College Athletics

Ninth Circuit Orders Stay in O’Bannon Case

August 3, 2015

By Paul J. Avery

On July 31, 2015, the United States Court of Appeals for the Ninth Circuit granted the NCAA’s request to stay the injunctions ordered by the District Court in the O’Bannon v. NCAA case. In August 2014, the District Court enjoined the NCAA from enforcing its rules that prohibited member schools and conferences from offering FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses and from offering to deposit a limited share of licensing revenue in trust for such student-athletes. As a result of the stay, the NCAA’s current rules may continue to be enforced until such time as the Ninth Circuit rules on the NCAA’s appeal of the District Court’s decision.

Bond Attorneys Author Article on O’Bannon Case

October 14, 2014

By Paul J. Avery

Bond attorneys Mike Glazier and Paul Avery authored an article discussing the United States District Court for the Northern District of California’s decision in O’Bannon v. NCAA which was published on October 6, 2014 as a NACUANOTE by the National Association of College and University Attorneys.  The article, entitled O’Bannon v. NCAA: The District Court Decision, can be viewed here.

NCAA to Appeal O’Bannon Decision

August 25, 2014

By Philip J. Zaccheo

Last Thursday, the NCAA announced that it had filed a notice of appeal of Judge Claudia Wilken’s August 8, 2014 decision in O'Bannon v. National Collegiate Athletic Association et al.  The appeal was widely anticipated as the decision has been broadly viewed as a major setback for the NCAA.  Although this is certainly true insofar as the court concluded that current NCAA rules represent a violation of federal antitrust law, the decision actually somewhat measured and contained some content beneficial to the NCAA, including (a) an acknowledgement of the NCAA’s interest in limiting payments to student-athletes while enrolled in order to promote the educational goal of integrating student-athletes into their respective campus communities, (b) an acknowledgement that limiting payments to student-athletes might help the NCAA maintain viewer interest in, and demand for, broadcasts of intercollegiate athletic contests, (c) an acknowledgement that permitting student-athletes to endorse commercial products would undermine the NCAA’s goal of preventing commercial exploitation of student-athletes, and (d) authorization for the NCAA to cap the amount of compensation paid by institutions to student-athletes for use of their likenesses.  These aspects of the O’Bannon decision could be helpful to the NCAA, among other things in the context of Jenkins et al. v. National Collegiate Athletic Association et al. (the so-called Kessler litigation), in which the plaintiffs are expected to argue that the NCAA cannot limit student-athlete compensation at the cost of attendance.  As a result, the NCAA’s decision to appeal is, on some level, interesting from a strategic standpoint. In announcing its appeal, the NCAA made specific reference to a passage in Judge Wilken’s decision suggesting that reform of NCAA principles governing student-athlete compensation would be best achieved outside the courtroom.  It is possible that discussion of such reforms may occur against the backdrop of the NCAA’s appeal and in advance of the decision becoming effective for the 2015-2016 academic year, though the pendency of Jenkins and other litigation will necessarily pose challenges in this regard.

Court Rules Against NCAA in O’Bannon Case

August 12, 2014

By Paul J. Avery

The United States District Court for the Northern District of California issued its highly anticipated decision in the Ed O’Bannon case on August 8, 2014.  The Court ruled in favor of the plaintiffs, a class consisting of current and former college student-athletes who filed suit in 2009, concluding that the NCAA’s rules which prohibit payment to student-athletes are an unreasonable restraint on trade, and thus violate federal antitrust law.  In so finding, the Court issued injunctions prohibiting the NCAA from enforcing certain of its rules:

 …the Court will enjoin the NCAA from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses in addition to a full grant-in-aid. The injunction will not preclude the NCAA from implementing rules capping the amount of compensation that may be paid to student-athletes while they are enrolled in school; however, the NCAA will not be permitted to set this cap below the cost of attendance…

 The injunction will also prohibit the NCAA from enforcing any rules to prevent its member schools and conferences from offering to deposit a limited share of licensing revenue in trust for their FBS football and Division I basketball recruits, payable when they leave school or their eligibility expires. Although the injunction will permit the NCAA to set a cap on the amount of money that may be held in trust, it will prohibit the NCAA from setting a cap of less than five thousand dollars (in 2014 dollars) for every year that the student-athlete remains academically eligible to compete.

Notably, the injunction does not preclude the NCAA from continuing to enforce its other existing rules, including those prohibiting student-athletes from endorsing commercial products. The Court’s decision, which came one day after the NCAA voted to afford schools in its major conferences additional autonomy to, among other things, increase the value of scholarships, will not affect prospective student-athletes who enroll prior to July 1, 2016.  Yesterday, the NCAA filed a request with the Court seeking clarification regarding the effective date.  The NCAA has announced that it will appeal the decision. Among the multitude of questions raised by this decision are (1) the likelihood and prospects of future antitrust challenges against the NCAA’s other amateurism based rules, (2) how the potential compensation of student-athletes will impact recruiting and competitive balance in college athletics, (3) how any significant compensation of student-athletes will impact athletic department and non-revenue generating sports’ budgets and, potentially, threaten the continued existence of non-revenue generating sports, and (4) the Title IX and other regulatory impact of any resulting changes in athletic department offerings.  Only time will tell how these and others specific questions stemming from this decision will be answered, but at this point it is clear that the game has changed for the NCAA and its longstanding principles of amateurism.