choice does a student-athlete have if he or she knows that if he or she does not sign that form, they can't play; they can't get a scholarship; they may have to leave school? It doesn't really sound like much of an option. It almost sounds as if you have to sign the form.
Now, you don't have to sign it. You can do something else with your life. But these are persons who have worked so hard to get to the point where they can play college sports and receive an athletic scholarship for that that you would hope that they wouldn't be pressed with the decision to walk away.
The phrase "contract of adhesion" has been used. What does that mean?
It can mean a variety of things, depending upon the circumstance. But generally speaking, a contract of adhesion refers to a contract where the party signing it did not know what he or she was getting into, and also was put in a position to sign a form in which they were not able to find out what they were getting into. So in this case, a contract-of-adhesion argument would be, when a student-athlete signs the form, he or she has no idea what they're doing, in essence, signing away rights of publicity.
Those are legal phrases where there should be some kind of explanation as to what that means, as opposed to quickly signing a form and giving up all of these rights that could be very valuable down the line. I don't think that a 17-year-old probably knows what a right of publicity is, or the significance of waiving it away in perpetuity, or the significance of being in one's 40s or 50s and knowing that his or her image is being used in a way that isn't being compensated. …
And the NCAA is basically saying, if you want to come play sports at one of our schools, you want your scholarship, especially, it's our way or the highway.
That's right, Lowell. Essentially, it's our way. You abide by the rules of the NCAA. Their argument is that they're preventing exploitation by ensuring that commercial entities don't approach them while they're playing college sports.
That's their defense?
That is their defense, that it's promoting education. Also, if we're going to take the argument of the NCAA, they will say, "Well, what are we going to do, start paying athletes, and then have some persons on campus making a lot of money and others who aren't all that important to sports making nothing?"
In addition, there's a concern about Title IX, which is a federal law that commands gender equity. If male basketball players and football players are getting paid, but no one else is getting paid, there's a suggestion that it wouldn't work with Title IX, or female athletes will have to start getting paid. And then at that point, college athletics will say, "Well, how can we afford college sports anymore?" Is that an argument that's very compelling? It depends on who you ask.
So the NCAA, they say, does not license student-athlete likeness for any commercial purpose, and therefore does not generate revenue through this type of activity.
In terms of video games, the NCAA may argue that they're not actually licensing away the player's identity; that they're simply not protesting use of a player's hometown, weight, age, height, race that some video games seem to be using. The video games don't use the player's name, but everything else about the player seems to be pretty clear. Now, the NCAA hasn't licensed that away, and the NCAA will say that the right of publicity remains with the athlete, at least certainly after the player has left college.
Editors' Note: EA Sports generally changes the name of a player's hometown or state for their video games. Most other characteristics of the virtual player such as height, weight, handedness, jersey number, and hairstyle remain similar to the actual player.
But the video game also allows you to put the player's name in.
And then an announcer will say your name. An announcer that's been pre-programmed in the video game will say the player's name. It's skirting around a rule. And I think if you're a former player or a current player thinking, well, clearly that's me in the video game. Who else would it be from my hometown who is my height, who is my weight, who has my physical characteristics? Now, they don't put the image [face] of the player, but everything else seems to be that player.
And also, what's the coincidence that all of the rosters, more or less, would match up with the players in the game in terms of all of their physical characteristics but for their face and their name? Doesn't seem like a coincidence.
And the NCAA says they don't prevent former student-athletes from profiting off their likeness. They can go sell autographs or videos, or video of them shooting baskets, after they leave.
Sure. The difficulty, though, with that argument, is that if you're Ed O'Bannon, you're thinking, how is it that I have any value if the NCAA is licensing away my image and likeness and me in terms of what I did while I was in college to ESPN Classics [sic] and other entertainment companies, that I am not going to practically be able to do this? I can't go license my own image to ESPN. ... O'Bannon would argue that the NCAA shouldn't be able to license his image at all unless he's being compensated, because it makes it practically impossible for O'Bannon to be able to work out a deal with ESPN if the NCAA is also giving away his image.
And so players are not paid, right? They get scholarships. And in addition, the NCAA has the exclusive right to sell their image, if you will, without their name on it.
And -- yes. And beyond it, they can sell their jersey with their name on it.
And they can sell the video of the game as much as they want.
As much as they want.
And the players don't get any residuals.
The players do not get any residuals.
And there are other defendants in this case. EA Sports, because they do video [games]... But what's CLC [Collegiate Licensing Company]?
