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While some people have declared the National Collegiate Athletic Association (“NCAA”) system of governing student-athletes corrupt and in dire need of reform, the chances real change would in the NCAA has seemed . . . unlikely. The rule is simple: student athletes cannot receive any compensation for their performances on the field. The NCAA’s standard line has been that what athletes get is a free education. However, a recent ruling by a Northern California district judge may have created the first crack in the NCAA’s dam–which currently holds back a flood of money that could flow to current and former student athletes.
When a college athlete agrees to attends a university to play sports, they sign a waiver forever forfeiting the right to be compensated for any image they develop in association with the university. After the athlete graduates, the rights to the image pass to the university and to NCAA. Universities sell merchandise and tickets using player names, numbers, and likenesses, producing an estimated $4.6 billion in revenue in 2012. The NCAA also profits from the athlete’s image, selling licenses to use them in television broadcasts and video games. The NCAA receives an estimated $2 billion each year for television rights alone. No players are ever compensated for the use of their collegiate image.
Several former players got fed up with this system and sued the NCAA. Led by former UCLA star basketball player Ed O’Bannon, a dozen former NCAA athletes have banded together to pursue a class action antitrust claim against the NCAA and other companies who have used the players’ images. The players scored an early victory this past January when U.S. District Judge Claudia Wilken dismissed a motion by the NCAA to bar the players from forming a class action claim. The players received more good news on June 20, when Judge Wilken ruled that current student athletes could be added to the lawsuit, giving the players two weeks to amend their complaint by adding additional names to the class.
This ruling was interesting for two reasons. First, it suggested that Judge Wilken was going to rule in favor of the players and certify them as a class. This would allow the plaintiffs to join any former athlete whose image has been used in game footage or video games since graduating. Second, it opened the door for current NCAA college athletes to join the suit. If current players join, it could refocus and broaden the media attention the lawsuit has already garnered, and raise the profile of the issue in the public awareness. Ultimately, this case has a long road to travel before any sort of decision on the merits could be made. But if a court does eventually find the NCAA is violating antitrust laws, both the NCAA and universities would see enormous changes to their revenue streams, sure to change forever the landscape of college athletics.
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