$40 Million Settlement - Video Games

Submitted by TruBluMich on

http://espn.go.com/espn/otl/story/_/id/11010455/college-athletes-reach-40-million-settlement-ea-sports-ncaa-licensing-arm

College football and basketball players have finalized a $40 million settlement with a video game manufacturer and the NCAA's licensing arm for improperly using the likenesses of athletes, leaving the NCAA alone to defend itself in the upcoming Ed O'Bannon antitrust trial.
In the end, according to the agreement, 77 percent of the funds that are due to players (after lawyer fees) will go to the class of players represented by Berman, who sued the NCAA on behalf of former Arizona quarterback Sam Keller. Just over 12 percent will go to players in the class represented by O'Bannon, the former UCLA basketball star. The final 10 percent will go to the class represented by former Rutgers football player Ryan Hart and former West Virginia football player Shawne Alston.

Additionally, O'Bannon, Keller, Hart and the other named plaintiffs would receive payments of $2,500 to $15,000 for their time and efforts in representing the classes.

If the settlement is approved by U.S. District Court Judge Claudia Wilken, the lawyers will receive up to one-third of the settlement funds, or $13.2 million, plus a maximum of $2.5 million in legal fees that they argue is "particularly reasonable in light of the advanced stage of this case." They state that the collective lodestar, or total amount of legal services expended, by the various plaintiffs' firms that have worked on the Keller, O'Bannon and Hart-Alston cases exceeds $30 million, plus expenses of $4 million.

Michigan Related BOMBSHELL:

In June 2013, former University of Michigan president James Duderstadt wrote that "(in) a sense, the NCAA's objective is to preserve the brand so that it provides revenue primarily for a small number of people who get very, very rich on the exploitation of young students who really lose opportunities for their futures. ... And that's what's corrupt about it. The regulations are designed to protect the brand, to protect the playing level and keep it exciting, not to protect the student athletes."

the Glove

May 31st, 2014 at 2:10 AM ^

Maybe I'm taking this the wrong way, but by taking the settlement it proves to me that they really didn't care about players likenesses being "abused". That they were just selfishly worried about lining their own pockets.

I Like Burgers

May 31st, 2014 at 10:11 AM ^

You're taking this the wrong way.  The lawsuit was over player's likenesses being "abused" and the players not being compensated for that.  As reparations for that, they wanted to be retroactively compensated.  So by taking the settlement, they achieved both goals.

Also, the goal of the lawsuit was never to completely blow up the NCAA model.  One lawsuit alone can't do that.  But it was certainly the first salvo in several lawsuits that will eventually change the NCAA model.

If you want to be pissed at someone, be pissed at the NCAA and school presidents for raking in all of this extra money over the last decade or so and never thinking of the long term consequences of that.  After signing giant new TV deals, they could have said, hey we're going to pass some of this on to the players through full cost of attendance scholarships or something like that.  But for a variety of reasons (mainly greed) the did nothing, and as a result created this monster and backed themselves into a corner where the only option is to blow the whole thing up.

bronxblue

May 31st, 2014 at 12:53 PM ^

They took the settlement because it makes the most sense for the class.  While one or two parties in the class, like the O'Bannon's, would probably be fine with continuing on with litigation, being part of a class action means the goals of the whole class take precedent, and there can be a decision made by that group to settle and move on.

mgoblueben

May 31st, 2014 at 2:13 AM ^

When I was younger I would have done anything to be in a video game and would have been honored that it had my likeness.  So I guess after all this a few players get some cash and everyone loses.  Groundbreaking for players, sure, but the more and more this becomes a business I'd guess you continue to see attendances fall and the support of college football and basketball decline.  That's why I think pro sports lost it's appeal to me when I got older. Just my opinion but it is just a game and it's supposed to be competitive but still fun. 

I Wrote a 4 Wo…

May 31st, 2014 at 9:00 AM ^

I really have a strong desire to punch Ed O'Bannon right in his mouth. Ruined college video games for the sake of probably $200 per player listed as a defendant.



It's a bummer that, yeah, other sports will not be able to exist. And it's a bummer that the only "winners" are former college stars who couldn't cut it in the pros, for what is hopefully chump change for them.

