Money, it’s a crime
Share it fairly
But don’t take a slice of my pie
– “Money” by Pink Floyd
The Times They Are a-Changin’
– Bob Dylan
The times are changing in college athletics. Most fans of college sports know that college athletes cannot be paid for their efforts without jeopardizing their amateur status and possibly incurring (for them and their schools) severe penalties. This long held bastion of college athletics, however, is under attack from several former and current players who have filed a lawsuit seeking to end this prohibition. While the lawsuit does not seek a “pay for play” model, it may spell the end of amateurism in collegiate athletics as we know it.
Former UCLA basketball star Ed O’Bannon and other athletes sued the NCAA, Electronic Arts and Collegiate Licensing Company for violations of anti-trust law and misappropriation of their names, images and likenesses. The players allege that the defendants conspired to restrain competition relating to the commercial use of their names and likenesses, and seek a portion of the revenue from video games, merchandise, live game broadcasts and other various revenue streams that typically go to the NCAA and its member institutions. Electronic Arts and Collegiate Licensing Company have settled with the plaintiffs. The NCAA has vowed to vigorously defend the lawsuit – not surprising given the fundamental changes sought and the amount of money ultimately at stake.
The NCAA’s most recent salvo came in its request that the federal District Court hearing the case throw out the plaintiff’s anti-trust claims. The NCAA argued that (a) prior Supreme Court jurisprudence mandates that players not be paid, (b) players have no protectable right in sports broadcasts and (c) the Copyright Act preempts any publicity claim the athletes may have. The court disagreed and allowed the anti-trust claims to proceed. The NCAA did not ask the court to dismiss the publicity claims.
The court first turned to the Supreme Court’s decision in NCAA v. Board of Regents, 468 U.S. 85 (1984). The Regents decision examined an NCAA cap on the number of football games schools could televise. Importantly, the Supreme Court in its opinion stated, in dicta, that players could not be paid. The District Court, however, ruled that the Regents case was factually distinguishable and didn’t address the types of claims alleged in the O’Bannon lawsuit. Although the Supreme Court did allow the NCAA leeway in setting anti-competitive rules in order to promote its particular product, the District Court ruled that the Supreme Court never analyzed the ban on athlete compensation through the lens of its effect on the college sports market. Accordingly, the District Court did not consider the Regents case, or its dicta concerning player compensation, binding on it.
The District Court also ruled that the First Amendment did not mandate dismissal of Plaintiff’s claims. While entities are generally permitted to utilize sporting events as news, they generally run into problems when they do so for commercial purposes. Whether the NCAA used past and live game footage for commercial purposes is a factual matter to be investigated by the parties during discovery.
Finally, the District Court rejected the NCAA’s defense that the Copyright Act preempts the players’ claims. The Court noted that the players did not allege that they owned any copyright and that their claims – improper use of their likenesses, etc. – are fundamentally different from copyright claims.
At this stage, the District Court is simply allowing the case to move forward from the pleading phase. The next significant fight will be over class certification. Indeed, this past Monday the NCAA filed additional papers attacking the plaintiff’s proposed class certification