A federal judge in Oakland ruled on Friday in the Ed O'Bannon litigation that the NCAA must eliminate its rules against payments to college athletes for commercial use of their names, images and likenesses. The ruling and the judge's 99-page opinion raise significant legal questions about the NCAA's governance of college sports and paying college athletes for their performances. Here are some of the questions and their answers:
Q: What is the impact of the O'Bannon ruling on the NCAA?
A: The NCAA and its lawyers claimed that the NCAA was not a monopoly, that it restrictions on payments to college athletes were reasonable and that its rules were based on the organization's core principle of amateurism. On these three claims, the NCAA went 0-for-3. U.S. District Judge Claudia Wilken rejected the NCAA's assertion that its restraints on payments to college athletes were justified as part of a commitment to amateurism. The ruling is not just a loss in one of many cases. It is a significant ruling that 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. In what has become known as the " Kessler case," for example, attorney Jeffrey Kessler and his player-clients will assert that the big antitrust issues have now been decided. It is an argument that is likely to be successful.
Q: Is the ruling a triumph for the players?
A: It is a triumph in the sense that players will now for the first time be able to collect money for what they do. But it is far from the triumph the players and their lawyers envisioned when they began this quest five years ago. The payment authorized by Judge Wilken in the formal injunction is capped at $5,000 per athlete per year of competition. Her ruling says the NCAA is restrained from prohibiting an athlete from getting deferred compension of $5,000 or less (currently, an athlete gets nothing). In a typical NCAA career of five years, a player could collect only $25,000. In their attempt to gain a share of TV revenue for live broadcasts of their games, the players were not thinking of thousands of dollars, they were thinking of hundreds of thousands of dollars. Instead of allowing the players to use their leverage to collect a large portion of huge television contracts,
Q: Will there be an appeal of this ruling?
A: Yes. It is possible that both sides will appeal this ruling. The NCAA will seek to reverse Wilken's finding that the organization violated antitrust laws with its restrictions on payments to athletes. Judge Wilken concluded that the NCAA "has the power -- and exercises that power -- to fix prices and restrain competition in the college education market." As accurate and as obvious as her ruling seems to be, the NCAA cannot accept it. It must appeal the ruling to preserve even a slim chance in the other antitrust cases the NCAA faces, and it must persist in its claim that its rules are reasonable and legal. The players may decide to appeal the judge's limit of $5,000 per season. There are serious technical problems that develop inevitably when a judge seeks to become a part of the governing process of a large organization. The players might argue in an appeal that the limit is beyond the power of any judge anywhere and must be eliminated. Success in the appeal would open an enormous market to players for payment for their performances.
Q: If both sides will appeal the ruling, who won?
A: There is little doubt that the players are the winners. The ruling opens the door to pay for play for college athletes. The real victory for the athletes will come in the Kessler case when the Kessler team asks for a court order that eliminates all restrictions on pay for performance. But the NCAA was also a winner. Its leaders and lawyers will never admit it, but they are relieved that Judge Wilken limited the athletes to $5,000 per season. They know it could have been much worse. If the players had suggested before the trial that they would settle for $5,000 per season, it is entirely possible the NCAA would have accepted the offer and settled the case. Despite all of the NCAA rhetoric about amateurism, it would be easy to redefine amateurism to include the $5,000 payments. Some in the NCAA camp will argue that they should accept this ruling and refrain from filing an appeal.
Q: What was the turning point of the trial?
A: 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. Again and again in her 99-page opinion, Wilken relied on Noll's studies and expertise to support her decision. On everything from recruiting rules to the "competitive balance," Wilken used Noll's testimony as the basis for her analysis. If there were a rating system for expert witnesses like the rating system in the NFL for quarterbacks, Noll would have broken all records with his testimony for O'Bannon and the other athletes. He was charming, he was knowledgeable and he was insightful. Wilken recognized it and relied on him throughout her opinion.