CLC is the entity that the NCAA uses to do its commercial licensing. It's a standalone entity that licenses deals with ESPN Classics, with video game companies, merchants, licenses apparel companies and the like. And CLC essentially is an arm of the NCAA that executes the contracts and tries to maximize revenue for the NCAA.
Editors' Note: CLC is a subsidiary of a company called IMG. It serves the NCAA and its members in licensing and marketing matters, but it is a separate entity from the NCAA.
... And EA Sports, the video company, they obviously lost a ruling in this case related to their attempt to say this was all covered by the First Amendment, because they're not really using the name; they're just creatively making games. Now they've appealed that ruling, and out of the woodwork comes almost every major media company in the United States on their side. Is this case of that import?
It is, because certainly the question now is, well, what does newsworthiness mean? If the use of the player's identity is for newsworthiness purposes, then at that point the player doesn't need to be compensated. And I think there's a concern among some that if a video game use of a player needs to be compensated, then what else ... in terms of student activities, or rather, athletes' activities, would need to be compensated? Because if a video game company has to ... pay a former student-athlete to use his image, then would a magazine have to do the same? Would a television company have to do the same? It really depends on what newsworthiness means.
Well, clearly, the difference would be, I would think, that you use a clip of someone, for instance, in a news story because you're telling a story about this person, it's in the public arena, but you're not charging people, necessarily, every time they use it. ... And isn't that the difference?
That is a distinction. But you are paying for the channel. You are paying for the magazine at one point. If you're going online, you're not paying per se, but you're looking at an image that has ads near it. So I think it's a fair distinction, but I think other companies are worried that, if Electronic Arts has to compensate, then how far will that interpretation extend?
So this is turning into sort of a mega-battle, this case.
It is. It is. And I think what threatens the NCAA here is that the parties involved have the resources to wage a real war; that you have top lawyers in this case that will fight, from ... everything we can tell, to the end in order to see the NCAA lose. And if the NCAA loses, or if Electronic Arts loses, if all these companies lose, it will dramatically reshape the way certainly former college athletes are compensated, which today is nothing, and potentially current student-athletes as well.
You mean this would be sort of a chink in the armor that's protected the unique kind of student-athlete that the NCAA has been handling over all these years.
Well, I think it could be more than a chink in the armor. I think it could be a reimagination of what the student-athlete is in terms of the ... commercialization of the student-athlete as one where at least some of the benefits of the commercialization go to the student-athlete rather than to the school and to the NCAA and to the relevant conferences.
That, of course, would affect the amount of revenue that colleges have to spend on sports, because if players are being paid, either through a fund or through some other device, then other sports may not be as economically viable, and we could see some of those sports programs cut, some of the teams that don't generate revenue, in fact are net losers in terms of revenue, [and] would likely, or at least potentially, be victims should current student-athletes or retired athletes be paid.
The argument has been made to us that the people who are really threatened by this are the coaches and the athletic directors, because their salaries are basically based on the fact that the student-athletes produce all this revenue but don't get paid. So they can benefit as a result.
Yeah, if you figure ... each student value has a value of the tuition, room and board, incidental expenses, whatever is the net value of that scholarship, that's what each student-athlete is being paid. Presumably, that aggregate number is lower than what it would be if student-athletes could be compensated in addition to that, for instance, if they could get some kind of salary or compensation for getting the school on national television, or getting the school in video games or the like.
Or there's some trust fund [that] would be set up --
Or some trust fund would be set up to compensate, sure. And if that's the case, then the remaining economic value would be lower, meaning coaches, athletic directors, other administrators would likely be paid less. So one argument is to say that the student-athletes are subsidizing the high salaries of coaches, which, as we know, are getting very high. And I think there's a sense that, why are they being paid millions of dollars a year when the student-athlete is on the cover of the team brochure?
Is there any other system, business arrangement that you know of, that's similar to the NCAA and its relationship to the people who actually do the work?
No. No. I'm unaware of any system where the labor is unable to be compensated in any way, by rule, and the management is able to benefit by that, at least indirectly in terms of what economic value is not going to the player, could then be paid to the management, the coaches, the athletic directors and the like.
Now, we see some parallels, I suspect. Maybe in minor league sports, where minor league players are not paid very much, and presumably they could be paid more if there weren't rules preventing how much they can be paid. Minor league basketball players, the D-League [NBA Development League], salaries cap out at, from what I understand, $24,000 a season. Well, that's pretty low. Perhaps if there was a market where there was no cap on how much they're paid, they would get paid more. But they're getting paid.
