O’Bannon Case: Judge Found NCAA “Unreasonably Restrain[ed] Trade”

U.S. District Judge Claudia Wilken in her decision wrote “The evidence . . . demonstrates that student-athletes themselves are harmed by the price-fixing agreement.”  Having found that the NCAA has violated antitrust laws, Judge Wilken issued an injunction prohibiting the NCAA “from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses in addition to a full grant-in-aid.”  The injunction, at the earliest, will affect the recruits entering school in 2016.

The ruling prevents the NCAA to set a deferred compensation limit of less than $5,000 for every year an athlete remains eligible to play.  When the athlete’s eligibility expires or he or she graduates, the money would then be payable.  Schools may offer below the NCAA maximum amount, but they must not conspire to set the amounts they offer.  While allowing the NCAA to limit the amount of new compensation players can receive, the decision disallows a cap less than the players’ actual cost of attending school, including out-of-pocket expenses like transportation costs.  Additionally, to prevent commercial exploitation of student-athletes, Judge Wilken banned student-athletes from endorsing commercial products.

The decision also addresses specifically student-athletes’ rights to their names, images, and likenesses(“NILs”).  Although the judge found a submarket exists where TV networks seek to obtain group licenses to use players’ NILs during live game broadcasts, the O’Bannon plaintiffs failed to prove their harm was caused by a restraint in the submarket for group licensing, according to the ruling.  Further, Judge Wilken noted because a TV network in telecasting a sporting event would typically need to acquire a group license from every participating team in the event, no competition among the teams to sell their group licenses would likely occur.

Following Judge Wilken’s decision on Friday, the NCAA on Sunday announced its intention to appeal.

Judge releases ruling on O’Bannon case: NCAA loses

O’Bannon judge rules NCAA violates antitrust law

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