Voltron Blue

May 31st, 2014 at 10:18 AM ^

I hear you, man. I can't believe that he and thousands of other athletes wouldn't agree to continue to have their likenesses exploited so that other people could get rich and you could enjoy playing a video game!! Those selfish bastards! Ed, think about the kids and their desire to play video games before you go and worry about your well-being or health next time, prick.

Kilgore Trout

May 31st, 2014 at 9:06 AM ^

Should NFL players take less or no money so there can be a professional field hockey or wrestling league with world class facilities?



Should petroleum engineers take less or no money so people can have top flight resources to study ancient languages?



Maybe your answer is yes, but that dives into a whole mess of off limit topics.

bronxblue

May 31st, 2014 at 1:01 PM ^

This isn't really the argument, is it?  The better question would be should NFL players not get paid for sales of their likeness so that Roger Goddell and the head of PR for the Browns can get paid a bit more.  

SWPro

May 31st, 2014 at 11:02 AM ^

Can you point to anything that shows all these schools that are making 100M+ in profits?

 

http://www.usatoday.com/story/sports/college/2013/05/07/ncaa-finances-s…

 

Based on the 2011-12 information in the link above only 23 schools turned a profit. And the largerst amount was 32M.

 

I mean realistically I should be all for this as Michigan is up at the top of that list and will likely funneling money into "buying" recruits. I just don't really think I want to see this in college football.

 

I would much prefer the NFL remove its draft rule and all anyone who wants to enter at 18.

 

I would rather see the top 15-20 (hell the top 200) members of each recruiting class go to the NFL directly that see the college ranks turn professional.

I Like Burgers

May 31st, 2014 at 11:12 AM ^

I didn't say all schools make $100M, just some. But a lot of them in the power five are bringing in an awful lot of money from their own networks and from the TV contracts. How much "profit" they make is highly dependent on what kind of accounting trickery they want to use.



Either way, the fact remains these schools were generating fractions of the money they were a decade or more ago and they were doing just fine finding a way to support multiple sports. And while revenues have increased by multiples of ten or more, I haven't seen a huge uptick in the number of sports added. So the crying poor argument doesn't hold up.



And for better or worse, letting 18 year old kids into the NFL would be an awful idea. Just look at the NBA as an example of how the quality of play gets watered down when you get dozens of kids every year entering the league relying on little more than a year of college coaching and whatever nonsense their AAU or HS coach taught them. If they taught them anything at all.

SWPro

June 4th, 2014 at 8:50 PM ^

Most of the schools under discussion are public schools so if they were actually making $100M+ there would be someone demonstrating the accounting trickery you are referring to. At the very least it would be coming out in the multiple trials that have been going on.

 

I didn't say you said all of the schools are making $100M+ I asked you to list the ones that are. I've looked and the best I can find was a $32M profit by A&M and about 15-20 schools turning a profit depending on the year. I'm not saying your are wrong but if I am wrong I want to have the resource to know it.

 

The simple matter is that the money given to players (and I am not against things like 4 year scholarships and health care) HAS to come form somewhere. I agree that schools are spending a lot more on things like facilities and sending coaches out for recruiting in the revenue sports but these are largely regarded as the cost of doing business.

 

Football brings in money -> spend money on football to keep up recruiting -> put a better team on the field -> football brings in more money.

 

Its easy to say "well they shouldn't build that new weight room" but that weight room is going to bring in recruits/coaches who are going to help you win which will in turn generate revenue for your atheletic departmart.

Dale

May 31st, 2014 at 5:07 PM ^

I think this is the key.  Profits are irrelevant because the people running athletic departments don't have a profit incentive. They have an incentive to earn as much revenue as possible and then spend it on salaries. In the long run, athletic departments won't earn a profit. That doesn't mean they don't earn revenue that could be spent on athletes instead of coach bonuses and jumbotrons. 