And that's in stark contrast to student-athletes, who are not getting paid, though I think the NCAA could argue that, for a lot of the student-athletes, even if they're not being paid, they're still getting a good deal. They're getting room and board; they're getting tuition -- and we know how expensive tuition is these days with colleges; [and] that on their own, many of these athletes would not be very marketable.
But they have to work 40 or 50 hours a [week] at this non-job, and if they displease the coach or get injured, they've only got a one-year contract, right?
Technically right. Usually, schools, if a player gets injured, will move the athlete off an athletic scholarship and onto another type of scholarship so the student isn't kicked out. But yeah, what you said is correct. They do go on, in that respect, one-year contracts. And you could certainly argue that, at the very least, guarantee the athletic scholarship for four years.
And going to whether this is a good deal, if it's such a good deal, why are graduation rates so low at so many of these colleges for student-athletes? What are they really doing there? Are they getting an education? You know, the value of the education is only true if, in fact, they're being educated. And if they are devoting too much time to sports, because of the pressures of being a college athlete, one would imagine that the value of the education isn't very high.
Now, you can say, well, some of these players wouldn't be able to go to elite universities but for the fact that they're really good at sports. That's true. And if they graduate, they'll have a degree from an elite university, and that has market value. But it may not be as high as it's being characterized, because if they're getting a college degree without a rigorous academic education, then how prepared are they for the real world? How prepared are they for graduate school or law school and the like if they don't make it in sports? …
There's no other similar business relationship that you can think of [that is similar to this]?
Not in the sense that they're not paid, right? There are mentoring programs, in terms of being an apprentice electrician. There are certain devices used to keep salaries of certain workers down under the idea that they're getting something in return. They're getting the experience; they're getting the mentoring. Minor league athletes are getting development, and that's in part explaining why their salaries are so low. But no, there is no entity that I know of where somebody is not paid anything after expending a good deal of labor on behalf of an entity, in this case being the school and also being the NCAA.
So if O'Bannon wins, that is, let's say goes to trial and wins, that will have an immediate impact on former players. Will it also change the current situation?
I think it would change the current situation in the sense that current players would know that when they graduate, or when they leave school, there would be some type of compensation should their image and likeness be licensed away after they graduate. So there could be some light at the end of the tunnel in terms of making money playing college sports. It would be delayed.
And we would also have to see what kind of arrangement was put in place. If a fund is put in place -- and I think that's the most likely outcome -- the fund would be distributed by some type of board. The board would have to figure out how much players should get compensated. And those would be challenging issues. Should players get paid the same after they retire or after they leave school? Should it just be, because you happen to be on an ESPN Classic broadcast, you should get paid a certain amount, or is it that if you're Ed O'Bannon, and you're a star, and you have this iconic image after winning a national title, you should get paid more? Those are going to be hard questions for whatever board administrates [sic] a trust, should one emerge.
The NCAA, at least in public statements, has said there is the amateur athlete, but intercollegiate sports has never been a nonprofit business. There's always been money involved, and commercialism, right?
Sure. I think the NCAA would say that there's nothing inherently wrong with having a commercialization of sports in the sense that we're selling tickets to games so that fans can come and watch. They're going to say, if we didn't do that, then we wouldn't have college sports, that it would be economically not viable to have the kind of sports that we have.
Now, it's possible we could have a reimagined world of college sports where nothing is licensed, where no images are used, where we don't see them on TV. I don't think many fans would like that, and I think there's a sense that, from the fans' perspective, that we want to preserve what's going on in terms of having March Madness, in terms of being able to watch so many games on cable television or satellite television. And ... I think the NCAA knows that in that respect, it has an advantage, because many people would be worried about a radically different system of college sports, where it was smaller, where there was no commercialization. I think it would be a sports world that wouldn't be on TV and that fans wouldn't enjoy as much.
So their advantage is that they have a vast fan base which is going to support them, because they want to keep watching games.
Sure. And I think that helps to explain why government regulation of the NCAA has been relatively light. The NCAA gets favorable tax treatment because of its status as an institute that promotes higher education, and that there are calls in every Congress saying, "We should repeal that," or "We should revisit it." They never go anywhere. You don't see members of Congress clamoring to change the NCAA, to change college sports. I think there's a sense that if they were to do so, a lot of fans would be upset or concerned about the potential implications of that, in terms of their sports viewing and their sports fandom.
How do they promote higher education?
