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Understanding the NCAA Lawsuits and the Recent O’Bannon Court Ruling

Aug
13
2014
By
Category: BCS, College Sports Business, FBS, FCS, Featured News, NCAA News

When U.S. District Judge Claudia Wilken ruled against the NCAA last week in the ongoing O’Bannon case, it was inevitable that the NCAA would plan it’s appeal.

That ruling was to ensure that the NCAA could no long bar athletes from earning money from the use of their names and images in video games and broadcasts.

For NCAA President, Mark Emmert, that need for an appeal is directed primarily at the notion that the NCAA is violating antitrust laws and less about the name and image likeness use in video games. If any notion of antitrust law violations within the ruling were not overturned, it could open the floodgates for system changes within collegiate sports that could go far beyond athletes getting a simple stipend.

There are (2) major lawsuits that are directed towards the NCAA, while some others have growing support or will likely be merged with other existing suits.

The first is the O’Bannon v. NCAA suit:

“O’Bannon v. NCAA is an antitrust class action lawsuit filed against the National Collegiate Athletic Association (NCAA). The lawsuit, which former UCLA basketball player Ed O’Bannon filed on behalf of the NCAA’s Division I football and men’s basketball players, challenges the organization’s use of the images of its former student athletes for commercial purposes. The suit argues that upon graduation, a former student athlete should become entitled to financial compensation for NCAA’s commercial uses of his or her image. The NCAA maintains that paying its athletes would be a violation of its concept of amateurism in sports. At stake are “billions of dollars in television revenues and licensing fees.”

Points to remember for the O’Bannon ruling are:
* This ruling removes  restrictions on the money college athletes can receive for use of their names, images and likenesses as they violated antitrust law.
* The NCAA can cap payments to football and men’s basketball players as long as that cap isn’t less than $5,000 a year for every year they compete.
* The NCAA cannot stop schools from putting that money into a trust fund, to be held until an athlete’s eligibility ends, or he graduates, whichever happens first.
* The NCAA cannot prohibit schools from paying the full cost of attendance as a scholarship.
* There are no limits on aid to athletes.
* The ruling will not affect any recruit enrolled in college before July 1, 2016, and the NCAA can continue to enforce its other rules.

 

The second lawsuit is Martin Jenkins & others v. the NCAA, ACC, Big Ten, Big XII, Pac-12, SEC:

The Jenkins suit claims that the NCAA and (specifically the ACC, Big Ten, Big XII, Pac-12, SEC) it’s conferences unlawfully restrain trade in the market for Division I football players, Division I men’s basketball players and Division I women’s basketball players. This suit is more aimed at creating a free market system. It also wants an injunction that prevents the NCAA conferences from maintaining its financial-aid limits for the difference between scholarships awarded and the cost of attendance. The cost-of-attendance gap for a full scholarship Football Bowl Subdivision player ranged from $1,000 to $6,904 a year, according to a 2012 study. This lawsuit again focuses on the NCAA being in violation of antitrust laws.

 

On August 12, yet another suit was filed. This one in Minnesota as lawyers claim that the NCAA is again in violation of antitrust laws as college football is a full-time job, while athletic scholarships and other grants do not cover the full cost of attending school.

There will likely be other similar suits filed in the coming months. At that point it would seem that all of these lawsuits could be eventually rolled together into a much larger class-action suit. I don’t think we’ll find any odds on the sites like William Hill, but it seems likely that will more and more lawsuits entering the mix, that they will all benefit from a single ruling if for anything, the reduced costs.

 

 

 

 

 

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  • David Stroud

    I do think the power 5 conferences might have to rethink what they are doing. They could lose more money if they insists on having schools to join them that do not fit geography, lack of fans showing up, and athletes getting failing grades. They may have to add schools to be more fan travel friendly. Plus the anti-trust lawsuits that lawmakers will pull on them as well. We may see 5 conferences with 24 teams in a pod of 4 6 teams in a group. West virginia moves to another conference, and states who do not have a school in the power 5 conference will get in. Big 12 could add 6 west side school like Air Force, UTEP/UTSA, Colorado State, Wyoming, Montana, BYU. Northern, North Dakota State, South Dakota State and Northern illinois joins Iowa State, Kansas and K-State. East could be Tulane/La. Tech/La.-Monroe/La.-Lafayette, Houston, Memphis, Arkansas State/Central Arkansas (could play at War Memorial stadium for big games), Western Kentucky and Southern Miss. This is only an example what could happen if they rethink on how to actually pay players and all that. People are already being priced out going to a live games, and they are now being priced out of basic cable to even watch football games. In less than a year, our cable bill went from under $130 a month to close to $200 a month. Plus, we get forced to have the SEC network when we say we do not want it, and heard that we will get the Longhorn Network on top of that. Grrrrrr!!!!!!!!

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