ESPN, Major TV Networks Hit With Class-Action Lawsuit Over College Athletics

College Football Playoffs

ESPN inked a $7.3 billion deal for the sport’s postseason through 2026, upping its previous four-year, $495 million pact for the Fiesta, Orange and Sugar bowls and securing the title game.

Up until now, ESPN, CBS, Fox and NBC have been mostly watching from the sidelines as a historic movement plays out to compensate NCAA athletes. That all changed thanks to a proposed class-action lawsuit filed on Friday in Tennessee federal court.

The complaint, brought by 10 former athletes on behalf of themselves and others similarly situated, is directly targeting the tens of billions of dollars reaped by the television industry. The plaintiffs demand that the TV networks be ordered to disgorge all profits and be retrained from maintaining contracts that have the effect of violating college athlete rights.

The latest legal action, which also targets IMG Worldwide and William Morris Endeavor, was probably inevitable — partly the consequence of separate litigation spurred by former UCLA basketball star Ed O'Bannon, which resulted in a federal judge's landmark ruling in August that put athletes on the path toward being compensated for the first time for the use of their likenesses.

In that case, U.S. District Judge Claudia Wilken raised eyebrows in the television industry when she stated in a pretrial ruling, "Whether Division I student-athletes hold any ownership rights in their athletic performances does not depend on the scope of broadcasters’ First Amendment rights but, rather, on whether the student-athletes themselves validly transferred their rights of publicity to another party."

As the O'Bannon case has now landed at the 9th U.S. Circuit Court of Appeals, the television networks now find themselves facing the consequences of a determination that the NCAA violated antitrust law by restraining athletes from licensing their names and images in game telecasts and video games.

"The Broadcast Defendants have all entered into lucrative, anticompetitive contracts with the NCAA and Conference Defendants for 'first-tier' and 'second-tier' broadcasting rights," states the complaint. "The agreements between the Broadcast Defendants, the Licensing Defendants, the Conference Defendants, and the NCAA exclude Student Athletes from participating in the marketplace for the licensing, sale, and use of Student Athletes’ names, images, and likenesses."

Represented by attorneys at three law firms, the plaintiffs are asserting violation of their rights of publicity under Tennessee law, violation of Section 1 of the Sherman Antitrust Act, civil conspiracy, false endorsement and unjust enrichment.

If the broadcaster amicus briefs in the O'Bannon case provide any hint about what's to come, the broadcast defendants are likely to argue against the notion that athletes have publicity rights on games, and in the event that argument fails, they will also raise a First Amendment defense to the claims.

The consequences could be huge and go far beyond the tens of billions of dollars at stake over college sports. Here's what Fox said during the O'Bannon case:

"If this Court takes the unprecedented step of conferring on college athletes the power to restrain broadcasts of sporting events in which they participate, other participants — such as referees, coaches, cheerleaders, team mascots, or even fans — will probably demand the same rights. A small group of 'hold-outs' or even one disgruntled participant conceivably could block the Sports Broadcasters from televising the most popular sporting events in the United States, cutting off millions of citizens from matters of great public interest. … Before long, participants in all sorts of newsworthy events could demand compensation for the use of their name, image and likeness in broadcasts or footage of those events. … If Plaintiffs are allowed to proceed with their claims in this case, the news media will be substantially constrained from televising and reporting newsworthy events, and the public will be deprived of vital, necessary, constitutionally protected news reporting."

Twitter: @eriqgardner