Supreme Court Won't Hear NCAA Athletes Challenge to Pay Rules

The justices vote against hearing an antitrust challenge that had broad implications to the entertainment industry.
P Photo/Eric Draper

The U.S. Supreme Court has decided against diving into the controversial topic of whether NCAA athletes can be restrained from licensing their names and images in TV game telecasts and videogames. On Monday, the high court declined to review an antitrust case involving former and current NCAA athletes including ex-UCLA basketball star Ed O'Bannon.

The NCAA has for decades enforced an "amateurism" policy that forces athletes to sign waivers as a condition for athletic participation. The NCAA then sells group licenses to broadcasters and video game publishers so they can use athlete names, images and likenesses. 

This spurred a class action lawsuit against the NCAA and its licensing body contending that the restrictions in combination with deals with publishers and broadcasters amounted to an antitrust violation. Absent the restrictions, athletes could potentially make their own licensing deals. Or at least, they could bargain for compensation for their exploitation.

In August 2014, after a trial, U.S. District Judge Claudia Wilken ruled the system was an unreasonable restraint and that the procompetitive justifications by the NCAA weren't enough. For the first time, college athletes could legitimately imagine the prospect of getting compensated beyond academic scholarships. A year later, the 9th Circuit Court of Appeals agreed that the rules went too far, but expressed concern that the cash compensation packages of up to $5,000 per athlete as a remedy went too far.

The 9th Circuit judge wrote, "Instead of asking whether making small payments to student-athletes served the same procompetitive purposes as making no payments, the evidence before the district court went to a different question: Would the collegiate sports market be better off if the NCAA made small payments or big payments?"

Both sides could have gone back to the trial court to argue the procompetitive justifications. Instead, they took the risky gambit of asking the Supreme Court to review this down-the-middle ruling that neither blessed amateurism nor gave athletes exactly what they had demanded.

Besides questions related to the interpretation of antitrust rules and procedure, the NCAA asked the high court to consider whether the First Amendment protects against realistic portrayals of persons in expressive works like video games. If the NCAA was right — and the First Amendment forecloses athletes from making such demands — then athletes arguably have no standing to sue. The athletes opposed having the justices review this issue, but it raised the stakes significantly for Hollywood as films and television shows often feature biographical portraits of real-life individuals. The one and only time the Supreme Court tackled the line between one's right of publicity and the First Amendment was in 1977 in a case over a TV station that had shown the entirety of a cannonball performer named Hugo Zacchini.

But Monday, among a long list of cert denials, the Supreme Court decided that for whatever reason, the time wasn't right to address this. It could potentially tackle the First Amendment issues under a different vehicle. The case will now likely go back to the district court level to address the 9th Circuit's guidance. There will be no new big decision impacting what's become a multi-billion dollar business that's especially important to a television industry increasingly reliant on live sports. 

"While we are disappointed with this decision not to review this case, we remain pleased that the Ninth Circuit agreed with us that amateurism is an essential component of college sports and that NCAA members should not be forced by the courts to provide benefits untethered to education, including providing any payments beyond the full cost of attendance," said Donald Remy, NCAA chief legal officer, in reaction to the Supreme Court's denial.

Among the other cases that the high court turned down on Monday was one contending that American Idol unfairly discriminated against African-Americans and another that the blockbuster film, Avatar, violated another author's copyrighted works.