NCAA Game Change: How Two Big Decisions Could Impact Agents, TV Deals

5:00 AM PST 08/13/2014 by Rebecca Sun
AP Images
Ed O'Bannon

Two back-to-back decisions could lead to an overhaul of the industry

This story first appeared in the Aug. 22 issue of The Hollywood Reporter magazine.

The collegiate sports business has opened Pandora's box, and the ramifications of two back-to-back decisions could lead to an overhaul of the industry.

In a landmark antitrust class action suit led by ex-UCLA basketball star Ed O'Bannon, U.S. district judge Claudia Wilken ruled Aug. 8 that student-athletes can't be prevented from getting paid for the use of their names, images and likenesses. The day before, college athletics' top governing body granted its five most powerful conferences autonomy to change their rules through a legislative process separate from the rest of Division I.

The two moves mean more power for student-athletes, but it's not yet open season for agents looking to sign them. Players still are barred from individual endorsement deals, and Wilken's injunction allows the NCAA to cap each student-athlete's annual licensing revenue at $5,000, to be held in a trust available only after he or she leaves school.

Still, Scott Rosner, associate director of the University of Pennsylvania's Wharton Sports Business Initiative, says that the power conferences may now opt to lift certain NCAA recruiting restrictions, which eventually could allow agents to get involved with players earlier without jeopardizing their college eligibility.

As for television deals, the most lucrative football rights are held by the power conferences, and all but the Big Ten are currently in the middle of long-term contracts. But as elite programs in minor conferences now have added incentive to try joining the Power 5, any significant conference realignment could reopen those media deals.

The NCAA holds rights to the Division I men's basketball tournament, currently under a $10.8 billion, 14-year contract signed with CBS and Turner in 2010. Some observers had speculated that the power conferences would threaten to secede if NCAA president Mark Emmert hadn't granted them more autonomy, which surely would have hurt March Madness' worth. On the other hand, Rosner notes that the governing change, which still must be approved by the wider NCAA, would further widen the gap between the haves and have-nots of college programs. That could lead to less compelling tournaments: "The NCAA just unwittingly allowed for the weakening of its most valuable asset," he says.

The NCAA will appeal the O'Bannon ruling, but regardless of the outcome, the case is hugely significant, says 21 Marketing co-CEO Rob Prazmark. He likens it to baseball star Curt Flood's 1972 Supreme Court case, which ushered in the era of free agency. And another antitrust lawsuit brought by sports labor attorney Jeffrey Kessler seeks to lift all compensation restrictions on college athletes, essentially turning amateur sports into an open market. A victory there would mean, Rosner says, "the professionalization of the intercollegiate model." 

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