Athletes v. NCAA
Imagine a world in which college conferences could establish rules so their schools could bid on the best football and basketball players coming out of high school.
Or a world in which college athletes could earn added benefits, such as lifetime medical insurance or scholarships to graduate school after competing for their university.
Those are two alternatives on the table if student athletes win a case in Oakland federal court challenging NCAA limits on athletic scholarships as a violation of antitrust law. And after four years of legal wrangling, the trial that has the potential to change the shape of college athletics and what it means to be a student athlete is at hand.
Next month, U.S. District Court Judge Claudia Wilken will hear arguments on whether to allow the NCAA to continue to cap the benefits given to college’s biggest star athletes — football players and male and female basketball players at the nation’s Division I schools.
If Wilken rules against the NCAA and 11 college conferences, she will hear arguments on what injunction should be entered against the NCAA. One calls for the conferences to decide what schools can offer, while an alternative would allow additional, and perhaps significant, benefits for student athletes.
“This case has the potential to radically reform big-time commercialized college sports,” said Stephen Ross, director of the Penn State Institute for Sports Law, Policy, and Research. “This case is incredibly important to everyone in intercollegiate athletics.”
Glenn Wong, executive director of the Sports Law & Business Program of the Sandra Day O’Connor College of Law at Arizona State, noted that while the O’Bannon v. NCAA case and the case of Northwestern football players attempting to unionize seemed to draw more media attention, this case could be far more important. If the players win, it could be the most significant college sports case in more than 30 years.
First Look podcast, with NCAA discussion at the 11:00 mark:
“Should the players ultimately prevail in this case — and it may take years before that is finally decided — it would be the most impactful legal development in college sports since NCAA v. Board of Regents,” Wong said. That 1984 decision fueled the growth of college sports media, conference realignment and the profitability of men’s basketball and football.
“Practically, a ruling in favor of the plaintiffs will likely spur further competition for talent amongst the schools, similar to the increased competition in the television rights market that ensued after Board of Regents,” Wong said.
The official name of this case is far from sexy. “In Re: National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation” doesn’t exactly roll off the tongue.
It’s not about a program with more than 100 years of history, like the Northwestern football program. And it doesn’t have a star name plaintiff like Ed O’Bannon, who led UCLA to a national basketball championship in 1995.
Bench trial set for Sept. 4:
What to expect in Oakland
The lead plaintiffs in this case are lesser-known athletes — football players Martin Jenkins, who played cornerback at Clemson from 2010 to 2014, and Shawne Alston, a running back at West Virginia from 2009 to 2013. In fact, this case was once two cases. Jenkins, represented by famed sports
attorney Jeffrey Kessler, filed his lawsuit in New Jersey in 2014. That same year, Alston, represented by heavy-hitter class-action
attorneys Steve Berman and Bruce Simon, filed against the NCAA in California.
Both cases challenged the NCAA’s limit on athletic scholarships as an antitrust violation, but Alston asked for monetary damages, while Jenkins did not. After a series of motions and court hearings, the two cases were combined into one and sent to the courtroom of Wilken, who also heard the O’Bannon case.
The O’Bannon lawsuit was first filed in 2009, challenging rules preventing players from being paid for the use of their names, images and likenesses. Wilken ruled in favor of the student-athlete plaintiffs in August 2014. In 2015, the 9th U.S. Circuit Court of Appeals upheld Wilken’s decision that the NCAA’s rules were anti-competitive, but said that there were some “procompetitive” justifications for the rules, namely that they promoted amateurism and allowed athletes to be integrated into the student body. The 9th Circuit struck down Wilken’s remedy of paying players while they are in school up to $5,000 for the use of their names, images and likenesses, saying that payment threatened the NCAA’s amateurism model.
In the time since the O’Bannon ruling and when the Jenkins and Alston cases were filed, the NCAA changed its rules allowing schools to pay players the full cost of attendance, a higher amount of money than the traditional sports scholarship.
Last year, the NCAA settled the damages portion of the Alston case, agreeing to pay 43,000 current and former student athletes $208.7 million, representing the difference between the scholarships they had received and the full cost of attendance. Wilken approved that settlement last November.
What comes next month is the athletes’ request for an injunction stopping the NCAA from capping scholarship value.
Wong noted that while the damages were a significant amount of money, it’s the injunction that the sports law world is watching: “The upcoming trial on injunctive relief may completely change the way the NCAA’s member schools do business with respect to athlete compensation.”
Different Than O'Bannon
Simon, who also was involved in the O’Bannon case as a counsel to the plaintiffs, said this case differs in many ways.
