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NCAA lost the O'Bannon case

Buffnik

Real name isn't Nik
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Junta Member
A federal judge ruled Friday that the NCAA's limits on what major college football and men's basketball players can receive for playing sports "unreasonably restrain trade" in violation of antitrust laws.

U.S. District Judge Claudia Wilken, in a 99-page ruling in favor of a group of plaintiffs led by former UCLA basketball player Ed O'Bannon, issued an injunction that will prevent the NCAA the "from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses in addition to a full grant-in-aid."


http://www.usatoday.com/story/sports/college/2014/08/08/ed-obannon-antitrust-lawsuit-vs-ncaa/13801277/


Wow. So if Florida State wants to start selling Jameis Winston jerseys and paying him a %, I think they can do it.
 
If the NCAA is smart, they'll work a deal where conferences are the ones who control the revenues from the sale of those items. That way, they can be distributed back in a way that won't give one school a huge advantage over other schools.
 
I have no interest in reading the ruling, but many people are saying that the ruling isn't really all that bad for the NCAA.
 
I have no interest in reading the ruling, but many people are saying that the ruling isn't really all that bad for the NCAA.

Aw, c'mon, Man! Its got to be chock full of all sorts of legalese goodies and its only 99 pages! A bargain from a Feddy Court judge...they're known to take 10 pages to explain jurisdiction alone. The justification for Sherman Anti-Trust application has got to be a howler.

Now its time for a reconsideration before an en banc panel of the District Court, then it's appeal time: to the 9th Circus, as I recall. Three years away from finality, at least.
 
what exactly does this change? that statement says the NCAA make a conference prevent players from earning money from TV rights and likeness rights. But in most cases, it is the conference that collects the rights money (outside of the NCAA mens basketball tournament). Can't the conferences just set their own rules and keep most/all of the $$ for their member schools... exactly what they now? Wouldn't a number of groups then have to sue each individual conference?

Funny this comes out a day after the NCAA gives the P5 conferences the right to offer more benefits. P5 is in control now, and was already in control yesterday it seems.
 
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Having looked through the O'bannon opinion, I think that it is both limited and huge, but not for the reasons that people have been generally mentioning.

First, it does not mandate paying players for anything. It says that the NCAA cannot restrict the ability of schools and conferences to pay the players compensation for the use of their names and likenesses (while the original lawsuit was really about video game money, the court decision is all about TV money). They payment does not need to happen when the player is in school, and the NCAA can set an annual cap as low as $5,000 per player, per year. That would mean that each university could be out an extra $500,000 or so a year for football. I bet that this compensation will be organized on the conference level. Also, the compensation can be deferred until graduation, so the player gets a check when they leave school. The compensation can be on top of a full cost of attendance scholarship.

I wonder about the intersection of Title IX and these payments. I think that a good argument can be made that Title IX does not apply, because this is actual compensation, and not an opportunity to play and get a scholarship. Still, you never know what a federal judge is going to do when they get their hands on the inevitable federal Title IX lawsuit. Obviously if Title IX applies, the costs double. Another interesting thing is the fact that conference networks like the PAC-12 Network show things like women's soccer, volleyball, basketball, and such. So the women are on TV, although not on the huge revenue TV. As long as they show these games on the Pac-12 Net (and similar nets), I can't see how the conferences could justify cutting women athletes out.

One thing that this could to is bring back an NCAA football video game, or games. Right now the conferences have TV contracts that pay a set amount. So, if they have to pay players to stay competitive, they are out that money--it is a zero sum game. They will want to add to the revenue stream, and a video game may do that (although I can't see it coming close to filling the financial hole that paying the players will create, it will be something).

Since none of the Big 5 are going to want to be at a complete competitive disatvantage recruiting-wise, I expect that each of the Power-5, and Notre Dame, will quickly establish trust funds to pay each eligible player the maximum $5,000 as soon as they are legally able to do so. Of course, this only elevates the advantage that the recent P5 autonomy vote created for recruiting into the P5. All other things being equal, it is hard for me to see many recruits taking a non-P5 school over a P5 school when the difference is not only a full scholarship versus a non-full one, but a check for $20-25k at the end of school (minus taxes, of course). This gives schools like CU a huge advantage over any non P5 school, and will result in a further separation between the talent of players playing in the P5 and the rest, as you will be unlikely to see competitive athletes go to the (now) lower tier, absent a reason that they really really really want to go to the lower tier school, like family ties, geography, or having enough family money not to care.

