In a decision that could radically reshape the world of college sports, a federal judge ruled Friday that decades-old NCAA rules barring payments to college athletes violate antitrust laws.
In a 99-page decisionJudge Claudia Wilken of the United States District Court in Oakland, California, delivered a resounding rebuke to the NCAA Foundation, issuing an injunction against current rules that prohibit athletes from making money from the use of their name and likeness in video games and television shows.
The decision in the so-called O’Bannon case would allow universities to offer football players in the top 10 conferences and all Division I men’s basketball players trust funds that could be tapped after obtaining their diploma, giving players a chance to share in the billions of dollars. in television revenue they help generate for their colleges and the NCAA
The ruling, which would take effect in 2016, does not require players to be paid. But it could allow universities to engage in bidding wars for top athletes, although the NCAA would likely try to prevent that by capping payments, which Judge Wilken found acceptable.
But she said she expected universities to pick up the extra costs.
“High coaching salaries and rapidly increasing expenses on training facilities at many schools suggest that these schools would, in fact, be able to afford to offer their student-athletes a limited share of licensing revenue generated by their use of the Student Training System. athletes’ own names, images and likenesses,” Judge Wilken wrote.
Her decision allows universities to provide trust funds to athletesas well as annual payments that reflect the full cost of school attendance.
Student-athlete advocates said it was a major victory.
“The decision goes behind the curtain of amateurism and says there is nothing,” said William Isaacson, the plaintiffs’ attorney. “This is a remarkable step forward for decency for college athletes.”
The O’Bannon case is the most important of several recent challenges to the NCAA’s principles of amateurism.
Just the day before, The NCAA voted to grant its five most prestigious conferences a significant degree of autonomy on the definition of benefits granted to athletes. As a result of this vote, by next season, the 65 universities participating in these conferences, which include virtually all of the most successful football and men’s basketball teams, will likely offer their athletes earn a few thousand dollars more than current purses.
A unionization drive among Northwestern football players has also gained ground. And a lawsuit that essentially demands that college athletes be paid market rates was filed by Jeffrey Kessler, a prominent antitrust attorney. But many viewed the O’Bannon affair as perhaps the greatest threat to the NCAA.
Ed O’Bannon, a former UCLA basketball star, filed a lawsuit in 2009. after seeing himself in a video game years after graduating. He wondered why others were making money from him.
“The main thing is that you control your image,” Mr. O’Bannon, 41, said in an interview Friday evening. “It means everything because that’s what it’s about. I’m really happy that players can control their image, because in any other area of life it’s possible. I never understood why the student-athlete couldn’t do it, and now he can.
Amid a wave of lawsuits, the NCAA ended its partnership with EA Sports last year, effectively ending popular college football and basketball video games.
Donald Remy, the NCAA’s chief legal officer, issued a statement saying he disagreed with the decision. The NCAA is expected to appeal the decision.
“We note that the court’s decision sets limits on compensation, but we are reviewing the decision in its entirety and will provide further comment at a later date,” Rémy said. “The NCAA is committed to fully supporting student-athletes. »
The NCAA has long maintained that its amateur rules, while potentially market-restrictive, were vital to its business model.
At the three-week trial in Oakland federal court in June, a parade of NCAA officials, including the association’s president, Mark Emmert; Big Ten Commissioner Jim Delany; and Stanford athletic director Bernard Muir echoed those arguments.
One after another, they argued that athletic departments and non-revenue-producing sports, like swimming and volleyball, would be hurt if football and basketball players were paid.
In his testimony, Dr. Emmert called college sports “the social glue that holds a campus together” and said universities should not pay student-athletes. “Converting college sports to professional sports would be like converting them to minor league sports,” Dr. Emmert said.
Judge Wilken rejected these arguments. The NCAA “provides no credible evidence that demand for NCAA products would decrease if student-athletes were allowed, under certain circumstances, to receive a limited share of revenue generated from the use of their own names, images and likenesses ” she wrote.
During the trial, O’Bannon’s lawyers presented a series of internal communications to the NCAA headquarters in Indianapolis that highlighted turmoil over the future of college sports.
In a memo to Dr. Emmert, senior assistant Wallace Renfro described the growing public perception that unpaid athletes were running a multibillion dollar industry as the “great hypocrisy of college athletics.”
“It’s a huge day, and it’s a huge loss for the NCAA because they’ve relied on amateurism for so long,” said Michael Carrier, a law professor at Rutgers who specializes in antitrust law. . “This opens the door to future challenges for all NCAA policies.”
The amounts of the trust funds would be left to the discretion of the institutions, at least initially. College athletes certainly won’t be receiving million-dollar salaries anytime soon. The injunction allows the NCAA to cap payments, but if it did so, the minimum payment would be $5,000 per year per football and basketball player.
If that were the cap, Division I college basketball and Football Bowl Subdivision athletes could collectively earn about $300 million over a four-year period, Mr. Isaacson said.
There have also been two congressional hearings this year on the status of student-athletes. Last month, Dr. Emmert testified before largely skeptical members of the Senate Commerce Committee.
Judge Wilken suggested other bodies may need to weigh in on the state of college sports. “Such reforms and solutions could be undertaken by the NCAA, its member schools and conferences, or Congress,” she wrote.
