The National Collegiate Athletics Association (NCAA) has long ruled that student-athletes may not receive compensation for the use of their names, images, or likeness. At the same time, the organization and member schools brought in millions of dollars from jersey sales and other licenses. A U.S. District Court Judge ruled today that the NCAA violated antitrust laws with its actions and must now pay student-athletes.
The court’s decision was first reported on by CBS Sports who dug through the 99-page opinion from U.S. District Judge Claudia Wilken of the Northern District of California. The judge put a permanent injunction that will prevent 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.”
Wilken: NCAA’s current rules show “the NCAA does not consistently adhere to a single definition of amateurism.” http://t.co/nCAf9V6jN7
— Jon Solomon (@JonSolomonCBS) August 9, 2014
Wilken’s ruling does allow the NCAA to put in place a cap that FBS football and Division I men’s basketball players can receive while they are in school, but the cap must not fall below the athlete’s cost of attending school. Additionally, the judge ruled that NCAA member schools and conferences will be allowed to setup a trust for athletes that will become payable when they leave school, or their eligibility expires. The trust amount must be at least $5,000 per person for each year of eligibility, and the same amount must be offered to all athletes in the same class and on the same team. While student-athletes must be compensated for the use of the name, likeness, or image, they will not be allowed to receive money for endorsements. “Allowing student-athletes to endorse commercial products would undermine the efforts of both the NCAA and its member schools to protect against the ‘commercial exploitation’ of student-athletes,” Judge Wilkens’ wrote in response to the request by the plaintiffs.
The NCAA lost O’Bannon, but Judge Wilken gave it a sliver of hope. http://t.co/1MwwwqUYY6
— Andy Staples (@Andy_Staples) August 9, 2014
The lawsuit was originally brought by former UCLA basketball player Ed O’Bannon in 2009. He filed an antitrust lawsuit against the NCAA, Electronic Arts and Collegiate Licensing Company (CLC). Electronic Arts stopped producing college basketball video games after NCAA Basketball 10 was released in 2009 and put its college football video game on indefinite hold after NCAA Football 2014 last year after a settlement. The publisher and paid out $40 million to players whose likenesses were used in video games.
“I’m never at a loss of words, but I just can’t explain it to you,” said Sonny Vaccaro who led the anti-trust lawsuit. “It’s like that impossible dream thing. Don Quixote finally got it. (Wilken) took out the word amateurism for the NCAA. To me, the ones who are going to benefit are the ones who don’t even know we won today, the kids of the future. I feel very good about that.”
NCAA Chief Legal Officer Donald Remy had the expected opposite response, according to USA Today.
“We disagree with the Court’s decision that NCAA rules violate antitrust laws,” Remy said in a statement. “We note that the Court’s decision sets limits on compensation, but are reviewing the full decision and will provide further comment later. As evidenced by yesterday’s Board of Directors action, the NCAA is committed to fully supporting student-athletes.”
Kevin Sweeney, legal counsel for the Big 12 Conference, added: “We will have to carefully evaluate this to figure out how we comply with this ruling, “We will move forward with promoting the collegiate amateur model. … (Wilken) doesn’t throw out the collegiate amateur model.”
— SB Nation (@SBNation) August 8, 2014
How this ruling will play out with how student-athletes will get paid for which use names, images, and likenesses is unknown. The NCAA has already pledged to appeal so this lawsuit may eventually find itself in front of the Supreme Court. Additionally, there are more lawsuits asking for players to be paid behind this one.
The landscape of college athletic was forever changed with this ruling, however, and shows that the old model of the uncompensated (except for scholarship) student-athlete doesn’t work in the modern era. Exactly what it morphs into will play out over the next decade or more.
[Image via EA Sports NCAA Football 14]