Antitrust, Basketball, Federal Judges, Sports

Ed O’Bannon Might Kill the NCAA But Not The System

I don’t particularly like the NCAA and I enjoy their legal difficulties as much as the next guy. As a devout college sports fan, the usually arbitrary and always backward business side of the NCAA (including the affiliated schools and “non-profit” bowl associations) causes me great consternation.

Apparently, the incomparable Charles P. Pierce shares my disdain for the lumbering excuse for a fair and credible sanctioning body that currently governs collegiate athletics.

In a sharp Grantland piece, Pierce revisits the Ed O’Bannon-led class-action case against the NCAA and video game manufacturer EA over their combined efforts to profit in perpetuity from the likenesses of unpaid “student ath-o-letes.” (Take it away Eric Cartman!) But I think Pierce is overselling the extent to which a possible O’Bannon victory would really change the college sports landscape….

By way of background, Ed O’Bannon is a former UCLA and pre-Brooklyn Nets basketball player who had retired from the game. It came to his attention that the NCAA had licensed his likeness to EA to make approximately a gajillion dollars selling video games featuring “classic” teams like O’Bannon’s 1996 UCLA Bruins. O’Bannon felt — and he was later joined by basketball legends like Bill Russell and Oscar Robertson, who were stunned to learn a) that they were in a video game and b) what a video game was — that this seemed a little far afield of putting his likeness on a calendar in 1995, which is what he reasonably assumed he was authorizing the NCAA to do when he signed away his rights to profit from the marketing of his collegiate career when he was all of 18 years old.

O’Bannon filed suit in 2009, alleging that the NCAA violated the Sherman Antitrust Act when they forced him to sign a waiver giving up his rights to profit from representations of his collegiate career. As Robert Wheel of SBNation explains:

O’Bannon is alleging that if the NCAA didn’t force him to sign this contract, then he could have gotten money from someone else (say, an EA competitor) to use his likeness. Thus, it essentially fixed the price of using his image at zero. Even if you consider players’ scholarships adequate payment for their services, this still artificially depresses how much they’re paid. If a judge agrees, the waiver would be considered an illegal restraint of trade under the act.

And now O’Bannon and his lawyers are seeking to certify a class of all former athletes used in this way for a trial next year (courts have held that maintaining the amateur status of current student athletes is a laudable enough goal to justify the NCAA robbing current athletes of the fruits of their potentially debilitating labor, so this case only deals with former athletes).

Which brings us to Charles Pierce’s piece. You see, Judge Claudia Wilken of the Northern District of California just denied the defendants’ motion to end the class certification process on the grounds that the plaintiffs have changed their legal strategy. Judge Wilken basically asked, “So?” and the defendants had no response. Pierce contends that this legal setback for the NCAA, along with recent NCAA retreats on the issue of stipends for players, portends an extinction-level event for college sports.

By and large, the people charged with running our various sports conglomerates have proven through history to be as incapable of taking the long view of their own survival as the average brachiosaurus was. They blunder around, eating whatever comes under their noses, trampling the scenery and hooting loudly into the wind. They never see the meteor coming. …

For the NCAA to survive in its current form, it has to win this lawsuit or get the lawsuit dismissed. There’s no third alternative. The NCAA can’t settle and then go back to the status quo ante. It can’t pay off O’Bannon and Russell and Robertson and all the rest of them, and then start business as usual again as regards Cody Zeller or Kenny Boynton. If it loses the lawsuit, the effect on the NCAA’s financial structure would be profound. About which, at this point, the device has not yet been invented capable of measuring how little I care. Instead, I stand aside and listen to the stomping and the hooting from the thick Cretaceous rain forest, which is just loud enough to drown out the high whistling sound of something coming down from the sky.

Pierce’s vision of the O’Bannon case.

I’m not sure comparing the NCAA to the dinosaurs makes much sense. The dinosaurs were wiped out entirely and a new world order replaced their presence. The elimination of the NCAA is more akin to the extinction of the Dodo bird: the weakest, most ineffectual player on the evolutionary stage will saunter off while the crazy dudes with guns and hunting dogs remain on top.

Or maybe Pierce is right about the extent of the mass extinction… but he forgets that the elite athletic departments and conferences aren’t the dinosaurs, they’re the cockroaches. I just don’t trust these folks to go quietly into the night. They’ll let the NCAA take this hit regarding past licensing of “classic team” likenesses and then come up with some new regime where the individual schools capture all the revenue from licensing their own classic teams through bi-lateral agreements with manufacturers to create some semblance of a competitive market for these likenesses and go on exploiting the next generation of future former athletes.

Would that survive legal scrutiny? Maybe not, but the big power players in the sport will happily drag out the issue as long as possible to capture as much profit as possible, even at the expense of the weaker sports schools who would lose out without the NCAA dividing the licensing pot. But for a major athletic department, this is no time for communism! There’s already a roadmap out there to ditch the NCAA and kill off the weaker sports schools leaching off the strong.

So the NCAA might die, but for the players themselves, the motto would be “meet the new boss, same as the old boss.”

The O’Bannon Decision [Grantland]
Ed O’Bannon vs. the NCAA: The antitrust lawsuit explained [SBNation]
NCAA Student-Athlete Licensing Program — How Could It Happen and What Are the Elements? [Winthrop Intelligence]

EarlierPennsylvania Governor and NCAA Go to Court to Cover Their Own Asses

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