Ninth Circuit Rules on NCAA’s Appeal in O’Bannon

September 30, 2015

By: Paul J. Avery

On September 30, 2015, the United States Court of Appeals for the Ninth Circuit issued its highly anticipated opinion on the NCAA’s appeal of the District Court’s decision in the O’Bannon case (a summary of the District Court’s decision is available here). After a lengthy discussion in which the Ninth Circuit ruled that the NCAA’s compensation rules are subject to scrutiny under antitrust laws, the Ninth Circuit affirmed in part and reversed in part the District Court’s decision. The Ninth Circuit upheld that part of the District Court’s ruling which enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance. The Ninth Circuit reasoned that this constituted a substantially less restrictive alternative to the NCAA’s current compensation rules because this would have virtually no impact on amateurism. The Ninth Circuit disagreed, however, with that part of the District Court’s decision which would have required the NCAA to permit member institutions to pay deferred compensation to student-athletes in an amount up to $5,000 per year for the use of their names, images and likenesses. The Ninth Circuit was particularly critical of the District Court’s decision here, noting that the District Court ignored the fact that not compensating student-athletes is precisely what renders them amateurs. As a result of the Ninth Circuit’s ruling, member institutions may provide FBS football and Division I basketball recruits with grants-in-aid up to the full cost of attendance, but remain prohibited by NCAA rules from providing the $5,000 per year deferred compensation contemplated by the District Court’s decision. A more detailed summary of the Ninth Circuit’s decision will be published on Bond’s Higher Education Law Report in the coming days.