SBD/August 11, 2014/Colleges

Conferences, Schools Look For Clarity In O'Bannon Ruling As NCAA Plans Appeal

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Emmert does not think there is a current violation of antitrust laws
NCAA President Mark Emmert yesterday said the organization "will appeal" U.S. District Court judge Claudia Wilken's ruling in the Ed O'Bannon case that the NCAA cannot stop players from selling the rights to their names, images and likenesses. Emmert said, "Yes, at least in part we will. No one from our legal team or the college conferences' legal teams think this is a violation of antitrust laws and we need to get that settled in the courts" ("This Week with George Stephanopoulos," ABC, 8/10). NCAA Exec VP & General Counsel Donald Remy in a statement said, "We remain confident that the NCAA has not violated antitrust laws. We will also be seeking clarity from the district court on some details of the ruling" (LATIMES.com, 8/10). In N.Y., Marc Tracy notes the clarity the NCAA seeks "most likely concerns the substance of Wilken’s injunction." That ruling "bars the NCAA from prohibiting any university from compensating athletes with at least grants-in-aid, or through trust funds the athletes would gain access to after their playing careers, in which payment could be capped by the NCAA at levels as low as $5,000 a year per athlete" (N.Y. TIMES, 8/11). Sources said that the NCAA, its member schools and conferences are "weighing whether to request from Congress exemption from antitrust laws" if Wilken's ruling ultimately holds. Emmert said recently that he "believes there may be enough political backing to support such a request" (WALL STREET JOURNAL, 8/11). 

EXPANDING THE IMPACT: USA TODAY's Steve Berkowitz reported Michael Hausfeld, the plaintiffs' lead attorney, is "already looking at ways to expand the ruling's impact." Hausfeld's team is "examining other legal claims they could make, including challenges on behalf of athletes in sports other than football and men's basketball and on behalf of individual athletes." Hausfeld also is "considering increased involvement in the case now before the National Labor Relations Board" concerning Northwestern Univ. football players' efforts to unionize. Indiana Univ. Law School dean emeritus Gary Roberts said Wilken's ruling "will not be the definitive statement of the case," as the 9th Circuit Court of Appeals "will hear the case" (USATODAY.com, 8/9).

LOOKING FOR CLARITY: In N.Y., Strauss, Eder & Tracy noted Wilken in her 99-page ruling gave NCAA officials "hope that any required changes might not be the death knell that seemed imminent." She said that the limit on payments to athletes "could be as little as $5,000 a year." By Saturday, university leaders and conference commissioners were "trying to sort through the ramifications of the ruling," and so far, the NCAA "has not had a lot of answers for its members, as the organization seeks further clarification." Most schools and conferences are "particularly interested in understanding how" suggested trust funds might work. Former Univ. of Georgia President Michael Adams said, "You'll hear more calls for an antitrust exemption. I think you'll see Congress take another hard look at all of this" (N.Y. TIMES, 8/10). The TIMES' Strauss & Tracy in a front-page piece noted the ruling "does not mandate that players be paid," but it "could allow universities to engage in bidding wars for the best athletes." However, the NCAA would "probably try to prevent that by capping payments, which Judge Wilken said was permissible." Wilken added that she "fully expected the universities to shoulder the additional costs." Wilken wrote, “The high coaches’ salaries and rapidly increasing spending on training facilities at many schools suggest that these schools would, in fact, be able to afford to offer their student-athletes a limited share of the licensing revenue generated from their use of the student-athletes’ own names, images, and likenesses." Strauss & Tracy reported Wilken's ruling "allows universities to provide athletes trust funds, as well as annual payments that reflect the full cost of attending school." Advocates for student-athletes "declared it a major victory" (N.Y. TIMES, 8/9).

