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This past weekend, the college football season kicked off. On Saturday night, NBC had a huge ratings win in its telecast of Michigan vs. Notre Dame. With nearly five million viewers tuning in, ABC didn’t do too poorly itself with coverage of Alabama vs. Louisville. What does it say that four years after a California federal judge granted victory to UCLA basketball star Ed O’Bannon in his antitrust class action alleging the NCAA unlawfully restrains college athletes from licensing their names and images, collegiate athletics continues to be popular? That question will be heavily contested at a 10-day trial that may upend the NCAA’s amateur system and the cash cow of college sports.
The trial opens on Tuesday in Oakland, California, before U.S. District Court Judge Claudia Wilken. In advance, suing athletes and big NCAA collegiate conferences have outlined their arguments and witnesses. Fox, CBS and other networks are paying attention too and have urged Wilken with just limited success to keep the most sensitive portions of their rights deals a secret.
Thanks to the O’Bannon case, which went up on appeal, the NCAA was pressured into giving student-athletes scholarships up to the full cost of attendance. That meant thousands of dollars more to each athlete.
Wilken must now decide whether to enjoin the NCAA from enforcing a rule that “fixes or limits compensation or benefits” that schools may offer athletes.
The NCAA and its conferences are aghast at the athletes’ proposed injunction.
“They would replace a successful, established product with a fundamentally different one, with staggering and destructive implications,” states a copy of defendants’ opening statement. “Some schools could compete for highly prized athletes by offering millions of dollars in compensation. Others with fewer financial resources would struggle to offer Division I college sports at the same level, offering a diminished product that would interest consumers less. And others could withdraw from Division I sports altogether to preserve their conception of the role amateur athletics should play.”
But the athletes, including West Virginia University running back Shawne Alston and California basketball star Justine Hartman, say they can show that the compensation restraints can’t be justified on pro-competitive grounds.
“Defendants will fail to come forward with any evidence capable of demonstrating that their claimed justifications are anything more than NCAA mythology,” states their own opening brief, which further puts forward that even if the judge won’t enjoin compensation limits, she should at least consider alternatives. “Most notably, Defendants could permit individual conferences — which, as presently constituted, do not possess market power — to set their own rules concerning compensation and benefits, without NCAA-wide agreements or conferences colluding with one another. This would allow each conference to make its own decisions about the claimed pro-competitive need for compensation caps while, at the same time, providing Class Members and the relevant markets with the benefits of competition among the conferences and their members.”
What has happened since that landmark decision four years ago in the O’Bannon case that eventually resulted in athletes at least getting thousands of dollars more each for cost of attendance?
The plaintiffs say there’s no proof whatsoever of any negative impact on the viewing audience for college sports, nor any causal effect on the compensation rules and whether consumers follow, watch or attend games. Unlike the O’Bannon trial, this one won’t have any testimony from a broadcasting expert on the impact of getting rid of the rules intended to promote amateurism.
The NCAA has a different spin.
“Plaintiffs point to the continued demand for college sports since the NCAA made minor changes to its rules in the wake of O’Bannon,” states the NCAA’s opening. “But none of those changes crossed the line from amateurism to a ‘pay-for-play’ world. As a result, the continued popularity says nothing about how consumers would react to a radically different concept of college sports, in which athletes could be paid unlimited amounts for their performance.”
The issue of whether the NCAA’s fixed limits to compensation contribute to the demand for college sports is the first big one for Judge Wilken. The other is whether these rules contribute to the integration of athletics with academics. Both sides obviously have different opinions on this. Athletes and college administrators will testify about their experiences with the current system.
As for the media companies, they will only be participating indirectly in the trial proceedings. Late last week, Wilken responded to their efforts to restrain use of confidential information by determining that the parties and witnesses shouldn’t discuss non-public dollar figures. However, she wouldn’t go further. Wiken wrote, ” The moving parties have not established compelling reasons to seal or restrict the use of any other information at trial.”
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