In the end, I think that this will solidify and straighten the distinction between P5 and non P5, and in 10 years they will really have to create a separate division. Personally, I would like to see a full-size 100-plus team Division 1 on an equal playing field, and I think that this P5 vs. non-P5 future will not be good for college football. That being said, I would rather see CU with the big boys than stuck in the Mountain West like CSU.

I don't know how many of you remember what may have been the most asinine editorial in the history of the Denver Post, written in the midst of conference shake ups, and advocating for CU to join the MWC. Take a look at it. It was asinine then (we all knew it). It was boneheaded, thoughtless, and ignorant then (we all knew it). One can only imagine where we would be if the CU brass had been nincompoops enough to take it seriously.
 
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Tsar,

Thanks for taking the time to craft an intelligent and well written post on the issue. I think it is way to early to say where this ends up but it certainly does open a can of worms.

With the influence that P5 programs have in many states and the "who cares" attitude in the remainding states I wonder how long it is until we see legislation providing the NCAA and/or the conferences Sherman exemptions not unlike what MLB and some other organizations have. Siince we are not dealing with a constitutional question congress can choose to remedy this overriding the court.

This all assuming that it isn't overturned on appeal.
 
So, does the school pay the player with money the school makes off the player's name or does the player earn the money by selling his/her name but limited to $5,000 per year?
 
So, does the school pay the player with money the school makes off the player's name or does the player earn the money by selling his/her name but limited to $5,000 per year?

What the decision does is prohibit the NCAA from enforcing any rule that would limit the ability of schools/conferences to pay the players up to $5000 per year, which can be deferred. It does not require the NCAA to allow the athletes to be able to sign endorsements or directly make money based on their name/image. I believe this is why O'Bannon's lawyers say that they are going to appeal (they do not in any way consider this to be a total victory, in fact I think that they feel like they pretty much lost).

Here is the language from the most important part of the judge's decision, which spells it all out (sorry for any formatting issues, but I pulled it straight off a PDF, and it probably has all kinds of spacing and similar issues, but I did not want to spend the time to go through and fix them.

VI. Remedy
“The several district courts of the United States are
invested with jurisdiction to prevent and restrain violations” of
§ 1 of the Sherman Act. 15 U.S.C. § 4. Although the NCAA asserts
that Plaintiffs must make a showing of irreparable harm in order
to obtain permanent injunctive relief here, it failed to cite any
authority holding that such a showing is required in an action
brought under the Sherman Act. The Sherman Act itself gives
district courts the authority to enjoin violations of its
provisions and does not impose any additional requirements on
plaintiffs who successfully establish the existence of an
unreasonable restraint of trade. Accordingly, this Court will
enter an injunction to remove any unreasonable elements of the
restraint found in this case.
17 Consistent with the less restrictive alternatives found, the
Court will enjoin the NCAA from enforcing any rules or bylaws that
would prohibit its member schools and conferences from offering
their FBS football or Division I basketball recruits a limited
share of the revenues generated from the use of their names,
images, and likenesses in addition to a full grant-in-aid. The
injunction will not preclude the NCAA from implementing rules
capping the amount of compensation that may be paid to student-
athletes while they are enrolled in school; however, the NCAA will
not be permitted to set this cap below the cost of attendance, as
the term is defined in its current bylaws.
The injunction will also prohibit the NCAA from enforcing any
rules to prevent its member schools and conferences from offering
to deposit a limited share of licensing revenue in trust for their
FBS football and Division I basketball recruits, payable when they
leave school or their eligibility expires. Although the
injunction will permit the NCAA to set a cap on the amount of
money that may be held in trust, it will prohibit the NCAA from
setting a cap of less than five thousand dollars (in 2014 dollars)
for every year that the student-athlete remains academically
eligible to compete. The NCAA’s witnesses stated that their concerns about student-athlete compensation would be minimized ornegated if compensation was capped at a few thousand dollars per
year. This is also comparable to the amount of money that the
NCAA permits student-athletes to receive if they qualify for a
Pell grant and the amount that tennis players may receive prior to
enrollment. None of the other evidence presented at trial
suggests that the NCAA’s legitimate procompetitive goals will be
undermined by allowing such a modest payment. Schools may offer
lower amounts of deferred compensation if they choose but may not
unlawfully conspire with each another in setting these amounts.
To ensure that the NCAA may achieve its goal of integrating
academics and athletics, the injunction will not preclude the NCAA
from enforcing its existing rules -- or enacting new rules -- to
prevent student-athletes from using the money held in trust for
their benefit to obtain other financial benefits while they are
still in school. Furthermore, consistent with Plaintiffs’
representation that they are only seeking to enjoin restrictions
on the sharing of group licensing revenue, the NCAA may enact and
enforce rules ensuring that no school may offer a recruit a
greater share of licensing revenue than it offers any other
recruit in the same class on the same team. The amount of
compensation schools decide to place in trust may vary from year
to year. Nothing in the injunction will preclude the NCAA from
continuing to enforce all of its other existing rules which are
designed to achieve its legitimate procompetitive goals. This
includes its rules prohibiting student-athletes from endorsing
commercial products, setting academic eligibility requirements,
prohibiting schools from creating athlete-only dorms, and settinglimits on practice hours. Nor shall anything in this injunction
preclude the NCAA from enforcing its current rules limiting the
total number of football and basketball scholarships each school
may award, which are not challenged here.
The injunction will not be stayed pending any appeal of this
order but will not take effect until the start of next FBS
football and Division I basketball recruiting cycle.

