NCAA Appeals Ruling on Compensation for Student-Athletes

By on November 19, 2014

On November 14, 2014, the National Collegiate Athletic Association (NCAA) submitted its initial brief to the Ninth Circuit Court of Appeals challenging the Northern District of California’s August decision that the NCAA’s rules banning student-athletes for being compensated for the use of their names, images and likenesses violated antitrust laws.  O’Bannon v. National Collegiate Athletic Association, et al., case number 14-16601.  The NCAA argued that these rules do not violate the Sherman Act because of the Supreme Court’s decision in NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984).  In that case, the Supreme Court determined that rules aimed at protecting the amateurism of college athletes, such as bans on paying students to play, were not prohibited by the antitrust laws.  The NCAA contended that rules banning compensation for student-athletes’ likenesses are the same as the prohibitions on being paid to play, and therefore, should be allowed under the Supreme Court’s amateurism precedent.  In addition, the NCAA argued that plaintiffs lack antitrust standing because publicity rights in television broadcasts of games are not recognized by states.  Further, the association claimed that its rules do not involve a commercial activity, so the Sherman Act should not apply.

This case originated in 2009 when two former NCAA student-athletes filed class action suits against the NCAA, Electronic Arts, Inc. and Collegiate Licensing Co., alleging that these organizations profited from student-athlete likenesses on television, in video games and on merchandise while prohibiting the athletes from receiving payment.  After a three-week bench trial in the summer, District Judge Wilken entered an injunction against the NCAA after determining that without the NCAA rules, Division I basketball and Football Bowl Subdivision schools would compete for recruits’ athletic talents and licensing rights as well as compete to offer athletic and educational opportunities for students.  The NCAA previously settled with plaintiffs for $20 million over the use of students’ likenesses in video games, and Electronic Arts and Collegiate Licensing also reached a settlement with both plaintiff groups for $40 million.





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