“That case challenged NCAA rules prohibiting college athletes from receiving money for the use of their names, images and likenesses — for example, their appearance in a video game,” Simon said. “This trial deals with the larger question of why the NCAA should be able to cap athletic scholarships in the first place.”
Sonny Vaccaro, a retired shoe executive who was a confidant to many top amateur and professional basketball players, sees this case as the second step after O’Bannon. Vaccaro acted as an unpaid adviser to the plaintiffs’ attorneys in the O’Bannon case and helped get O’Bannon to sign on as the lead plaintiff.
“What O’Bannon did is give the athletes courage to sue the NCAA,” said Vaccaro, a vocal critic of the NCAA’s rules and what he sees as a holier-than-thou attitude about the concept of “amateurism.”
“What the NCAA [officials] have done all of their lives is talk about the purity of what they are doing,” Vaccaro said, scoffing. “There have been more scandals in the NCAA than there have been on Wall Street.”
The NCAA is represented by Beth Wilkinson, and the 11 conference defendants — the AAC, ACC, Big 12, Big Ten, Conference USA, MAC, Mountain West, Pac-12, SEC, Sun Belt and WAC — are represented by Proskauer partner Bart Williams. They argued that the case should be thrown out, essentially because the 9th Circuit addressed the same issues in the appeal of O’Bannon. But in her ruling denying summary judgment to both sides, Wilken noted that different rules were being challenged in this case.
Some of the rules were present at the time of O’Bannon, but were not challenged or addressed by Wilken or the appeals court. And the scope of some of those rules have expanded since then. For example, students could previously receive meals incidental to participation in athletics but now may receive unlimited meals and snacks.
Wilken also ruled in that summary judgment that the NCAA’s “restraints produce significant anticompetitive effects within the relevant market.” But the NCAA will be allowed to continue with the current system if it were to “come forward with evidence of the restraints’ procompetitive effects.”
That procompetitive justification essentially involves Wilken answering “yes” to these two questions:
• Are college football and college basketball popular in America because the players are amateurs?
• Do the NCAA rules prohibiting football and basketball players from receiving compensation allow them to be part of the student body at their university?
“I don’t think there’s any dispute here that everyone at the NCAA and the conferences understands that people criticize the NCAA for the rules and whether they should be, you know, prohibiting pay, and all those things,” Wilkinson, lead attorney for the NCAA, said at the pretrial conference for the case. “That’s not anything that there’s any dispute about in this case; that everyone, all the defendants are on notice about those issues. This case is about whether there’s an antitrust violation here.”
After Wilken decides the questions of whether the system serves the procompetitive questions involving amateurism and integration of athletes into the student body, she will then move on to the questions of whether there is a better way to create a procompetitive system.
The two alternatives being proposed by the student-athlete plaintiffs include one in which the conferences, not the NCAA, set the rules. Another allows for student athletes to be offered additional benefits.
Under one proposed alternative, the NCAA could continue to prohibit cash compensation to athletes, but could not prevent other kinds of benefits to be offered to student athletes, such as lifelong health benefits, trust funds for academic achievement, or scholarships for graduate school.
Under the other proposal by the student-athlete plaintiffs, the conferences would set their own rules on what they could offer student athletes.
The second alternative is the one that is causing the most excitement or apprehension depending on which side of the table one sits.
In the pretrial conference last month, Wilken asked whether the plaintiffs were proposing a system in which some players on a team would get paid more or if all of them would be paid the same.
“The conferences will decide,” Kessler answered. “If a conference decided that they wanted to have everyone paid the same thing on the team, no problem. We should leave those decisions up to the conferences.”
Matt Mitten, executive director of the National Sports Law Institute at Marquette University, said if the student-athlete plaintiffs win on this new system, it could worsen the competitive balance problem among college conferences because the more powerful conferences could potentially offer more to highly rated high school student athletes.
“What has already happened is there is this significant disparity of economic resources there,” Mitten said. “You even see it within conferences. If the antitrust case is successful, I think it’s going to exacerbate the disparity between the haves and the have-nots.”
NCAA critic and student-athlete advocate Vaccaro sees it differently. He noted that players in sports other than football and basketball that don’t generate large revenue for the schools are given partial scholarships. The best players, he said, will continue to go to the best schools, with the best coaches and the best training facilities that are being funded by television networks and other revenue. “It will be the same,” he said.
Kessler, who has fought many battles on behalf of professional athletes during his decades as an attorney for unions and players, said that a new system will bring more competition and that is a good thing.
“If we win this case, there will be a better system for the players, a better system for the schools and a better system for college games,” Kessler said. “Because what history shows is that more competition is not only fairer, it is more popular and it helps the sport thrive.”