College Sports Safe…for Now

U.S. District Judge Claudia Wilken's ruling in the O'Bannon v. NCAA antitrust class action lawsuit has given college sports as we know it a temporary stay of execution.

U.S. District Judge Claudia Wilken concluded the potentially momentous lawsuit by former UCLA basketball player Ed O’Bannon against the NCAA by ruling that the NCAA unfairly restrains trade by college athletes. O’Bannon, who sued on behalf of college athletes in general, contended that the NCAA had no right to prevent college athletes from profiting by use of their images, likenesses and names. The NCAA, on the other hand, argued that paying athletes for those activities would undermine college athletics by making it less popular and by upsetting the competitive balance between schools and conferences.

Although O’Bannon and college athletes won the suit, the victory is partial and circumscribed. Thus, Wilken stipulated a maximum payment of $5,000 per athlete per year of competition, which would be placed into a trust fund and disbursed to the athlete after his collegiate career was done. In doing so, Wilken seems to have allayed fears that wealthy universities would essentially buy the services of prime recruits by offering them huge sums of money, should the universities profit by their images, likenesses and names. The $5000-per-annum stipulation is a figure that will not break the budget of any major athletic department, and it essentially reinforces parity between the major college programs.

Lesser programs will be negatively affected, however. Hence, the judge’s ruling applies only to the 65 universities in the five wealthiest Division One conferences, and only to football and men’s basketball programs. The offer of a potential $20,000 bonus at the end of one’s collegiate career is just one more bargaining chip the major programs may use to lure recruits to their programs and away from those situated in lesser conferences. In other words, the competitive gap between the haves and the have-nots just widened perceptibly.

Nevertheless, there remains some question as to what the actual impact on parity will be. For while $20,000 is a significant amount of money, it is hardly a princely sum compared to the money universities make from sports, and to the money made by head coaches and athletic directors.

What’s more, this money accrues only to those athletes whose images, names and likenesses are used for profit, not all college athletes. And furthermore, this money is withheld until the athlete’s collegiate career is through. It is entirely possible that the lack of immediate gratification will lessen the allure of the money for young athletes who live overwhelmingly for the here and the now.

One sign that Wilken’s decision is not catastrophic for the NCAA is the failure of that organization to immediately announce that it will challenge the ruling. NCAA chief legal officer Donald Remy stated that the NCAA is “reviewing the full decision and will provide further comment later.” Typically, if a decision is unacceptable to either legal party, that party announces immediate intentions to appeal. The fact that the NCAA did not do so suggests that it feels it may have dodged a bullet.

However, even if the NCAA does not appeal the decision, it is certain that we have not heard the last of this issue. Hence, Wilken’s ruling was based solely on antitrust law, not on the fundamental fairness of compensation for college athletes in major programs. It is likely that some future athlete will take the NCAA to court alleging that $5000 per annum is insufficient given the embarrassment of riches major college sports bequeath to universities. Should such a suit be brought, and should the plaintiff win, then the feared destabilization and ultimate destruction of college sports could come to pass.

In the meantime, what does this decision mean for Texas Tech? Probably very little. Texas Tech, as a member of one of the elite conferences, does gain the recruiting advantage over the little guys of being able to offer a potential $20,000 bonus, but truthfully, Tech rarely recruits against the smaller schools in football and men’s basketball.

Likewise, Tech’s athletic department is, to all appearances, financially sound, which means that these bonuses are unlikely to impose an undue financial burden. More likely, the bonuses will simply cut into the profits the university makes from marketing the images, names and likenesses of prominent athletes.

To sum up, the cataclysmic earthquake that could have issued from this case didn’t occur. Judge Wilken may well have concluded that the overall social and economic good of major college sports is significant enough to merit protection and preservation, even while she understood that the plaintiffs had legitimate grounds for seeking compensation above and beyond their scholarships and the platform upon which to display their skills to professional leagues.

For the time being, major college sports remains intact and viable. But for just how long remains to be seen.

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