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High-stakes NCAA amateurism trial gets under way

June 9, 2014
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Former National Collegiate Athletic Association players seeking to share in $800 million in annual broadcast revenue are challenging their amateur status in a trial seen as potentially leading to teen athletes with agents, fewer teams and lawsuits by marching bands.

Ed O’Bannon, who was the Most Outstanding Player of the 1995 Final Four while playing basketball at the University of California at Los Angeles, took the stand in a trial that started Monday in Oakland, Calif.

The outcome will determine whether the Indianapolis-based NCAA has to negotiate with players seeking to be paid for appearing in televised games without forfeiting scholarships covering tuition and expenses.

O’Bannon said UCLA games he played in were televised locally, regionally and nationally, and playing basketball was his priority—not academics.

“There were classes that I wanted to take, but our practice schedule, our travel schedule, just wouldn’t allow it,” he testified.

The NCAA said Monday it settled a related lawsuit by players who sued over use of their likenesses and images in Electronic Arts Inc. video games. The $20 million accord resolves claims that depicting players in the products without permission or compensation violated their rights to control and license their identity. The NCAA also resolved a related lawsuit against EA, the organization said on its web site.

O’Bannon’s lawyers say they want to break up what they call a price-fixing conspiracy among the NCAA and member schools that reap the proceeds from televised college basketball and football games and cut athletes out of the profit. College athletics is as commercialized as professional sports, with billions of dollars going to the NCAA, universities, coaches and facilities—everywhere but into players’ pockets, they argue.

“Whereas the NCAA defends its policies in the name of amateurism and level playing fields, they actually are a device to divert money,” Michael Lehman, an attorney for the ex-athletes, said in a court filing, quoting former NCAA director Walter Byers. The NCAA’s approach to amateurism “is based on outdated romantic notions,” Lehman wrote.

O’Bannon is featured in DVDs about UCLA games and the 1995 basketball championships offered for sale by the NCAA, according to his complaint. He’s suing on behalf of a class of current and former players seeking to negotiate licensing deals for use of their images.

The NCAA claims O’Bannon’s lawsuit is baseless because its amateur model is legal and serves players and schools. It also benefits fans, who attract advertisers that pay big money to NCAA broadcasting partners and who have said in surveys that they oppose compensating athletes. Paying players would pit schools against each other to attract top talent, and cause some to stop fielding teams and fans to tune out in droves, the NCAA argues.

“It is known as the O’Bannon trial, but we could just as well call it the amateurism trial,” said Michael McCann, a University of New Hampshire law professor.

O’Bannon, 41, now sells cars in Las Vegas after playing two years with the National Basketball Association’s New Jersey Nets and also in Europe. He’s seeking a court order declaring that NCAA rules and practices violate federal antitrust laws because they block competition in the open market for schools to get the best athletes and among broadcasters for the right to use the players’ names and images. Under NCAA regulations, athletes can be stripped of their scholarships and barred from playing if they accept payment.

U.S. District Judge Claudia Wilken, a Stanford University graduate and former federal public defender nominated to the bench in 1993 by President Bill Clinton, will decide the case without a jury in a trial expected to last three weeks.

Her order could stop short of saying how the NCAA should remedy the situation, opening the door for player organizations such as the Former College Athletes Association to work with teams to bargain for group licenses, McCann said. Star players could hire agents depending on how Wilken crafts her order.

“My guess is that it would be a very small percent of athletes who would get their own deals,” he said.

The NCAA had $912 million in revenue last year, including $838 million from television, championships and marketing rights fees, according to its financial statement.

The trial comes at a time when the NCAA is facing attempts by current and former college athletes to secure compensation, better medical benefits, control over their images and labor protections.

“The plaintiffs’ lawyers are attempting to twist legitimate concerns about the current system—issues that the NCAA and its member institutions are actively addressing—into a rationale for turning student-athletes into employees,” NCAA legal director Donald Remy said in an email. “It is a short- sighted goal that would severely diminish academic and athletic opportunities for student-athletes—99 percent of whom will never turn pro.”

A National Labor Relations Board regional director in Chicago ruled in March that football players at Northwestern University in Evanston, Ill., were employees, making them eligible to unionize. Northwestern scholarship football players voted on whether to form a union. Those ballots have been sealed while the NLRB reviews the March decision.

That proceeding can’t be discussed at the O’Bannon trial because it isn’t relevant to the case, Wilken said.

The trial outcome will reverberate across the broadcasting industry, according to lawyers for companies including Turner Broadcasting System Inc. and CBS Corp., which signed a $10.8 billion contract with the NCAA in 2010 to present Division I men’s basketball championships through 2024.

If O’Bannnon wins, legal chaos would ensue, with halftime performers, marching band members, cheerleaders and even Little League players who appear at televised games running to court, the broadcasters said in a court filing.

“Any athlete of any age whose image appeared on television might claim a right to similar compensation and even assert analogous antitrust violations by the governing sporting authority,” they said.

The NCAA failed to convince Wilken that free-speech rights bar athletes from seeking TV licensing revenue on the grounds that the games are public events that aren’t commercial in nature.

That ruling in April followed several others that have benefited the plaintiffs.

“Her rulings have generally favored O’Bannon,” McCann said. “I think O’Bannon appears to have an advantage.”

McCann, who writes about sports and law for SI.com, said he expects an appeal to be filed by whoever loses.

Lawyers for the NCAA may call its president, Mark Emmert, Big Ten Commissioner Jim Delany and university athletic directors to testify that alumni donations will dwindle as fans walk away from college sports, according to court filings.

“Fans support Michigan because they love that young students coming out of high school arrive at Michigan, work hard, and are largely successful getting college degrees,” University of Michigan President Mary Sue Coleman said in a court filing. “Paying these students-athletes would change the students-athletes in the eyes of the fans and, in my experience, would negatively impact fan interest in Michigan sports.”

O’Bannon’s case, filed in 2009, was combined with a related case brought by former Arizona State University quarterback Sam Keller, who sued the NCAA and Electronic Arts Inc. on behalf of athletes whose likeness were used in video games without permission or compensation.

EA’s NCAA football games didn’t use the players’ names, though they depicted individual players by their height, weight and other identifying features. The company settled the lawsuit for $40 million and canceled the football video games.

Legal issues left Electronic Arts “in a difficult position, one that challenges our ability to deliver an authentic sports experience,” according to a statement in September by Cam Weber, the company’s general manager of American Football.

A separate jury trial is scheduled for March over athletes’ claims against the NCAA that they are owed damages because their privacy rights were violated by the use of their images in video games, broadcasts and other media.
 

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