Collegiate Athletics: For the love of the game, or the love of money?

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What do EA Sports, the National Collegiate Athletic Association (NCAA), and the Collegiate Licensing Company all have in common?  They are all named defendants in one of the most impactful lawsuits in collegiate athletics history.  The lawsuit that could potentially lead to the demise of the NCAA as we know it is an intermingling of two separate lawsuits from 2009: O’Bannon v. NCAA and Keller v. EA Sports.  Both cases arise from the same factual basis: college athletics programs, organizations, and essentially everyone involved but the athletes (e.g., the NCAA, EA Sports, and the Collegiate Licensing Company) making money by using the likeness of collegiate athletes in footage, video games, and promotional materials, such as photographs and commercials.

The plaintiffs O’Bannon and Keller, among others who have since joined the lawsuit, believe that compensation is owed to those players beyond the scholarships they receive as student athletes.  The NCAA believes that paying athletes violates its bedrock principle of amateurism, which protects these student-athletes from commercialism.

O’Bannon v. NCAA will move forward on June 20, 2013 for class certification, which could dramatically change college athletics.

Today, O’Bannon v. NCAA includes many former NCAA athletes in addition to former UCLA power forward Ed O’Bannon, including Nebraska quarterback Sam Keller, University of Cincinnati guard Oscar Robertson, San Francisco center Bill Russell, and Ohio State University safety Ray Ellis.  In March 10, 2010 O’Bannon and Keller requested that the suit be certified as a class action, which would join the relatively small number of plaintiffs at this point—considering the number of players the lawsuit affects—and possibly increase the number into the thousands.

In response to O’Bannon’s request for class certification, the NCAA stated that the class-action lawsuit has prompted rampant misrepresentations of the facts.  The NCAA stood by their word that they do not license student-athlete likeness for any commercial purpose and that collegiate athletes are free to sign endorsements as soon as their eligibility ceases.  The NCAA cited several examples of this, including Tim Tebow’s auction of his autograph—apparently worth $160 at the time— in March of 2010 while still a University of Florida student but prior to being drafted into the National Football League.

Still awaiting a ruling on the class-action portion of the case, O’Bannon filed another motion on August 31, 2012 to include current student-athletes in the class. The plaintiff’s brief stated that current student-athletes should be given temporary trusts, which would be dispersed at the conclusion of their college athletics eligibility.  The trust would be comprised of funds from sporting events that allegedly sell the names, images, and likenesses of those collegiate athletes.  On March 14, 2013, the NCAA filed a brief in opposition of the class certification for student-athletes.  The NCAA, in a statement through their General Counsel, Donald Remy, said that amateurism in college athletics has been routinely upheld by the courts.

The next key moment will occur on June 20, 2013 in Oakland, California, where federal judge Claudia Wilken will hold a class certification hearing.  While much of the arguments are being kept under lock and key, the assumption is that the NCAA will rely upon the traditional argument in opposing class certification – that these athletes do not have enough in common to be considered a class.  Should the NCAA succeed in opposing the certification, the resulting “win” could have the unintended consequence of opening the NCAA up to an untold number of individual lawsuits.  The potential for litigation could come from many famous college athletes, such as current Texas A&M Quarterback and 2012 Heisman Trophy winner Johnny Manziel.

Playing football at the Division I level is equivalent to a full time job.  Since full scholarship athletes are not allowed to work another job, they are left with little disposable income.

Adrian Baker, a defensive end for Bowling Green State University from 2004 to 2008 told the Law Observer that athletes frequently discuss their opinion on college athletes receiving benefits for their likeness.  Baker, claiming that he speaks for the athletes as a whole, feels that they should be compensated and should receive licensing benefits or some sort of sponsorship outside of their scholarships.  To Baker, playing football at the Division I level is equivalent to a full time job.  Since full scholarship athletes are not allowed to work another job, they are left with little disposable income.

One solution to this problem would be to provide athletes with additional funding for their likeness.  Although the NCAA clings to the argument that amateurism will be lost if athletes are compensated at the collegiate level, Baker points out that if the NCAA was to allow for unlimited compensation, like the NFL, amateurism could become a thing of the past.  If compensation were unlimited, an athlete’s initial goal would be to make it to Division I and reaching the professional level would then become “the icing on the cake”.  In other words, it would incentivize the most talented athletes to pursue a college career, and as a result, receive a full college education.

Travis Baltz, a punter and placekicker for Maryland from 2007-2010 echoed Baker’s sentiments.  Baltz thinks that the collegiate athletic system amounts to indentured servitude.  He points out that while a free education is a good payment, the money that the schools earn off of players compared to the scholarship the players receive is highly disproportionate.  Noting a deficiency in the viewpoint that college athletes should receive more compensation, Baltz acknowledges that this “solution” has the potential to transform into a slippery slope.

Other non-revenue sports, such as baseball, swimming, gymnastics, and volleyball, would likely suffer as a result of the redirection of profits back to football and basketball athletes.  In addition, Baltz recognizes another issue regarding the amount that each player is compensated.  Schools such as Ohio State University, the University of Texas, and other programs equivalent in size would be able to pay players far more than any smaller schools.  Because the difference is so variable, especially among conferences, Baltz suggested a stipend on top of an athlete’s scholarship, set by each conference individually.  He believes that this would allow players to be compensated for the use of their likeness, but it would still keep the amount of payment “within reason.”

While those who have a stake in college athletics sit on pins and needles, there are multiple potential outcomes in O’Bannon v. NCAA.

Despite later changing his tune, Jim Delany, the commissioner of the Big Ten, stated that there should be no compromise in O’Bannon v. NCAA.  Mr. Delaney even went so far as threatening to move the Big Ten conference into a Division III model, where athletic scholarships would be obsolete.  And Delany is not alone.  Harvey Perlman, the chancellor at the University of Nebraska at Lincoln stated that if college athletes were paid, college athletics would be transformed into professional athletics. In turn, college athletics could no longer be justified as being in the realm of higher education. While those who have a stake in college athletics sit on pins and needles, there are multiple potential outcomes in O’Bannon:

1. The Class Is Not Certified

This is the most simplistic option.  If the class is not certified, athletes would then need to bring their lawsuits individually against the NCAA, EA Sports, or whomever they wish.  It would prove to be costly for both sides involved, as separate litigation fees would be associated with each lawsuit.

2. The Class Gets Certified and the Case Goes To Trial

If the NCAA prevails at trial, the current standards for college athletes would remain.  However, if O’Bannon prevails at trial, the jury could award damages to the plaintiffs.  The impact of this could be significant, as it could completely upend the status quo in college athletics, bankrupting the NCAA and potentially leading to universities forming an entirely new governing body.  Athletes would be entitled to revenue from their likenesses, and schools would need to revamp the way in which they spend the funds they have.

3. The Class Gets Certified and the Parties Settle the Case

If the plaintiffs were to get certified as a class, the NCAA would likely be more inclined to settle with the athletes in order to avoid further costs.  Determining a settlement amount for the potential thousands of athletes would be a complex task, but it is the only alternative to going to a jury trial where the NCAA could stand to lose more.

For now, we are all left to sit back and ponder if imitation is really the sincerest form of flattery, or if it is just a cheaper alternative to paying collegiate athletes for using their likeness.