WHAT IT MEANS: The WALL STREET JOURNAL's Terlep & Cohen noted Wilken "stopped well short of giving schools free rein to cut big paychecks" to athletes. But the decision "opens the door for college players at the nation's athletic powerhouses to earn a cut of the hundreds in millions they generate for the first time in the 108-year history of the NCAA." The ruling creates a new expense that "many powerhouses can still afford." The injunction would "go into effect July 1, 2016." Plaintiffs' attorney Bill Isaacson said, "This is a significant step forward. She struck down the restrictions and is allowing the schools to do reasonable and decent things." Meanwhile, Tulane law professor Gabe Feldman said that the ruling "doesn't represent the worst-case scenario for the NCAA ... but it marks a departure from the legal system's historical deference" to the organization (WSJ.com, 8/8). In Pittsburgh, J. Brady McCollough wrote the ruling is a "death blow to the ideal of amateurism in college sports and has the potential to alter the athletic landscape on college campuses across the country" (PITTSBURGH POST-GAZETTE, 8/9). SI.com's Michael McCann wrote the ruling is a "significant, but carefully limited, legal victory for advocates of student-athletes." Wilken's "injunction of NCAA rules and policies seemed almost tepid." For instance, Wilken’s injunction "permits the NCAA to cap compensation to student-athletes at the cost of attendance." Wilken "similarly offered a restrained remedy in regards to NIL rights." She also "ruled that the NCAA can continue to prohibit student-athletes from endorsing products." Wilken provided a "de facto victory for television networks, media companies and video game publishers that profit from college sports." She reasoned these companies are "not obligated to negotiate group licenses with student-athletes." The NCAA’s "last step would be to petition the U.S. Supreme Court for review." However, the Supreme Court is "unlikely to hear the case, as it only grants cert to about one percent of petitions." If the appeals process fails, the NCAA would be "forced to fully comply with Wilken’s order." But the appeals process is "not the NCAA’s only legal recourse." The NCAA also could "petition Congress and President Obama to pass a law that would effectively reverse Wilken’s order." The odds seem "decidedly stacked against legislative intervention," and Wilken seemed "frustrated that she could not do more for O'Bannon under antitrust law" (SI.com, 8/9).

NCAA'S NEXT MOVE: In DC, Rick Maese wrote the NCAA's "course of action is unknown." Hausfeld said, "They're some of the most close-minded individuals I've ever comes across in almost 50 years of practice" (WASHINGTON POST, 8/10). ESPN.com's Lester Munson wrote the ruling could "haunt the NCAA in other litigation." Lawyers for other players "challenging other NCAA rules will argue that Wilken's rulings apply to all situations." Meanwhile, it is a "triumph" for student-athletes, but it is "far from the triumph the players and their lawyers envisioned when they began this quest five years ago." The "real victory" for the athletes will come in the scholarship case filed by prominent sports attorney Jeffrey Kessler when the Kessler team "asks for a court order that eliminates all restrictions on pay for performance." The "turning point of the trial was the testimony of Roger Noll, a retired Stanford economist who testified for the athletes and explained college sports to Judge Wilken." Munson: "Again and again in her 99-page opinion, Wilken relied on Noll's studies and expertise to support her decision" (ESPN.com, 8/9). 

SUPREME RAMIFICATIONS: O'Bannon on Saturday said, "You want to go to the Supreme Court, let's go. I've got my ticket already." The AP's Tim Dahlberg wrote the ruling "did leave college administrators pondering its potential ramifications and how they might go about implementing such a compensation system." SMU AD Rick Hart: "It goes on the list of items that will need to be part of our budget projections. As we prioritize how we allocate resources we'll try to get a better feel of what this will represent." There are "plenty of questions to answer such as: Who will handle the trust fund? Could this money be taxable because it exceeds federal financial aid limits? Will paying one group of male athletes put schools in danger of violating federal gender equity laws covered by Title IX?" Hart: "There's not a lot of clarity" (AP, 8/9). Big 12 Commissioner Bob Bowlsby said it was a "very measured response from the court" that leaves the "collegiate model intact." But he said, "We still have a lot of questions. ... What impact will it have on Olympic sports? What are the implications for Title IX? There are many unanswered questions as we sit here three days after the verdict. But I think in large measure, this is good for student athletes" ("Mike & Mike," ESPN Radio, 8/11). O'Bannon said, "This is just the tip of the iceberg. I think that a lot of change is going to happen. This is just the beginning." O'Bannon said that allowing players to "receive compensation ... relieves pressure to leave after one year of college in the case of basketball stars, and three years in the case of football." O'Bannon: "I don't think that players will be in a hurry to leave (anymore) and test their professional status. Hopefully, they will stay in school a little bit longer" (ESPN.com, 8/9).