 

bronxblue

May 31st, 2014 at 12:57 PM ^

But the thing is, you never played high-end ball.  You never had to sacrifice years of your life, your health, your time, etc. for the sport.  It's always easy to be a fan, because the relationship can be as involved as you want it to be.  But these kids were the ones on that field, making it enjoyable for you.  If they don't feel they are being treated properly, they are within their right to address those grievances.  And before anyone says "then don't play college sports", that's a weak argument that flies in the face of numerous other catalysts for change in this country and beyond.  Jackie Robinson didn't have to break the color barrier, the US didn't "have" to go into space, same-sex couples don't need to marry.  I'm not trying to make this political, and I absolutely understand that players getting paid for their likeness doesn't rise to this level of national or historic relevance, but sometimes the people most intimately involved in the issue have to be the ones that initiate the change, even if they technically have the option to not be involved.

ThadMattasagoblin

May 31st, 2014 at 3:37 AM ^

I think players should receive a portion of money from the sale of their jerseys and video games however I am opposed to paying them. They already get it better than 99.9 percent of the student body. They get free room/board, gym membership, food/dining halls, nutritionists, strength coaches, tutors. All of this stuff would cost thousands of dollars and they get it for free.

ThadMattasagoblin

May 31st, 2014 at 3:43 AM ^

Also, if you directly paid college athletes, atthletic departments like WMU or Purdue would collapse. Places like Michigan, Alabama, Texas, Ohio, and PSU would win national championships every time since they can afford to pay the most.

I Like Burgers

May 31st, 2014 at 9:46 AM ^

C'mon...Purdue and Western Michigan will never, ever win a national title in football.  The playing field for them is already uneven.  The top schools you listed are the top schools for a variety of reasons that those schools and many others will never be able to replcate -- history, location, facilities, built in fan base, etc, etc.

College sports is changing because as it has gotten more and more popular and profitable, the schools never found a way to pass that on to the athletes.  Little schools are fighting to hold back the bigger schools from the inevitable and its damaging college sports as a whole.

Read this article if you want some more insight into what is going to be happening soon to college sports.

TruBluMich

May 31st, 2014 at 4:05 AM ^

Maybe a lawyer here can answer this.



I would think the company making the most money off players likeness is ESPN/ABC/Disney. Do they hide behind the first amendment? What point do they cross the line between "press" and "entertainment"? Video games are entertainment. Seems going after the networks would be the way to go. After all they are the ones paying billions to profit off the players and universities.

I Like Burgers

May 31st, 2014 at 9:59 AM ^

The difference is that the schools/conferences are selling the rights to broadcast the sporting events that they are holding.  Networks pay them for the exclusive right to set up shop in their facilities to broadcast the event.  Its not a press event.  The press conferences after the game are open to members of the press, you don't have to pay for it, and anyone with a credential can set up a camera and record video of it to use under the guidelines of the press credential (i.e. you can't take things Hoke says in a press conference and cut it up so he's now endorsing the totally awesome product you're selling).

With the video games, no one was providing permission to use the player's likeness.  The schools would exclusively license the use of their logos, uniforms, stadiums, mascots, etc and all of that was in the game in exchange for money.  Same concept as TV.  The problem was that all of the players in the game just so happened to match the players on the field exactly through height and weight, age, class, skin tone, skill set, etc.  No one was licensing that, but it was the key draw in the game.  People wanted to play NCAA 2012 because you could play as Denard under Michigan.

So the difference wasn't entertainment vs press.  It was EA and the NCAA were working together to get the players in the game, but were doing a really shitty job of hiding that, which is why they lost the case.

ThadMattasagoblin

May 31st, 2014 at 4:42 AM ^

They already run deficits. Only a few schools turn profits. When you add on the cost of paying football players, bball players, golf players etc. it's not feasible. Yea, they already win most of the titles but paying players would make it virtually impossible for Iowa State to ever beat Texas or Washington State to ever beat USC. The programs with the most money would be able to sign 20 5 stars every class.

AlaskanYeti

May 31st, 2014 at 5:19 AM ^

All of this, all of it, already happens. Honestly, without looking it up, when were the last two times Minnesota beat Michigan? Top tier programs in BCS conferences recruit whomever they want and always sign the best talent in the country or the very least, their region. The only thing paying players will do is add in a new wrinkle into the arms race that is college athletics. Schools are already trying to out spend each other with stadiums, training facilities, athletic staff (yes, coaches), training facilities, etc. Some athletic programs may run deficits. Can't say I know any figures of the top of my head, but maybe. Even MAC size conferences have TV contracts, and their teams generate a lot of money off their brand selling shirts, hats, shorts, bumperstickers, liscence plates, even those stupid flags you can pinch between the door of your car. Every single D-1 athletic department makes more than enough money to pay players. The only difference now, is that the school and it's employees get rich off of it. I have no problem giving players some kind of marginal income. Some kind of cap could be a good idea. Max 10K a year?