Well, the student-athlete is getting an education. There are rules that the student-athlete has to maintain a certain GPA, that they have to have certain academic thresholds to get into school, and that they have to spend so many hours per week [with academics], that there's a supposed cap on the number of hours that they can play sports. I don't know how that number is configured, given the amount of time they spend playing games, traveling, working out, team meetings and the like, practicing. But there is a sense that this is ultimately about a rich curricular experience for the student-athlete, who gets to be an athlete but also gets to be a student. And the NCAA views itself as protecting the student-athlete in this process.
There was a study done by some lawyers who concluded that, given that they spend 40 to 50 hours working, they're workers under the law. Aren't they?
They're workers in the sense that they are working. But they're not employees. And how they're classified has an impact on whether or not ... they're entitled to any kind of compensation. At this point, in part because of the form that they sign when they become a student-athlete, they give up certain rights that would otherwise benefit them in a case about unjust enrichment, for instance, which Ed O'Bannon has also argued, that the services of players are unjustly enriching the NCAA and colleges and conferences.
Now, [Sonny Vaccaro] describes himself as an unpaid consultant. ... How important is he in this process, in this litigation, in what's going on?
I think Sonny Vaccaro is extremely important. I think he's been a trailblazer for promoting the interests of student-athletes and retired student-athletes, seeing that they're compensated in ways that he thinks are commensurate with the amount of labor that they put in, the amount of attention that they generate for schools, the amount of value that they provide to universities and the NCAA. He has, of course, a rich background in terms of college sports, and in professional sports. He's seen it all, I think it's pretty safe to say.
And I think he believes in his heart that ... this is absolutely the right outcome, that at the very least ... former college athletes should be compensated. And I think he would argue -- I can't speak for him -- that current ones should be compensated, too.
He would say that it's all about the players. They're the ones who have created all this wealth for all these different people, but then they're cut out of the take in the end.
Other than getting the free tuition, room and board, etc. I mean, they are getting something. But I think Sonny Vaccaro would argue, like you said, well, that ... it doesn't equate to what they're putting into the ... system; that they get much less than what they deserve, if it were a free market. But we know it's not a free market.
Some people have said he's got to have an angle; Sonny's always got an angle.
I don't think he does. Not in this -- maybe at one point in life he had an angle to argue these issues. But I think at this point, he's at the point where he is pursuing something that he genuinely believes is right. And you can argue whether he's right or wrong, but I think he believes in his heart that what he's doing is right. I don't think he's getting any money from this. He's an unpaid consultant. He's doing this because he thinks it's the right move.
Is he doing it because, as someone said to us, he's responsible for commercializing not just college sports, not just high school sports, but getting down to junior high school, by marketing, basically, shoes?
Yeah. Well, he clearly has played a major role in the last 30 years of sports, particularly in the respect that you just noted, Lowell, the commercialization of sports. And I think he's seen, from the inside, who is producing the actual value in this equation. Is it the player or is it the coach or the university or the school? And I think in his view, it's to say, well, "I've seen it all, and I brought value to this equation. I was able to commercialize sports in a way that has greatly benefited colleges and universities. But the labor in that equation has not benefited to the extent that they should have," I think is what he would argue.
And these people are basically employees, in your view.
I don't know if I would say they're employees. I think there's a difference between being an employee where your entire focus is on the job, and being a student-athlete, where at least part of your focus is on academic enrichment; where, at least it should, for many athletes, I think, ... to learn history, to learn science and the like. But I think there's a good argument to be had that there should be some kind of compensation for the employee-like services that you're providing.
But for the many thousands of student-athletes who benefit from March Madness, for instance, because it produces a lot of money for [the NCAA's] Division II or Division III championships, and for their schools to have these programs, the other side of the coin is that the people who are really producing that money, they're not being compensated, not even being thanked for doing it.
Yeah. But I mean, the players who make the money, because there's a very small group of players who bring in that revenue, right?
Sure. I think you could say that the superstar player generates a disproportionate share of the fan's interest of the commercialization of sports. When O.J. Mayo plays one year [of basketball] at the University of Southern California, and he's put on the cover of the brochure, and he's highlighted, he clearly is generating revenue for the University of Southern California. This is somebody who is attracting renewed interest in a program that had not attracted a lot of interest in years prior.
