O’Bannon Lawsuit Could Change the Face of NCAA Athletics

Former UCLA basketball player Ed O’Bannon began his antitrust legal dispute against the National Collegiate Athletic Association (“NCAA”) back in 2009, when he sued the NCAA for wrongfully profiting off the likenesses of former student athletes in EA Sports video games.  The suit accuses the NCAA of forcing students to waive the right to make money off of their likenesses, a behavior which amounts to an illegal restraint of trade.

In a new twist, in her January ruling, federal Judge Claudia Wilken permitted O’Bannon to add current student athletes as plaintiffs in the case.  More importantly, Judge Wilken also indicated that the plaintiffs could sue everyone that was potentially profiting off player likenesses – including scholastic conferences and television networks that broadcast the games.  In other words, the deep pockets just got deeper.

The next major event in the case is the class certification hearing scheduled for June 20, 2013 in Oakland, California.  If plaintiffs manage to certify a class, it could open the NCAA and other defendants up to catastrophic damage awards (given that these awards are tripled in antitrust cases).  If the plaintiffs fail to achieve certification, individuals could still file suit against the league, but they would have to do so and incur the legal costs on their own – an obvious deterrent.

What will be interesting is how the NCAA reacts if the class is certified and it decides to settle the case.  Some have speculated that the NCAA will require that schools set aside a certain amount of revenue received from sporting events for distribution to student athletes.  In theory, this money would be retained in trust until the student earned a degree – only then would the money be disbursed.  Still, if students are later “paid” for their athletic participation, a whole new level of tax and Worker’s Compensation issues may plague the organization for years to come.

Ed O’Bannon v. The NCAA: A complete case primer

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