Future NCAA Athletes Stand to Benefit From O'Bannon Ruling
U.S. District Court Judge Claudia Wilken may have significantly altered the fate of future college athletes by ruling against the NCAA this week in a long-standing lawsuit over the likeness rights of student-athletes.
Wilken decided that the NCAA's rules, specifically in regard to "prohibiting student-athletes from receiving any compensation for the use of their names, images, and likenesses," were in violation of the Sherman Act. Therefore, she issued an injunction against the NCAA, prohibiting it from disallowing member schools to offer full-cost-of-attendance scholarships and a "limited share of licensing revenue in trust" for Football Bowl Subdivision and Division I basketball players, capped at $5,000 for each year in which the student-athletes remain academically eligible.
The suit, brought about by O'Bannon, a former basketball player at the University of California-Los Angeles, challenged the NCAA's ability to generate revenue off players' likenesses and images without sharing a cut with said players. The NCAA has long argued that to protect the ideals of "amateurism"—a term which proved contentious in this particular case—student-athletes must not be paid anything more than a scholarship for their athletic services.
During testimony, the NCAA claimed that restricting compensation for student-athletes "increase[d] consumer interest in FBS football and Division I basketball," relying upon a survey that found 69 percent of the general public in 2013 to be opposed to paying student-athletes. Thirty-eight percent said they would be less likely to "watch, listen to, or attend games" if student-athletes received $20,000 per year, while 47 percent said the same if student-athletes were paid $50,000 annually.
Wilken wasn't fully convinced by this survey, however, saying that it fell short of credibly proving the NCAA's point about limited compensation driving interest. Multiple testimonies throughout the trial, including from former NCAA president Walter Byers, current NCAA president Mark Emmert, and Christine Plonsky, an associate athletics director at the University of Texas, all backed up the point that consumer interest in NCAA athletics is not primarily driven from the limited compensation student-athletes receive.
The "evidence demonstrates that the NCAA's restrictions on student-athlete pay is not the driving force behind consumer interest in FBS football and Division I basketball," Wilken wrote in her 99-page decision. "Thus, while consumer preferences might justify certain limited restraints on student-athlete compensation, they do not justify the rigid restrictions challenged in this case."
Wilken considered three proposals from the plaintiffs in her decision: allowing schools to offer a full-cost-of-attendance scholarship; allowing student-athletes to receive limited payment from licensing revenue, stowed away in a trust until after they graduate; and allowing student-athletes to be compensated for endorsements while still in school. She decided that the first two would not impede "the NCAA's efforts to achieve its stated purposes," but ruled that the endorsement proposal (often referred to as the "Olympic model") did not "offer the NCAA a viable means of achieving its stated goals."
Therefore, she ruled that beginning with the next Football Bowl Subdivision and Division I basketball recruiting cycle, the NCAA could not prohibit schools from offering full-cost-of-attendance scholarships and the $5,000-per-year trusts to prospective student-athletes. According to ESPN.com, the new regulations won't affect any prospective recruits before July 1, 2016, as the NCAA has already vowed to appeal Wilken's ruling, per Yahoo Sports' Dan Wetzel.
Between this decision and the NCAA's adoption of a new governance model, this could prove to be one of the most momentous weeks in the history of college sports. Assuming the NCAA loses its appeal, future collegiate athletes could be staring at upwards of $20,000 in trust money when they graduate, marking a dramatic shift from the current modus operandi of college sports.
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