DAZED & CONFUSED: In San Jose, Mark Purdy wrote the ruling for now is "mostly a confusion bomb." Purdy: "This was a revolution! No, it was a disaster! No, it was a major or minor thrust in either the right or wrong direction!" (SAN JOSE MERCURY NEWS, 8/10). But SI.com's Andy Staples wrote Wilken despite "thrashing the NCAA for its pitiful defense of what it purports to be its guiding principles ... threw the embattled association a lifeline." It is a "thin one," but it "gives the NCAA a fighting chance." Wilken did "not fundamentally change the business model for major college sports -- even though she could have." This is a "defeat for the NCAA and the schools, but it could have been much, much worse." She "didn’t ban the NCAA from creating any rules that ban athletes from selling their name, image and likeness rights individually." However, she "did seem to put serious stock into statements by NCAA witnesses such as television consultant Neal Pilson and Stanford athletic director Bernard Muir that paying athletes a smaller amount wouldn’t change fans’ feelings as much as paying athletes a large amount would." At one point, Wilken also "mystifyingly seemed to agree with the NCAA that it must 'protect' athletes against 'commercial exploitation.'” The NCAA "lost the O’Bannon case, but its way of doing business survived" (SI.com, 8/9).

AMATEUR HOUR: SI.com's Zac Ellis wrote Wilken's ruling is "obviously a major hit to the NCAA's current model of amateurism." The ruling "shifts a bedrock principle of the NCAA's amateurism model: Student-athletes can now receive a form of compensation without being deemed ineligible." The O'Bannon ruling is "just the tip of the iceberg" (SI.com, 8/9). In N.Y., William Rhoden wrote the decision will "prove revolutionary for college sports." The "highly commercialized intercollegiate sports system that masquerades as an educational enterprise has been ordered to begin sharing its profits." Friday’s decision "may be equitable, but it will only escalate the so-called arms race in intercollegiate athletics." The "only flaw in the decision was when athletes would receive the money: when they leave college." Rhoden: "I would much rather have it designate 'when they graduate'” (N.Y. TIMES, 8/10). CBSSPORTS.com's Jon Solomon wrote Wilken's ruling "reflected caution and, perhaps, an incremental step for what the future may bring." No one has "debated the legality of the cap," and Wilken "seemed hesitant to do too much too soon" (CBSSPORTS.com, 8/9). Northeastern Univ. law professor Roger Abrams: "We can guess that, if things continue along this path, the NCAA will have the same influence as the AAU does now. Which is nothing" (NEWSDAY, 8/10). ESPN.com's Dana O'Neil wrote, "Athletes 1, NCAA 0" (ESPN.com, 8/9). 

HIGHER ED-UCATION: O'Bannon said, “I want to be clear on a few things. I didn’t set out to be the bad guy, and we didn’t bankrupt college athletics. That was a big deal. That was a mainstay for us. Saturdays are still going to be special. Our tournaments in March will still have madness.” He added, "This has been a long five-plus years. Looking back on this lawsuit, there have been a lot twists, a lot turns, a lot of peaks, a lot of valleys, a lot of ups and downs. Through it all, I never wanted to be the bad guy. I wanted to help the best way I could the college athlete" (LAS VEGAS SUN, 8/10). More O'Bannon: "My biggest thing was to spark change, to spark conversation. ... I have said before that I went to class, I was there to play basketball and that sort of thing, and I did the bare minimum. I think the NCAA did the bare minimum. I think that a lot of ... college athletes are getting by on the bare minimum. I think there are billions of dollars being made and these rules that are in place have been in place for like 100 years and haven't been changed when it comes to respect to the money. Times have changed, the timing has changed, the game has change, and I think these rules need to change" ("Mike & Mike," ESPN Radio, 8/11).
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