 
fwiw, I do agree with O'Bannon and his basic premise. He saw tons of people playing a NCAA basketball game that was generating millions of dollars and for which he was digitized as one of the star players... and he didn't get a say in how his likeness was used nor did he make a dime off of it. That's wrong.
 
Any of you legal beagle wannabe's care to speculate how this ruling, if upheld, would have affected the Jeremy Bloom case? Seems like it might have afforded him the ability to remain on the team but maybe $5K wouldn't have been enough money to support his skiing. His was kind of a different case.
 
Any of you legal beagle wannabe's care to speculate how this ruling, if upheld, would have affected the Jeremy Bloom case? Seems like it might have afforded him the ability to remain on the team but maybe $5K wouldn't have been enough money to support his skiing. His was kind of a different case.

I can't see that it would have made a bit of difference. Again, the ruling only says that the NCAA can't prevent the schools/conferences from paying players up to $5k per year for use of likeness. It says nothing about prohibiting placers from making obey outside of that context on their name/likeness, which is by O'Bannon is probably appealing the ruling.

And . . . I'm not a wannabe. I'm a full-fledged beagle. :lol:
 
I can't see that it would have made a bit of difference. Again, the ruling only says that the NCAA can't prevent the schools/conferences from paying players up to $5k per year for use of likeness. It says nothing about prohibiting placers from making obey outside of that context on their name/likeness, which is by O'Bannon is probably appealing the ruling.

And . . . I'm not a wannabe. I'm a full-fledged beagle. :lol:
Then shut your pie hole! I want to hear from wannabe's!! :lol:
 
Any of you legal beagle wannabe's care to speculate how this ruling, if upheld, would have affected the Jeremy Bloom case? Seems like it might have afforded him the ability to remain on the team but maybe $5K wouldn't have been enough money to support his skiing. His was kind of a different case.

Not a beagle, but as I recall, Bloom's case involved direct payments to him or a trust for him, for endorsement of products. O'Bannon involves use of his name/likeness without payment to or permission from O'Bannon. The NCAA thought that if they allowed Bloom to receive endorsements, then the whole kNU team would be out endorsing John Deere tractors for huge bucks!
 
fwiw, I do agree with O'Bannon and his basic premise. He saw tons of people playing a NCAA basketball game that was generating millions of dollars and for which he was digitized as one of the star players... and he didn't get a say in how his likeness was used nor did he make a dime off of it. That's wrong.

:nod: As long as coaching salaries continue to go through the roof, I think its only fair to start going down this road with the players. Lawyers well versed in Title IX have to be drooling right now.
 
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