Court Strikes Down Payments to College AthletesSeptember 30, 2015
http://www.nytimes.com/2015/10/01/sports/obannon-ncaa-case-court-of-appeals-ruling.html?smid=tw-nytimes&smtyp=curThe N.C.A.A. may restrict colleges from compensating athletes beyond the cost of attendance, a three-judge panel of the United States Court of Appeals for the Ninth Circuit ruled Wednesday in an apparent victory for the college sports establishment as it fights efforts to expand athletes’ rights.
As college football and, to a lesser extent, men’s basketball have generated millions of dollars in revenue through television broadcast deals and merchandise sales, some critics, including former and current athletes, have lobbied for greater financial compensation. The appeals court bluntly said that limiting compensation to the cost of attendance in exchange for use of the players’ names, images and likenesses was sufficient under antitrust law.
The cost of attendance, typically several thousand dollars more than a traditional scholarship, accounts for the financial demands of additional activities like traveling home and back and paying cellphone bills. In January, the five most prominent football conferences voted to allow colleges to provide the higher figure to athletes.
The N.C.A.A. may restrict colleges from compensating athletes beyond the cost of attendance, a three-judge panel of the United States Court of Appeals for the Ninth Circuit ruled Wednesday in an apparent victory for the college sports establishment as it fights efforts to expand athletes’ rights.
As college football and, to a lesser extent, men’s basketball have generated millions of dollars in revenue through television broadcast deals and merchandise sales, some critics, including former and current athletes, have lobbied for greater financial compensation. The appeals court bluntly said that limiting compensation to the cost of attendance in exchange for use of the players’ names, images and likenesses was sufficient under antitrust law.
The cost of attendance, typically several thousand dollars more than a traditional scholarship, accounts for the financial demands of additional activities like traveling home and back and paying cellphone bills. In January, the five most prominent football conferences voted to allow colleges to provide the higher figure to athletes.
In essence, the Ninth Circuit on Wednesday upheld Judge Claudia Wilken’s finding that preserving amateurism was not by itself enough to keep N.C.A.A. rules on compensation exempt from antitrust law.
“They specifically went in and said the N.C.A.A. violated antitrust law,” said Sonny Vaccaro, a longtime N.C.A.A. critic who helped start the O’Bannon lawsuit. “That opens things up, and it’s tremendous.”
Mr. O’Bannon’s lawyer, Michael Hausfeld, added that the ruling also explicitly tied athletics to academics more strongly.
“What has prevailed for the last century can no longer continue,” he said. “Athletes are going to be have to be given more freedom, and the schools are going to have to exercise more responsibility over their academic experience.”
The case, although legally a dispute over antitrust law, has come to embody a broader debate about whether college athletes, who ostensibly pursue sports as part of their education, should be compensated for labors that are highly lucrative for their colleges, their conferences and the N.C.A.A.
The decision, along with N.C.A.A. changes, in part prompted by and aimed at heading off lawsuits like this one, has prompted many colleges that field teams in the top football conferences and in Division I men’s basketball to begin setting aside more money to compensate athletes. Those payments potentially raise new questions about competitive balance in college sports, Title IX rules relating to women’s sports, and athletic departments’ bottom lines.
The tide has generally turned toward the expansion of athletes’ rights, although the N.C.A.A. and colleges still insist that their athletes are amateurs and students first.
In August, the N.C.A.A. and the college sports establishment won another victory when the National Labor Relations Board overturned a regional director’s finding that Northwestern football players were employees who could unionize under federal labor law.
Two cases, which have been coordinated and have a class certification hearing on Thursday before Judge Wilken, seek an injunction against N.C.A.A. rules banning compensation.
One of those cases, led by the lawyer Jeffrey Kessler, essentially seeks a free market for athletes in top football and Division I men’s basketball programs. (Mr. Kessler was unavailable to comment Wednesday on the Ninth Circuit’s ruling.) That case is expected to be remanded to a Federal District Court in New Jersey, where, in turn, any eventual appeal would go to a different circuit court.
At a basic level, Wednesday’s Ninth Circuit ruling should give such a case hope; an alternative would have been to find that, as the N.C.A.A. insisted, rules restricting compensation were justified under antitrust law.
The other case seeks, among other things, damages for past compensation that athletes were denied before the N.C.A.A. approved the full-cost-of-attendance model.
“It’s very helpful in some respects,” said Steve Berman, a lawyer for the plaintiffs in that case.
“Given this precedent,” Mr. Berman added, “we might be entitled to summary judgment on the damages.”
The question, he said, is whether Wednesday’s ruling precludes athletes from seeking compensation above the full cost of attendance.
“There’s a footnote that says the record on why $5,000 was appropriate was not fully developed,” Mr. Berman said. “We’re going to try to fully develop the record to establish that the conferences could compete and pay student-athletes without interfering with amateurism.”
He added: “Where the fight’s going to be is, are we foreclosed by this ruling for seeking anything above the cost of attendance? That’s the battleground.”
On the N.C.A.A.’s conference call, the Big 12 commissioner, Bob Bowlsby, echoed Mr. Emmert’s satisfaction with the heart of the decision.
“This provides some level of uncertainty, but also a welcome level of certainty,” Mr. Bowlsby said, adding, “In the main, I believe this has affirmed the amateur status of collegiate athletes.”
Mr. Emmert, too, said he hoped the ruling would provide clarity to N.C.A.A. universities and help deter future legal challenges.
Each side will have 14 days to request a rehearing in front of the full Ninth Circuit, or 90 days to appeal to the Supreme Court. Mr. Hausfeld said he was weighing his options, and the N.C.A.A.’s chief legal officer, Donald Remy, said his organization was doing the same.
