• September 23, 2014

Breaking Down the Ruling: 3 Experts' Views

The Chronicle asked three legal experts to read the 99-page ruling handed down by a federal judge on Friday in the Ed O’Bannon case. The ruling, by Judge Claudia Wilken of the U.S. District Court in Oakland, Calif., would give big-time NCAA football and basketball players the chance to profit from the use of their names, images, and likenesses. If the decision stands on appeal, it would upend the association’s amateurism model.

The experts—Gabe Feldman, an associate law professor at Tulane University and director of its sports law program; Matthew Mitten, a law professor at Marquette University and director of its Sports Law Institute; and Gary R. Roberts, an emeritus dean of the law school at Indiana University’s Indianapolis campus—highlighted sections that they believe have significance in the case.

Breaking With Precedent

Gabe Feldman writes: Although courts and commentators have recognized that much has changed in college sports since—and in part because of—the 1984 Board of Regents case [NCAA v. Board of Regents of the University of Oklahoma (468 U.S. 85)], federal courts have consistently relied on that Supreme Court precedent to give great deference to NCAA restrictions on student-athletes designed to protect and promote amateurism.

 
 

From the Ruling

Although the NCAA has cited the Supreme Court’s decision in Board of Regents as support for its amateurism justification, its reliance on the case remains unavailing. As explained in previous orders, Board of Regents addressed limits on television broadcasting, not payments to student-athletes, and “does not stand for the sweeping proposition that student-athletes must be barred, both during their college years and forever thereafter, from receiving any monetary compensation for the commercial use of their names, images, and likenesses.” Oct. 25, 2013 Order at 15. The Supreme Court’s suggestion in Board of Regents that, in order to preserve the quality of the NCAA’s product, student-athletes “must not be paid,” 468 U.S. at 102, was not based on any factual findings in the trial record and did not serve to resolve any disputed issues of law. In fact, the statement ran counter to the assertions of the NCAA’s own counsel in the case, who stated during oral argument that the NCAA was not relying on amateurism as a procompetitive justification and “might be able to get more viewers and so on if it had semi-professional clubs rather than amateur clubs.” Oral Arg. Tr. at 25, Board of Regents, 468 U.S. 85. He further argued, “When the NCAA says, we are running programs of amateur football, it is probably reducing its net profits.” Id. (emphasis added); see also id. (“The NCAA might be able to increase its intake if it abolished or reduced the academic standards that its players must meet.”). Plaintiffs have also presented ample evidence here to show that the college sports industry has changed substantially in the thirty years since Board of Regents was decided. See generally Banks v. NCAA, 977 F.2d 1081, 1099 (7th Cir. 1992) (Flaum, J., concurring in part and dissenting in part) (“The NCAA continues to purvey, even in this case, an outmoded image of intercollegiate sports that no longer jibes with reality. The times have changed.”). Accordingly, the Supreme Court’s incidental phrase in Board of Regents does not establish that the NCAA’s current restraints on compensation are procompetitive and without less restrictive alternatives.

Although some courts have narrowed the class of student-athlete restrictions that implicate amateurism, the Seventh Circuit was clear in the 2012 Agnew [Joseph Agnew, et al., v. National Collegiate Athletic Association] case that the NCAA is entitled to deference with respect to restraints on student-athletes that promote the "revered tradition of amateurism in college sports."

Despite the explosion of college sports over the past 30 years, most courts to address the issue have continued to rely on Board of Regents to adopt a similarly deferential approach.

Judge Wilken’s decision departed from the majority of case law by both questioning the basic concept of NCAA amateurism and concluding that the longstanding deference to amateurism requirements announced in Board of Regents was inappropriate, even in cases directly involving compensation to student-athletes.

Limited Restrictions

Matthew Mitten writes: On balance, this is a pretty thoughtful opinion by the judge. She clearly recognizes the conflicting aspects of college sports and is quite careful to issue a fairly narrow opinion addressing this specific restraint, while providing some pretty telling clues as to how she is likely to resolve the other NCAA antitrust cases before her.

 

From the Ruling

Consistent with the less restrictive alternatives found, the Court will enjoin the NCAA from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names,images, and likenesses in addition to a full grant-in-aid. The injunction will not preclude the NCAA from implementing rules capping the amount of compensation that may be paid to student-athletes while they are enrolled in school; however, the NCAA will not be permitted to set this cap below the cost of attendance, as the term is defined in its current bylaws.

She enjoins the NCAA from enforcing its rule because it's the product of an anticompetitive agreement among NCAA schools and there's a less-restrictive means of achieving its legitimate procompetitive objectives. She says it will be up to individual schools to decide whether to share licensing revenues with football and basketball players, but doesn't require them to do so.

She prohibits the NCAA from sanctioning schools that offer a share of licensing revenues to their athletes and declaring athletes ineligible if they receive them.

One thing that stood out to me was the judge recognizing that a restriction on "large payments" while players are in school may be necessary to prevent a reduction in the popularity of big-time football and basketball and the educational aspect of college sports.

She rules that limiting the value of the stipend they can receive while in school to the full cost of education and the amount they can receive thereafter (i.e., at least $5,000 for each year academically eligible) is a reasonable restriction consistent with antitrust law.

Curious Logic

Gary Roberts writes: This decision was very well-written, and Judge Wilken was very skillful in making her case. But there is a lot of illogic in trying to understand the antitrust violation she found in relation to the remedy she has crafted.

She did not find a violation with respect to the NCAA’s not allowing players or former players to sell their name-and-image rights, which was what this case was about. She found a violation in the capping of player compensation, which goes to the heart of what the NCAA system of amateurism is all about.

 

From the Ruling

Plaintiffs have shown an injury to competition only in the college education market or the market for recruits’ athletic services and licensing rights.

And the remedy does not logically follow from what she found to be a violation. She crafted a trust-fund remedy based on finding a violation that was not what these plaintiffs were complaining about.

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