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Miller: Explaining the O’Bannon v. NCAA Ruling

As I articulated in my column last week, I will be using this space for the next several weeks to address the O’Bannon v. NCAA ruling, which was handed down by U.S. District Court Judge Claudia Wilken ‘71 earlier this summer.

Let’s start with the basics: What was the O’Bannon lawsuit all about in the first place? Why did Ed O’Bannon — a former UCLA basketball player who played nearly 10 years professionally — file this suit back in the summer of 2009? In three words: money and power. (And what lawsuit isn’t about one of those pursuits?)

O’Bannon’s original complaint alleges an antitrust violation based on the premise that current and former NCAA men’s basketball and Division I-A football (FBS) players should be allowed to sell the rights to their name, image and likeness (NIL) to the NCAA, its licensing division and outside entities including television and other media networks.

The NCAA, up until this point, has strictly forbidden players to bargain in this manner, because, in its view, such activity would destroy the age-old but nonetheless malleable system of amateurism.

The plaintiffs (O’Bannon and “all others similarly situated”), represented by renowned civil attorney Michael Hausfeld, argue that “the NCAA has unreasonably and illegally restrained trade in order to commercially exploit former student-athletes subject to its control, with such exploitation affecting those individuals well into their post-collegiate lives.”

O’Bannon asserts that in a licensing market devoid of cumbersome and illegal (per the Sherman Antitrust Act) NCAA regulations, groups of players would be free to and would indeed sell the rights to their name, image and likeness to their institution, conference and other media and licensing organizations.

These predicted transactions would compensate collegiate athletes for the use of their name, image and/or likeness in a wide range of media, including television broadcasts and advertisements. In this manner, a pay-for-appearance system would be created, rather than a pay-for-play model.

The NCAA, however, forbids any such transaction occurring from the moment an athlete sets foot on a member institution’s campus. According to the original complaint and from my own personal experience as a collegiate athlete, “The NCAA accomplishes this unreasonable restraint of trade in part by requiring all student-athletes to sign a form each year…that purports to require each of them to relinquish all rights in perpetuity to the commercial use of their images, including after they graduate and are no longer subject to NCAA regulations.”

These rights are then appropriated by the NCAA and its member institutions, then resold to third-party groups, the largest of which are major television networks like CBS, ABC and ESPN.

Although no one is holding a gun to an athlete’s head and saying, “You WILL sign this form,” the fact is that it’s either sign or become immediately (and possibly permanently) ineligible for collegiate competition. Is it really a “choice” at that point? The answer is “no,” and the NCAA knows that full well. It’s not as if high-level men’s basketball and football athletes can consider lower NCAA divisions or other intercollegiate athletics associations as viable options, because the NCAA holds a monopoly on high-exposure athletic contests.

It really is a no-win situation for athletes: Sign yourself away, or be forever barred from collegiate athletics.

This process of coercing athletes to sign away their rightful profit from the use of their name, image or likeness is particularly sinister, insofar as it forces an individual to choose between their passion and their earning potential. As Judge Wilken’s ruling demonstrated, the two can be achieved harmoniously — an assertion NCAA President Mark Emmert and his cadre of good-ol’-boy yes-men will embrace unto perpetuity.

In summary, the O’Bannon lawsuit claimed — correctly — that the NCAA’s rules against the compensation of athletes for the use of and rights to their name, image and likeness violated the Sherman Antitrust Act of 1890. (Could the enactors have ever dreamed of such an application of the statutes?) The plaintiffs asserted the NCAA bylaws in question were, essentially, anti-competitive, because they completely blocked an entire group of individuals from an economic market — in this case, the collegiate licensing market.

The bottom line is that sans the NCAA’s blatantly illegal restrictions, collegiate athletes would be free to negotiate with their schools and third parties for the use of their names, images and likenesses — negotiations that would be extremely lucrative for the producers (the athletes).

Now that we know why O’Bannon filed suit, we can jump right in to Judge Wilken’s ruling. More on that next week.

Cameron Miller hates only two things in life: sunshine and Mark Emmert.  To find out why, contact Cameron Miller at cmiller6 ‘at’ stanford.edu.

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Cameron Miller

Cameron Miller

Cameron Miller is a sports desk editor for The Stanford Daily's Vol. 246 and is the men's and women's golf writer. He also writes on NCAA-related matters. Cameron is also a Stanford student-athlete, competing on the cross country and track and field teams. He is originally from Bakersfield, California, but spends most of his time away from the Farm on the state's Central Coast. Contact him at cmiller6@stanford.edu.