NCAA Loses O'Bannon Suit

The ground beneath college athletics continues to move in favor of the student-athlete. A U.S. District Judge ruled in favor of Ed O'Bannon and his fellow plaintiffs in their antitrust lawsuit against the NCAA, but the college sports ruling body appeared to receive favorable terms in the end.

A week that will go down as one that led to major change in college athletics was capped Friday evening when a judge ruled in favor of the plaintiffs in the Ed O'Bannon vs. NCAA case that sought to provide student-athletes with the ability to profit more off of their names, images and likenesses.

The story was first reported by USA Today, which noted that Judge Claudia Wilkin's decision granted an injunction that will prevent 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."

Many questions remain, and the NCAA could appeal, but on the heels of yesterday's vote to provide the major college football conferences with the autonomy to provide unprecedented benefits to student-athletes, it's fair to say college athletics is in store for major changes.

"College sports generate a tremendous amount of interest, as well as revenue and controversy," Wilkin wrote while rejecting most of the NCAA's reasons for not sharing more revenue with its athletes. "Interested parties have strong and conflicting opinions about the best policies to apply in regulating these sports. Before the Court in this case is only whether the NCAA violates antitrust law by agreeing with its member schools to restrain their ability to compensate Division I men’s basketball and FBS football players any more than the current association rules allow. For the reasons set forth above, the Court finds that this restraint does violate antitrust law."

However, the ruling that it unfairly engages in price-fixing does not appear to be a crippling blow to the NCAA. Wilkin noted that the NCAA can still cap the amount that athletes earn while in school, but the floor must be at least cost of attendance (a proposal likely to go through for the Power 5 conferences by January).

In addition, the NCAA must fill a trust to pass on licensing revenues to athletes upon the conclusion of their careers, with the floor set to be $5,000 for every year an athlete remains "academically eligible to compete". Per the ruling, each school must offer the same dollar amount to each recruit each year, though the total can change on a year-to-year basis.

Wilkin also ruled that the NCAA is able to enforce other remaining rules, including those that preclude athletes from accepting endorsements.

“We disagree with the Court's decision that NCAA rules violate antitrust laws," NCAA chief legal officer Donald Remy said. "We note that the Court's decision sets limits on compensation, but are reviewing the full decision and will provide further comment later. As evidenced by yesterday’s Board of Directors action, the NCAA is committed to fully supporting student-athletes.”

The ruling will not take effect until the start of the next recruiting cycle in each revenue sport.

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