ThadMattasagoblin

May 31st, 2014 at 5:38 AM ^

and then compound the disparity that already exists with the fact that only a few schools can offer a recruit millions that he can't get at the lesser schools. You'd get about 5 super teams with the Jabrill Peppers', Dawshawn Hands, Laquon Treadwells etc. at every position. 10,000 cap would still be detrimental with half of the BCS conference teams currently in deficits. Even if it were possible, I don't feel that it's right to pay for a player's education which is probably worth 45-50K at UM and then give him 10K a year on top of that.

AlaskanYeti

May 31st, 2014 at 6:06 AM ^

Super teams like Bama, Oregon, Ohio, Florida State, Texas, and Notre Dame? They already have depth charts full of 4 and 5 stars at every position. How many athletes do schools have each year? 2000? IDK, I'm asking. Even still, 10K x 2000 is 20 million. Schools can scrape together 20m. Ticket sales and tuition might go up, but they already do every year!

GoBLUinTX

May 31st, 2014 at 6:48 AM ^

of "student" athlete, pay each player a cash salary equivalent of what they are currently receiving in kind.  Then the players get to choose what they do with their own money.  Go to school or buy the shiny new car, their choice.  Go clubing or eat dinner, again, their choice.

StoneRoses

May 31st, 2014 at 5:43 AM ^

While I do agree that you have to pay the players at this point, and that there should be a cap of some sort, what happens to the non-football and non-basketball sports? Do they get paid equally? Or do they basically become financed by donations? We could be looking at the John Doe Family Michigan Field Hockey team in the near future.

AlaskanYeti

May 31st, 2014 at 6:17 AM ^

Sure. Does it really matter if John Doe is remembered for creating some long lasting interest earning endowment to pay players? Would be similar to what already happens with academic scholarships. Hell, every building on campus is named after some rich alumni donor too.

grumbler

May 31st, 2014 at 5:09 PM ^

Exactly.  The argument for playing players is the argument against caps:  that the schools are conniving to deprive players of the "millions they make for the school."

The real argument against players as employees is, IMO, "why would anyone want to watch an inferior NFL?" I think you can certaiinly make an argument for student-athletes getting paid "the full cost of attendence," but once you go to the employee model, college sports is dead.

I wonder what people will think of the ruins of former college footbal stadiums in 50 years.   Will they be museums to the dead game, or just torn down for rezoning?

MosherJordan

May 31st, 2014 at 9:37 AM ^

Average head coach salary at D1 football programs is now up to 1.6 million. Or enough to pay the 85 scholarship players an extra $18,500 a year. The average at schools that regularly show up in the top 25 is the equivalent of more than 36,000 per scholarship player. Schools run deficits because competition dictates they spend all available revenue trying to compete. Right now, that's just going to coaches, facilities, and guys who organize things like the Weedeater Bowl, and NCAA suits, instead of players. I'd guess that Iowa would field a better team almost immediately if the paid players the $42,000 a year Ferentz's salary represents, and let a graduate assistant coach the team.

JayMo4

May 31st, 2014 at 7:22 AM ^

Interesting how much of the argument against is that schools can't afford to pay the kids.  They don't have to.  Let the people selling video games, jerseys, etc pay them for using their likenesses.  They get some money, the schools continue to do things as they have been, and everyone gets to share in the success of college football.

The issue isn't about schools paying kids.  It's about the NCAA not allowing the kids to in any way profit from playing college sports even though there are millions upon millions of dollars changing hands everywhere else.

k.o.k.Law

May 31st, 2014 at 7:25 AM ^

1987, and 1967, Indiana's only Rose Bowl year.

They tied with Purdue and Minnesota.  Purdue barred by no repeat rule, Indiana won the tiebreaker because Minnesota had been to the Rose Bowl more recently

well, obviously

 

How does the first amendment apply to selling someone's likeness without their permission?