What’s Next, Civil Litigation Against Sports Memorabilia Dealers for Improper Dealings with College-Athletes?

Your favorite college football team loses its star quarterback or running back due to a suspension for NCAA violations related to compensation received from a sports memorabilia dealer for autographing multiple items that the dealer sells.  The college suffers damage in the form of potential lost ticket sales, merchandising, bowl revenue, and negative publicity.  Does the university have any recourse against the dealer who stands outside the reach of NCAA oversight but who profits from the offending transactions?

NCAA Bylaw 12.5.2.1 prohibits student-athletes from accepting “any remuneration for or permits the use of his or her name or picture to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind” and from receiving “remuneration for endorsing a commercial product or service through the individual’s use of such product or service.”  Penalties for violations may include suspensions to the student-athlete and possible sanctions to the university.

The NCAA, of course, does not have regulatory control over private individuals and entities who sell sports memorabilia.  Calls for self-regulation by the sports memorabilia industry are both unrealistic and unfair to autograph authenticators and subsequent bona fide purchasers who likely have no knowledge of any conveyance of compensation to the athlete.  Universities, however, may not be powerless but may start looking at the civil lawsuit as a means to recover damages caused by the violations, and perhaps prevent or discourage future NCAA rule violations caused by memorabilia dealers.

It is well-established that a school and its student-athletes have a contractual relationship.  Therefore, a possible civil action by a school against a memorabilia dealer may be based on a tortious interference with contract theory.  The elements of a claim for tortious interference with contract, under New York law, for instance, are: (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge of the contract; (3) the defendant’s intentional procurement of the third-party’s breach of the contract without justification; (4) actual breach of the contract; and (5) damages resulting therefrom.  Such a claim against a memorabilia dealer who induced a student-athlete to breach his or her contract with the university by signing autographs in exchange for cash is analogous to similar claims that have been asserted against sports agents whose payments to student-athletes caused NCAA sanctions and resulting economic damage to the university.

Time will tell whether universities decide to go this route and thereby add to the growing list of civil litigation surrounding college athletics.  Unless the NCAA decides to change course and permit athletes to be compensated for signing autographs, the frequent recurrence of the issue suggests that civil litigation against sports memorabilia dealers is not out of the question.

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