SBD/June 21, 2013/Marketing and Sponsorship

Is Judge Holding Reservations In O'Bannon V. NCAA Case?

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O'Bannon's frustration at seeing his avatar used in EA's video games led to the suit
While legal experts expect Judge Claudia Wilken, who is ruling on the O'Bannon v. NCAA case, will “in fact certify the class, some of her questions Thursday signaled she might be holding reservations,” according to Stewart Mandel of SI.com. The case originated from former UCLA basketball player Ed O'Bannon's “frustration at seeing his avatar used in one of EA's video games without his permission.” But only about “the last 15 minutes of Thursday's hearing dealt with video games.” Wilken was “far more concerned with the NCAA's contention that the plaintiffs unfairly ‘changed their theory’ behind the case last year when they broadened it to include athletes' rights to a share of the television revenue generated from their game broadcasts.” The notion that “certain members of the proposed class might benefit more than others is one of the NCAA's chief arguments against certification.” Mandel noted a “significant moment occurred late in the hearing when Wilken raised the topic of injunctive relief (as opposed to damages), which would more directly impact current athletes.” Wilken noted to plaintiffs' attorney Michael Hausfeld that he “didn't have any current students” as part of the class. Considering EA Sports' “once-prominent role in the case, it was interesting that lawyers for that company and fellow co-defendant CLC were only briefly questioned at the end.” EA attorney Robert Van Nest “essentially argued that the company should no longer be included in the suit because the plaintiffs' case has evolved into a crusade against NCAA amateurism policy.” Wilken sometime in the next few weeks “will issue her class certification ruling, at which point we'll get a better gauge of just how radically that business might change” (SI.com, 6/20). The AP’s Paul Elias noted Wilken “ordered O’Bannon’s lawyers to revise the lawsuit to fix some legal technicalities, including explicating adding current players to the lawsuit.” Hausfeld said that he will “file a new lawsuit that includes current players, but will seek to keep their names confidential” (AP, 6/20).

CHANGES ON THE HORIZON? ESPN.com’s Tom Farrey noted Wilken also “suggested the sides work with a mediator, another good sign for the plaintiffs.” If O'Bannon and “the other named plaintiffs are allowed to invite thousands of current and former players into the lawsuit ... potential damages to the NCAA and its co-defendants from an adverse decision could grow into the billions.” Even if “they aren't, scenarios exist that still could force the NCAA to revise its ban on athletes receiving more than an athletic scholarship for their services.” Farrey wrote, “If you thought [NCAA President Mark Emmert] has lost friends in high places lately, just wait if university presidents have to address an issue they've been able to duck for, well, forever.” Farrey: “It takes a brave judge to want to shake up a popular institution, even if it's seen to be in violation of the law.” But by “laying out its case this early in the process, the NCAA is gambling that it also hasn't revealed critical flaws in its argument” (ESPN.com, 6/20). Marquette University National Sports Law Institute Dir Matthew Mitten said that the NCAA “could face foreboding consequences should the case be turned into a class-action lawsuit.” But he added that the NCAA “could take solace in prior rulings that have given the organization wide powers to make rulings to preserve the amateur status of players.” Mitten said, "I’m not one who believes this case is a potential earthquake. Student athletes are already compensated with scholarships that have the economic value of four or five years of college" (Newark STAR-LEDGER, 6/21). ESPN's Rod Gilmore said, “If they ultimately have to share that money, it's probably going to happen years from now and it will be money that likely goes into a trust that is paid to the players over time after they are out of their eligibility, and that money will come away from coaches and administrators more than likely” ("College Football Live," ESPN2, 6/20).
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