NCAA and Legal Issues and Amateur Sports and College Sports and Law and Sports Business

Judge: NCAA must face trial on ex-player licensing revenue

February 21, 2014

The National Collegiate Athletic Association must go to trial over claims by football and basketball players who are seeking a share of $800 million a year in licensing fees for televised games, a judge said.

The case is part of a movement by current and former college athletes to secure compensation, and greater medical benefits, control over their images and labor protections in a system that considers them amateurs. The athletes aren’t paid despite generating sponsorship, ticket and merchandise revenue in addition to that from TV contracts.

U.S. District Judge Claudia Wilken in Oakland, Calif., said a trial will be needed in June after lawyers on each side failed at a hearing yesterday to persuade her to rule in its favor without one.

Lawyers for the Indianapolis-based NCAA, the governing body for major college sports, argued that games are public events that aren’t commercial in nature and therefore fall within free-speech protections under the U.S. Constitution’s First Amendment.

“I don’t really buy the commercial speech argument,” Wilken said yesterday. She said she will issue a written order soon on the lawyers’ requests for a judgment without trial.

Glenn Pomerantz, an NCAA attorney, said whoever controls the stadium and sells the tickets has the right to sell broadcast licensing rights. Players don’t have any rights over the use of their names and likenesses in live broadcasts because the games are events of public interest protected by the First Amendment, he said.

“That’s where your parade of horribles goes wrong,” Wilken said. She said universities, which give broadcasters permission to film games, can say to athletes “you have to give us permission to use your name and image on TV and we will pay you after you graduate, we will put it in a trust.”

“There is a right of publicity,” the judge said.

“It’s trumped by the First Amendment,” Pomerantz said.

“Not always,” Wilken said.

Student athletes are “human billboards” for corporate logos, and commercialization “infects live game broadcasts at every level,” the former players said in court filings.

Former University of California-Los Angeles basketball forward Ed O’Bannon and former Arizona State University quarterback Sam Keller are among the plaintiffs in the 2009 lawsuit alleging the NCAA violates antitrust and publicity- rights laws by preventing students from being compensated for the use of their images.

While the claims have mostly survived the NCAA’s attempts to have them dismissed, the judge has limited the plaintiffs’ ability to seek damages for thousands of current and former athletes.

Wilken ruled in November that the athletes could sue as a group for the right to negotiate licensing deals, while barring them from banding together to seek revenue from broadcasts they appear in. Each athlete’s potential damages would vary according to how often they appeared in game footage, making a blanket revenue deal inappropriate, she said.

Michael Hausfeld, a lawyer for the athletes, said there’s “no distinction between college athletes and professional players” regarding licensing rights for live sporting events.

“They are both athletes,” he said, and use of professional athletes names and images are a part of the broadcast licenses.

Wilken said she can’t block entities that already have licenses with the NCAA from using players’ names and images.

“No, but you can enjoin them from forcing the licensees” not to negotiate with the players in the future for use of their names, Hausfeld said.

Hausfeld said in a Feb. 13 court filing that he will go to trial to seek damages for individual former players. A trial on the antitrust claims is scheduled for June 9.

Wilken rejected NCAA arguments that its practices are pro-competitive. The association had argued that its policies help level the playing field for schools to attract athletes because schools that don’t have the funds to offer students a cut of profits from using their images would be at a competitive disadvantage to larger schools.

“Many people might agree that those might be good things to have,” yet they aren’t an adequate defense, the judge said.

Group lawsuits are less expensive for plaintiffs than filing multiple lawsuits and provide leverage for settlement talks.

Donald Remy, chief legal officer of the the NCAA, said the athletes’ claims aren’t supported by the facts or the law.

“We believe strongly in the merits of our case and will continue to defend the interests of the hundreds of thousands of student-athletes not recognized by the plaintiffs,” he said in an emailed statement. “For them and for all student-athletes, the current model of college sports provides opportunities for success during college and beyond.”

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