US court raises chances of jocks getting piece of action

Judgment is a key development in student athletes’ bid to claim a cut of billion-dollar college sports

December 12, 2013

Source: Corbis

It’s all on the line: institutions receive billions of dollars from university sports, and players are pressing for a share of the pot

A decision in a long-running lawsuit has once again raised the possibility that US student athletes may win the right to be paid for the use of their names and likenesses on television, in video games and on apparel that earns billions of dollars for networks, manufacturers and universities.

Last month’s ruling by a federal judge affirmed the right of players to challenge the rules of the governing body that oversees university sport, the National Collegiate Athletic Association, which considers students to be amateurs and bans them from receiving royalties.

In the case, brought by about 25 former university basketball and American football players, Claudia Wilken, US District Judge in Oakland, California, ruled that the athletes had the right to sue as a group – a big step forward in their long-fought campaign to win a share of the money raised from major university athletics, legal observers say.

And while there is a long way to go, some experts say that the judgment could compel the NCAA, its member universities, and video game and apparel companies to offer players a cut of the profits.

Even if it does not, the decision has sparked the idea of an independent national trade association of university athletes, which is now being formed.

This means that players ultimately could become involved in negotiations for television rights to games and could sign separate licensing deals with video game and clothing manufacturers.

“It’s a victory in that if the players win and the court finds that there are illegalities in the NCAA system of amateurism, by virtue of the players being certified as a class, all players would benefit,” said Michael McCann, director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law.

The judge denied the former players’ bid to collect royalties from the prior use of their names and likenesses, but said that their challenge to the NCAA’s limits on compensating current and future athletes could move forward.

She declined the NCAA’s request to throw the case out of court.

If the judge had signalled that the ex-college players – several of whom have gone on to highly paid careers in professional sport – could collect a share of licensing revenues from their university days retroactively, it would have had a huge financial impact on the NCAA and the manufacturers.

“Conducting a class-wide trial for claimed damages for student-athletes who played college football and men’s basketball going back nearly a decade would be completely unmanageable and unprecedented,” says Donald Remy, the NCAA’s chief legal officer, in a statement that portrays the decision as a victory for his side.

Piece of the action

Now the focus moves on to whether current and future college athletes should be eligible for payouts. Several active players have now joined the slow-moving lawsuit, which was filed in 2009. A trial is scheduled for June.

US university athletes are becoming increasingly strident in their demands for more of the billions of dollars in revenue raised from broadcasting rights and licensing. Some have written the letters “APU” – “all players united” – on their football helmets during nationally televised games this autumn.

“The idea that these are just students – it’s hard to react to that with a straight face,” Professor McCann said. “Most people look at college sport in the US and don’t believe that we should regard it as amateur. The complexity is, how exactly should they be compensated? Should they get paid for their labour, or should they get paid for their image, or both?”

A few university athletics directors have indicated a willingness to respond, suggesting that trust funds could be established from which students could collect at the end of their university careers.

The NCAA also might seek an out of court settlement. Most antitrust cases never get to trial, Professor McCann said.

“The risk of going to trial for the NCAA is that if it loses, changes could be compelled by a court as opposed to negotiated with the players,” he said. “The NCAA has everything to lose.”

If the players set up their own trade association (because they are students, not university employees, they cannot create a labour union), they may gain greater leverage, Professor McCann added. However, much uncertainty remains about whether such a move would work.

“Whether the NCAA would recognise it, whether other commercial actors would recognise it, we don’t know,” he said.

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