I don't know if the 11th and 12th persons on the bench are generating that same value. They're clearly not. You know, the random offensive linemen on a top college football team, whom we don't know the name of, how much value is that player contributing? Well, in the sense that he's playing on a team that's doing really well, he's contributing value. But independently, how much value is he contributing? I think that's a harder call. And I think that's what is going to make compensating athletes a difficult challenge, certainly not an impossible challenge, but it's figuring out who gets what ... If it were a professional league, then we would know what they get, because there's a market for services.
But this is the only country that I know of that has sports teams associated with universities and institutions of higher learning in a billion-dollar industry, and is tied that way. I mean, this is a pretty unusual situation, isn't it?
It is, and in other countries, for instance in Europe, we don't see the same college sports system. We see a professionalization of youth sports. We see if you're a 13- or 14-year-old star basketball player, you don't have to wait until you're 19 years old and one year removed from high school to play in the NBA. You can sell your services as a teenager and make money at that point, or you can join some other kind of pro league in another part of the world.
Only in the United States do we have this very extensive and popular system of college sports that has had the effect of reducing the compensation and, in some cases, eliminating compensation for those who are playing the sports. When you couple that with age restrictions in order to enter the NFL and the NBA -- and, of course, in college sports, at least 90 percent of the revenue is generated by football and men's basketball -- then you could see a real injustice.
You have players who can't turn pro because of an age restriction. Then they have to go to college, if you will, to play maybe for a school that they have no interest [in] being a student at. Where do they go? Well, they can go to Europe if they're a basketball player, perhaps, but not many have done so. They're in a difficult situation. I think the ones who are generating so much of the wealth, the star players, are the ones who are so clearly disadvantaged by this system.
So it's an antitrust case.
It is an antitrust case, because the current system is set up in a way that boycotts players who would otherwise be commercially viable from being able to use their services. And that, arguably, makes the market less competitive.
Now, the question is, who gets sued there? Do you sue the professional sports leagues and the players' associations that have created barriers to entry? Well, that's been done in the past. The difficulty is that courts say, if the owners and the players get together and negotiate a rule, it's largely immune from federal antitrust law. And of course, you could say, well, that doesn't seem fair, because the players' association is looking out for current players. Why should they create a barrier that prevents prospective players from entering the league, because if they could enter, they're going to take jobs away from the 12th guy on the bench. That doesn't seem like a fair system. But that's how federal labor and antitrust laws are set up. Current employees can negotiate on behalf of prospective employees. It may seem fair in some context, but I think in professional sports it really isn't.
What is the NCAA's position? How does it defend itself in this litigation?
They will also argue, I suspect, that even if that argument doesn't work, that under what's known as rule of reason and analysis in a federal antitrust case, that, while there may be anti-competitive aspects of the arrangement that the NCAA has with the Student-Athlete Statement and the like, that on balance it's actually pro-competitive because it's created an efficient market for the NCAA to be able to enter into deals with vendors and entertainers that otherwise wouldn't exist, including classic sports, including video games, including licensing in apparel companies; that if the NCAA couldn't license away Ed O'Bannon's image, then Ed O'Bannon's image wouldn't be licensed away, because it would be too difficult for O'Bannon and other players to group together; that there's an efficiency to the NCAA being able to do so that makes the market actually better off. That's the NCAA's likely argument.
By the way, antitrust: What is that?
Antitrust is an area of law that's designed to promote competition in the marketplace; that there are certain activities by businesses, either on their own or in connection with other businesses, that are anti-competitive. For instance, when companies get together and decide to keep prices at a certain level, price fixing, that's a violation of federal antitrust law. Or, for instance, where they get together and decide that they're only going to share the marketplace in certain areas but have exclusive rights in other areas, that's a violation of federal antitrust law. So antitrust law is about promoting competition in the marketplace.
So how is that relevant to student-athletes?
Well, it's certainly relevant to student-athletes when they're retired, when they leave school. In that sense, at that point, they are no longer under the guise of being a student-athlete, that they could be able to license their own image and likeness without one entity doing so, in this case the NCAA. And the specific relevance here is to say, well, if O'Bannon and other players could do their own contracts, licensing their own video game or their own jersey sales or their own posters and the like, that would be a more competitive marketplace than to only have the NCAA do so, because at this point, the NCAA is the only entity that sets the price in a way that maybe hurts consumers. Maybe the market would be more competitive. Maybe there would be more video games featuring former college athletes if the NCAA didn't license away -- or, the NCAA would say that they're not licensing away their names, they're just not doing anything there, because they're going to say, well, their names aren't used in the video games. It's only their hometown, weight, height, race, other characteristics. ...
And the video game will accept putting their name in there, and the announcer will --
Yeah, you can type in the name.
