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.

Will Wojcik

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4 Responses to Are the NCAA’s Days Numbered?

  1. Anonymous says:

    Don’t forget to add the $10.8 billion deal between the NCAA and CBS/Turner Sports for March Madness between the 2011 and 2024 seasons. For three weekends out of the year, that is a whole lot of money.

  2. Kate Haywood says:

    This is such a huge issue that I am glad is finally receiving some sort of positive attention from our nation’s court system. Clearly the NCAA is never going to reform itself to the students’ benefit, so it’s nice to see that students are coming forward to help not only themselves, but generations of students to come. While it is exciting that the students were certified as a class, you are also correct in that this case has a long way to go until we reach a decision on the merits. Luckily, with so much at stake, there are sure to be attorneys in it for the long haul, and I don’t see this issue going away regardless of the outcome of this particular suit. Great article!

  3. Thomas says:

    This is a really interesting piece. I think it directly adds to the already robust discussion surrounding the NCAA. Players are already finding loopholes to get money while playing (I.e. Manziel, through his company J2Man Enterprises, being allowed to keep the proceeds of a trademark suit brough against a t-shirt dealer using his likness). Further, numerous coaches, especially those in the dominant SEC are starting to push for a form of “stipend” for current players. Whether this lawsuit, or some other solution is the right road to take, I think something needs to be done. The players are bringing in millions of dollars for their university, especially the football teams which often subsidize the rest of the atheletic department (like at my alma mater Tennessee). The one thing that we can count on, I believe, is that the NCAA will fight it tooth-and-nail the entire way, since those with the money very rarely want to give any up.

    • Andrew says:

      I agree wholeheartedly with Thomas. I think the NCAA needs to see the writing on the wall and recognize that something is going to have to change. If this change takes place through the courts, it is likely to hurt the NCAA (and its member colleges and universities) more than if they came to some agreement themselves. It is not sustainable for players to continue playing and not receiving any compensation over the entire course of their lives for their years playing in college. College athletes, like every other person, have a right of publicity. Unfortunately for them they sign this right away when they sign their scholarship letters with the school they attend. The real question now is not whether this is going to change, but rather who is going to make the tough decision to change this policy.