Legal Issues and NCAA and Class Action and Lawsuits and College Sports and Intellectual property and Law and Sports Business

Lawsuit could bring NCAA financials to light

February 10, 2010

The NCAA on Monday lost its battle to dismiss a class-action lawsuit led by former UCLA basketball player Ed O’Bannon that could have far-reaching ramifications on the not-for-profit association’s business practices.

O’Bannon seeks to be compensated for the use of his name and likeness in NCAA officially licensed products.

Judge Claudia Wilken, presiding over a district court in San Francisco, denied the NCAA’s dismissal motion. That means the NCAA’s licensing contracts—which contain sensitive financial information—could become public as O'Bannon's legal team proceeds with the discovery process.
 
Sports business and legal experts think the case will be followed by members of Congress interested in the NCAA’s tax-exempt status. The NCAA’s licensed business has a value estimated by sports marketers at $4 billion.

The NCAA argued O’Bannon and other college athletes forfeited their commercial rights when they signed a form permitting the organization to use their images to promote NCAA activities.

“The court’s … rulings at this preliminary stage of the cases do not diminish the NCAA’s confidence that we will ultimately prevail on all of the claims,” said a statement from the NCAA.

Milt Thompson, an attorney and president of an Indianapolis-based sports marketing firm, said the NCAA may be facing an uphill battle.

“Clearly, the lower court thinks the NCAA has a case against it,” Thompson said. “It’s my view that if you’re exploiting someone’s image, and they’re not getting a royalty, that doesn’t seem right. I’m a firm believer that those that help generate revenue should share in that revenue.”

In July, O’Bannon filed an antitrust lawsuit against the NCAA, stating former college athletes should be compensated for the use of their images and likenesses in television ads, video games and on apparel.

O'Bannon, 37, who led UCLA to the 1995 NCAA national championship, was particularly annoyed by the use of his likeness in a video game licensed by the NCAA without his permission.

“They literally played me on a video game,” he told Yahoo Sports. “You could play the ’95 (UCLA) Bruins. It didn’t have my name, but it had my number, left-handed, it looked like me. It was everything but the name. My friend kind of looked at me and said, ‘You know what’s sad about this whole thing? You’re not getting paid for it.’ I was just like, ‘Wow, you’re right.’ It just kind of weighed on me.”

This isn't the first time that the NCAA has been sued by a former player. Sam Keller, 25, filed a lawsuit against the organization last year for using his likeness as quarterback for the University of Nebraska.

Former Rutgers University quarterback Ryan Hart, 25, is also suing EA Sports—which produces NCAA-licensed video games—for using his image.

Judge Wilken combined O’Bannon’s case with Keller’s. O’Bannon’s attorney, Jon King, said in an email that he expects various players from different eras to be added to the class-action suit within a month.

King said in an email that he will soon begin taking depositions and collecting evidence to uncover financial information the NCAA has sought for years to hide from the public and current and former NCAA athletes.
 
 

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