O’Bannon ruling deals crushing end to amateurism in NCAA athletics
The outcome in Ed O’Bannon v. NCAA long seemed a foregone conclusion, especially to those of us who covered the trial. So perhaps that’s why the initial reaction Friday to Judge Claudia Wilken’s landmark decision in the case seemed to miss the point.
Let the record show the NCAA did not gain a partial victory or suffer a modest defeat Friday just because she didn’t declare all college athletes are now free agents who can negotiate million dollar contracts. On the contrary, Wilken delivered a decisive and crushing end to the era of amateurism in college athletics and in doing so, opened the door for even more drastic attacks on the organization going forward.
In her 99-page opinion, Wilken decreed that the NCAA’s longstanding ban on compensating athletes for use of their name, image and likeness violates antitrust law. That alone was a victory for the plaintiffs, five years in the making. But more than that, Wilken repeatedly and unambiguously struck down virtually every argument the NCAA made in court in defense of the traditional collegiate model.
The NCAA argued that preservation of amateurism is essential to its core identity, as evidenced by its century-plus commitment to the concept. Wilken wrote: "… the NCAA has revised its rules governing student-athlete compensation numerous times over the years, sometimes in significant and contradictory ways. Rather than evincing the association’s adherence to a set of core principles, this history documents how malleable the NCAA’s definition of amateurism has been since its founding."
The NCAA argued that compensating athletes would negatively impact competitive balance in college athletics. Wilken wrote: "… the NCAA has not presented sufficient evidence to show that its restrictions on student-athlete compensation actually have any effect on competitive balance, let alone produce an optimal level of competitive balance."
The NCAA argued that paying players would adversely affect the integration of academics and athletics on campuses. Wilken wrote: "Student-athletes would receive many of the same educational benefits … regardless of whether or not the NCAA permitted them to receive compensation for the use of their names, images, and likenesses."
And the NCAA argued that restricting compensation increases output of its product and if lifted, schools might bolt Division I. Wilken was particularly incredulous about this one. "There is no evidence to suggest that any schools joined Division I originally because of its amateurism rules. While there may be tangible differences between Division I schools and other schools that participate in intercollegiate sports, these differences are financial, not philosophical. For this reason, the NCAA’s assertion that schools would leave FBS and Division I for financial reasons if the challenged restraints were removed is not credible."
Some other NCAA arguments Wilken did not find credible: That fans will stop watching college sports if the players are compensated, because an expert it hired to conduct a survey said so; that there’s no such thing as name, image and likeness rights in a television broadcast, because a former TV exec said so; and that there’s no market for video-game licenses for athletes because, you know, EA Sports stopped making the game. "Although the NCAA recently declined to renew its license with EA, it has not presented any evidence suggesting that it will never enter into such an agreement again in the future. None of its current bylaws preclude it from entering into such an agreement."
Wilken sided with the NCAA on just one major issue. She empathized with the organization’s mission to prevent commercial exploitation of athletes and thus denied an attempt to allow product endorsements. Pretty much everything else the plaintiffs asked for, though, they got.
The only reason anyone could call this a partial victory for the NCAA is if their expectations were unrealistic to begin with.
Wilken was never going to drop a nuclear bomb that completely professionalized college athletes, because that was never the scope of the case. The plaintiffs had focused specifically on athletes’ rights to a share of licensing revenue derived from their appearances in television broadcast and video games.
To that end, Wilken said yes, absolutely they’re entitled to a cut, and per her order, beginning July 1, 2016, schools will be free to entice recruits either by allocating group licensing revenue for athletes who are still in school or by placing those funds in a trust for use after a player’s eligibility expires. There’s one significant caveat, though: the NCAA can still cap those amounts, though not less than full cost of attendance at a university if the athlete is enrolled or not less than $5,000 per year if the money goes into trust.
Those caps are the sole silver linings for the NCAA. And in fact, if Wilken’s ruling stands as the lone business change going forward (provided it’s not overturned on appeal), then most major athletic departments would barely feel the brunt. It’s basically a tax. Most SEC teams spend more per year on their defensive coordinator.
But don’t kid yourself. Friday’s ruling only opened the door for years and years of more lawsuits and perhaps even Congressional rulings. Wilken’s strong words in deflating the amateurism model will become the template for thirsty lawyers smelling further NCAA blood – like Jeffrey Kessler, the prominent labor lawyer who filed a claim last March against the NCAA and the Power 5 conferences seeking to lift college athlete compensation restriction entirely.
No one can possibly predict where this will all wind up. All we know is that on August 8, 2014, a federal judge in California sized up the testimony of NCAA President Mark Emmert, Big Ten commissioner Jim Delany and other prominent administrators called to defend college sports’ amateurism model and said — I’m not buying it.
"This is a game-changer for college athletes, both current and former," said the man who led the crusade, O’Bannon in a statement late Friday. And he’s right. Whether she’d said $5,000 or $50,000, the minute Wilken agreed with the plaintiffs that the NCAA’s amateurism rules are illegal, she changed college sports forever. Barring an improbably successful appeal, major college sports will turn down a different road in 2016. Where they end up is anyone’s guess.