And the announcer will say their name.
Kind of a fig leaf.
To say the least. Yeah.
No, no. This is charting waters that haven't been explored before. We haven't seen a player be able to get to this point where there's a real threat to the NCAA, that it's going to have to pay a lot of money -- and not only a lot of money. Under federal antitrust law, damages are tripled, so whatever is the amount that's decided, it will be multiplied by three. So this could be a very significant loss to the NCAA in terms of monetary value, where lots of former college players will have to be compensated if O'Bannon wins the case. And I think the NCAA's going to say, well, how are we going to be able to afford this without doing certain things like cutting sports programs or doing other pursuits that will be unfavorable with fans?
So they're going to plead poverty.
They will. They will say: "Fine, you want us to pay former players, OK. But now we're not going to be able to have a wrestling team or a track and field team," or reeling off 10 other sports. They'll be gone. "We'll also have to have a smaller sports program, because we're not going to be able to afford it," or they're going to say, "We won't be able to do any licensing if we're going to have to give up the money to the former players."
I don't think that argument is going to necessarily be persuasive. I think there could be a system where former players are compensated some amount of money, in an agreed-upon way that the NCAA agrees with, that the business that entered into the contract agrees with, and that the player agrees with, perhaps overseen by a trust that has representatives from all of those groups.
Is it possible that this suit, if it's successful, would then lead to players being actually compensated?
And current players.
Well, ... the thrust of the O'Bannon part of the claim is former players. Now, if [Arizona State and University of Nebraska quarterback] Sam Keller, who is bringing the case against Electronic Arts, [thinks] that he should be paid, and other players who are in these games should be paid, ... at the very least, in terms of video games, current players would be compensated for their likeness and everything but their name and face being used in the games. So in that respect, they wouldn't be compensated. But neither of those claims actually would compel the NCAA or individual colleges or conferences to pay athletes.
So this is maybe a first step to changing the system, but not the final step.
I think that's right. I think we could see other lawsuits follow these, provided they're successful. If they're unsuccessful, then I think we'll probably see some time before we see lawsuits of this sort re-enter the ... field. I think it's more likely at that point that the NCAA would maybe agree to some reforms in terms of compensation of former players, but they wouldn't do so by compulsion of a court.
So here's Auburn's starting quarterback in 2011. No name.
No name, but his number is there, and his height is there, and his handedness, his hometown, his year in school; his position is there, as you noted, the starting quarterback. This looks a lot like a player who actually exists in real life. And this is why I think the Sam Keller lawsuit has some weight, because --
That's the other lawsuit.
That's the other lawsuit. Who are we fooling as to who this is? Everyone knows who this is. Everyone who's involved with college sports knows who this is. ... Not providing the name is a veneer to the person's actual identity. And I think a court will be very skeptical as to this arrangement, simply not giving the name, giving everything else about a person ... So the player's name, his year, his handedness, his jersey number, his position, his home state, they all match up with one person, a person who I think most people know who it is when they're playing the game. To argue that this person is someone who isn't a real person I think isn't an argument that would have a lot of weight.
Well, they don't put the name in, and they may change one of the things, I think in this case the state the person came from, the state of origin, not the team. Is that sufficient legally to protect them?
I suspect not. I suspect if a typical fan or a typical video game user knows who this person is, then changing the hometown or changing, in some cases, the home state, and not giving the person's name, and obscuring the face in a way that it's not identifiable to one person, I still think most people playing the game know who that is. And if that's the case, then using these devices to change a few things here and there wouldn't hold water. ...
The NCAA has been described to us as being a cartel.
Well, it's described as a cartel in the sense that the colleges and universities that are otherwise competitors in terms of winning games, in terms of attracting students, in terms of attracting alumni donations, decide to collude and create a system that ensures that college athletes are not paid any kind of salary, and that those athletes are generating revenue for those schools. So the cartel aspect is, you have competitors who are joining hands in a way that's anti-competitive. ...
So this could all lead to players eventually getting paid in some fashion.
It could. At the very least, former players being compensated through a trust that's set up to compensate them. And of course current players would know that they were getting something at the end of the tunnel. In addition, if video games that are using many, if not most, of the characteristics of a player, a current player, are now obligated to pay that current player, then players would be compensated through the video game publisher, in this case Electronic Arts. And it's very possible that down the line, subsequent lawsuits could attack the actual status of a current student-athlete and the NCAA's treatment of that student-athlete as not being compensated. ...