This month the legal field will focus on Supreme Court cases dealing with controversial topics such as same-sex marriage, diversity in college admissions, and the Voting Rights Act. However, the sports world will turn its attention to an antitrust suit filed by 1995 NCAA tourney Most Outstanding Player, Ed O’Bannon.
The case of O’Bannon v. NCAA has been working its way through the courts since 2009, and we will soon learn whether it will become a class-action suit that could take a big chunk of money out of the pockets of the NCAA. The plaintiffs argue that if the NCAA wants to use the names and/or images of its Division 1 athletes for licensing or marketing purposes, then it must share some of the profits with them.
If a judge rules that a class-action suit is proper, then it could very well have a huge impact on everything from broadcast rights to recruiting to coaching salaries. Lead plaintiffs’ attorney Michael Hausfeld has worked on a host of historic lawsuits: Native Alaskans who were affected by the Exxon Valdez oil spill, a $176 million settlement with Texaco, and Holocaust victims whose assets were seized during WWII. Jon Teitel got to sit down face-to-face with Mr. Hausfeld in his law office to discuss the legal claims, the tangible ramifications, and the impact of this possible landmark case.
You are the attorney for Ed O’Bannon in his lawsuit against the NCAA, how did the lawsuit arise, and why did Hall of Famers Oscar Robertson and Bill Russell eventually decide to participate? A number of people brought the issue to my attention and the parties ended up contacting me. We looked into the issue and there appeared to be some violations of the law.
The lawsuit concerns the money that the NCAA has made off of players in the form of video game rights and the use of images for ticket sales and TV contracts. How much money is at issue? We are talking about annual revenue of billions of dollars. Our lawsuit concerns the money that comes from the licensing of the name, image and likeness of college athletes, rather than from the sale of items such as jerseys or bobblehead dolls.
“Student-athletes” gets scholarship money for tuition, room and board, but nothing for travel, clothing, medical expenses. Why is this “free education” insufficient to fairly compensate them? A large number of D-1 athletes are walk-ons rather than on scholarship. Additionally, D-2 and D-3 athletes are not covered by the traditional definition of “student-athlete”. The statistics compiled by scholars of academics and sports illustrate that athletes do not receive the same education when you look at graduation rate and career development. Athletes cannot receive the same quality of education as other students due to a variety of factors: the type of courses they are offered, the demands placed on their time, their compulsory attendance at games and practices, etc. When you are required to play at night so that your games can be show in prime-time on both coasts, it affects your grades and cuts into your exam period.
Your expert economists have suggested that the players deserve a 50% share of TV money and a 33% share of video game money. Is it proper to compare college money to the revenue sharing for professional players, and if so, how similar are the two groups? There is no difference between college and professionals: they are two defined products who play the same sport. The football people got together a long time ago and agreed that college football would get Saturdays and the NFL would get Sundays. However, there is a difference in the revenue that is generated, which can then be applied to calculate the difference in the likeness value.
If the NCAA were to agree to share some revenue, would you suggest different shares based on a variety of different factors (current vs. former athletes, basketball vs. other sports, stars vs. scrubs, men vs. women, BCS schools vs. low-mid majors, etc.)? Our current focus is on D-1 basketball and football. To keep from upsetting any competitive balance, our view is that revenue is created by the entirety of the athletes on a team. A company like the Big 10 Network or Pac-12 Network is purchasing the rights to televise games featuring every team in that conference. Consequently, there is an equal share in the interest generated by every single player in that conference.
Would you prefer paying players now (such as a $2000 stipend) or holding the money in trust until their college careers are over? The tortured stipend proposal is in flux and has not passed due to a divergence between the haves and the have-nots, which is just camouflage for exploitation. There is already a huge gap between the two groups and the have-nots do not want to increase that gap. According to the NCAA, schools never release the rights to a player’s likeness and the players never acquire those rights. I think it makes sense to hold the money in trust for at least a portion of time.
Do you think that paying players would make a noticeable dent in relation to all the recent financial scandals in college football (Cam Newton, Reggie Bush, Terrelle Pryor, University of Miami football, etc.)? No. Scandals are different. It is important to cut out excess and abuse (like a Miami booster running wild) but that has nothing to do with our proposal. We simply want to compensate players for their fair share that is paid by broadcasters for the use of a player’s name, image or likeness (as opposed to their performance). Broadcast contracts in all other contexts warrant the issuance of similar rights to the licensee. A deferred compensation model is not equivalent to someone getting paid right now due to immediate financial exigency.
If a player gets a sports-related injury, do you think he deserves to receive workers’ compensation? That one is easy, since athletes are not “workers”, they are not entitled to workers’ compensation.
Do you think players would deserve to get paid even if CBS were not paying almost $1 billion per year to broadcast the NCAA tourney and coaches like Kentucky’s John Calipari were not making over $4 million per year to win national titles? The exploitation issue is a direct result of the pressures caused by the professionalization of college athletics. The concept of amateurism states that sports are an avocation secondary to education. That might have been the case a century ago, but just look at all the advances in the college game today: scouting, recruiting, equipment, training, etc. A New York Times article from a few years ago clearly stated the philosophy of most coaches and athletic directors: WIN! There is a huge conflict between avocation and education, you cannot emphasize winning while at the same time diminishing learning.
If the case goes to trial in California it would be scheduled for June 2014, what is the key to proving your case? The key is to marshal all of the evidence: emails, correspondence, strategic plans, and depositions regarding everything mentioned above.
ED NOTE: In order to get both sides of the story, Jon also reached out to the NCAA for an interview. NCAA Director of Public and Media Relations Erik Christianson responded, “We have a number of resources online related to the lawsuit that I encourage you to review” and directed me to the following link for more information: