The Beginning Of The End Comment Count

Brian

 Brian Spurlock-USA TODAY Sports<br />
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The O'Bannon decision came down at six o'clock on a Friday, irritating all the journalists who suddenly had 1/3 less weekend… and sort of obliterating the NCAA.

The "sort of" part: the injunction the decision delivers doesn't radically upset the system. It prevents the NCAA from enforcing a couple of rules. The upshot is that schools can at least offer:

  1. full cost of attendance scholarships, and
  2. 5k per year from NIL rights placed in a trust that players get after their eligibility expire.

That'll add up to something in the 8k range annually for football and basketball players. It's the "at least" that's interesting. Instead of an arbitrary cap on compensation we now have an arbitrary floor. In a world where Indiana State gets to tell Michigan what to do you could be certain that compensation would be set to the minimum. But with the new autonomy structure, you might see the Big 5 go bigger.

If they do that's something that will be driven by the lower end, and primarily by basketball. Rutgers and Northwestern need all the help they can get; Michigan State is more concerned about recruiting against teams that are their equal in terms of compensation they can offer athletes.

The NCAA's autonomy structure is set up such that a UConn could choose to adopt whatever extra expenses the Power 5 did, so they would not be doomed as long as they could afford to keep up.

But even if it's not the floor, it's still not that different. Same structure, with a not-particularly-significant amount of the revenue directed to the athletes.

The "obliterating" part: Judge Wilken rejected every argument the NCAA made.

In her 99-page opinion, Wilken decreed that the NCAA's longstanding ban on compensating athletes for use of their name, image and likeness violates antitrust law. That alone was a victory for the plaintiffs, five years in the making. But more than that, Wilken repeatedly and unambiguously struck down virtually every argument the NCAA made in court in defense of the traditional collegiate model.

Well, except one. Bizarrely, it was the worst one:

Wilken sided with the NCAA on just one major issue. She empathized with the organization's mission to prevent commercial exploitation of athletes and thus denied an attempt to allow product endorsements.

The idea that getting paid for something is being exploited is the deepest weirdness the NCAA's structure has imposed on the world, and for that to come through this case unscathed is so so weird.

Other than that, though, the NCAA went 0-fer, and if they got off light it was only because the plaintiffs weren't asking for the world:

Wilken was never going to drop a nuclear bomb that completely professionalized college athletes, because that was never the scope of the case. The plaintiffs had focused specifically on athletes' rights to a share of licensing revenue derived from their appearances in television broadcast and video games.

There are cases that are are still upcoming, and now they have a court case that says they're in the right. Rutgers law professor Michael Carrier:

“There is lots of litigation going on and this is something plaintiffs can use in every case now. You have a comprehensive opinion that thoroughly looks at the justifications and thoroughly strikes them down. The NCAA may disagree, but the default position now is the NCAA does not have its amateurism defense position to stand behind.”

Bomb's gone off, and now we're waiting for the shock wave.

So now what?

Appeals that probably won't change much other than some numbers. ESPN's Lester Munson sums up the NCAA's position here:

As accurate and as obvious as her ruling seems to be, the NCAA cannot accept it. It must appeal the ruling to preserve even a slim chance in the other antitrust cases the NCAA faces, and it must persist in its claim that its rules are reasonable and legal.

A hopeless rearguard action.

Comments

grumbler

August 12th, 2014 at 2:54 PM ^

This ruling obliterated the NCAA like the Polish cavalry charges obliterated the panzers.

The NCAA basically has to stop allowing tennis players to be considered amateurs if they collect $10,000 in prizes or less before college, and their amateurism claim is good.  That's it.  Seems an easy fix.

I think this ruling is a win for the NCAA, and that they will only appeal as part of their strategy in dealing with the other cases facing them.

matthewjwilk

August 12th, 2014 at 3:32 PM ^

Attorney here.

Antitrust suits are generally different from other civil litigation--findings of fact aren't quite as binding on the appelate courts. Antitrust suits are often completely reversed (facts and law) when the appelate court looks at them. 

Remember, the District Court ruled that Microsoft had to be broken up. It's not how that case ultimately turned out. The appeals court reversed virtually every finding.

There were two interesting issues where the lawyers at trial basically ignored the DC judge and made the argument that might be persuasive to the appeals court: standing (these kids don't play for the NCAA, they play for an individual school) and monopoly/monopsony (is there one seller, or one buyer). The lawyers knew they were going to lose at the DC level and appeal even before the trial got going.

One other nuance--while the NCAA cannot (stay pending appeal notwithstanding) prevent schools and conferences from doing certain things, most conferences have rules that are similar to the NCAA. So unless each conference agrees and changes its rules, nothing will change, unless you are ND or BYU.

grumbler

August 12th, 2014 at 6:55 PM ^

I cannot imagine that conferences currently have different rules on player compensation than the NCAA, and suspect that, if they do have any rules, they just say that the NCAA's determination is applicable.

I agree that an appeal was always in the cards here, but the rulings in the case are the record at the moment, and getting an appeals court to overturn the record is a far heavier burden than supporting the record.

I don't see any reason for either side to press for a quick appeal hearing.  This decision doesn't hurt either of them in any significant way.

Ed Shuttlesworth

August 12th, 2014 at 6:01 PM ^

Agreed that this wasn't that big a loss for the NCAA.  They can still conspire to set NIL comp, just with a floor of $5,000, rather than $0.  Not that big a deal.

If all that happens as a result of all this litigation is that Power 5 football players get a check for $20K when their eligibility is over, that's a massive snore -- regardless of how badly the judge "obliterated" the NCAA's arguments.

The big case is the Kessler-driven one where schools' ablitly to price fix comp at scholarship-plus will be tested.  I actually don't think the NCAA will lose that one.

mgoblue98

August 12th, 2014 at 11:53 PM ^

Neither the NCAA nor anyone else should be able to use the athlete's likeness, etc., without their permission and without compensating them properly.  The players should be able to negotiate contracts similar to what Tom Brady or any other person would for the use of their likeness. 

As far as more compensation goes, the laws of unintended consequences may apply.  The money required for further conpensating players will likely come from the student body in the form of higher tuition and higher mandatory fees or higher ticket prices, neither of which seems like a good option.  Arizona State just leveed a mandatory $150 a year athletic fee on every student.

I am also curious to see what implications this ruling and future rulings (if they go against the NCAA) will have on Title IX. 

bleu

August 13th, 2014 at 7:33 AM ^

If this is the beginning of the end, what's the end? What will college sports look like post-NCAA for both revenue and nonrevenue sports?

Autostocks

August 13th, 2014 at 8:39 AM ^

Great opinion piece in the WSJ Monday by Dave Revsine (including Michigan reference).  Here's a link, although it's paywalled:

http://online.wsj.com/articles/dave-revsine-obannon-v-ncaanow-thats-old…

Bottom line is pay for athletes is not a new issue at all, having been debated for over 100 years.  This is just a new chapter.  My prediction is we will get through this with no significant changes to intercollegiate athletics, and amateurism being preserved in a broad sense of the word.