NCAA Appeals Fee Bond, Argues Detriment to Mission

On Tuesday, May, 10, 2016, the NCAA appealed to the Ninth Circuit, arguing that it was unnecessary to reserve more than $42 million in attorneys’ fees and costs associated with the appeal in the O’Bannon case. Initially, the judge ordered that the NCAA pay plaintiffs’ attorneys for the college athletes’ name, image, and likeness class action suit a total of $44.4 million in fees and $1.5 million in costs, but the fees were later reduced $40.8 million.

The NCAA claims that the players’ attorneys are seeking to receive their judgment award early, noting that fees could substantially change during appeal. The NCAA submitted that a fee bond is unnecessary, as the NCAA has $900 million in annual revenues and $650 million in liquid securities assets. Furthermore, the NCAA offered its continued revenue growth since 2001 and recent $8.8 billion media rights contract extension with CBS and Turner Broadcasting as evidence that the organization will remain financially stable until all legal options have been exhausted in the case. Nonetheless, the players argued that there is no guarantee the NCAA will maintain its current financial position.

The NCAA’s reply stated:

“The overwhelming majority of the NCAA’s revenues are utilized in various ways to benefit college athletes. Plaintiffs’ suggestion to deposit the money into a low-interest-bearing escrow account undermines this objective while adding virtually no additional ‘meaningful security.”

The players assert that if the money is not set aside, the NCAA will enjoy the ability to drag out the suit to invest and profit off the funds, while the NCAA argues that the money is intended to be used for students. As part of the NCAA’s mission, the organization uses funds to “[equip] student-athletes to succeed on the playing field, in the classroom and throughout life.” According to the NCAA website, “90 cents of every dollar” goes to student-athlete support. Securing a  surety bond would be detrimental to the intended use of finances, restricting funds in a low-interest escrow account. Additionally, the surety bond would cost the NCAA over $500,000.

Currently, the NCAA is considering an appeal to the U.S. Supreme Court over the upheld portion of the September 2015 ruling, while appealing the fee award to the Ninth Circuit. The players filed in March for a Supreme Court review of the partial reversal after being denied an en banc rehearing in the Ninth Circuit.

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