On Thursday in Oakland, Calif., attorneys representing former UCLA basketball standout Ed O'Bannon argued before a federal judge that the antitrust claim filed against the NCAA almost four years ago should be expanded into a class action suit. At stake, potentially, are billions of dollars generated by live broadcasts, and licensing fees for memorabilia and video games. Bill Littlefield speaks with Rachel Bachman of the Wall Street Journal.
BL: What were the arguments made by each side on Thursday before U.S. District Court Judge Claudia Wilken, specifically regarding whether this should be a class action suit?
RB: Well, the plaintiffs are arguing that the NCAA and its business partners have conspired to essentially fix the price of the likeness and name of a college athlete at zero. So that they can use an athlete’s name and likeness without compensating that athlete, and that this violates U.S. antitrust law and that the judge should intervene and change this. They also argued that the suit should be expanded from the handful of current plaintiffs to a class action suit which would potentially involve several thousand athletes, primarily Division I basketball and football players.
BL: What would class action status potentially mean for the plaintiff and the defendant in this case?
RB: For the plaintiffs, it would mean certainly broadening the scope to include many more athletes than are involved now. It’s just a relative handful. It could include thousands of athletes primarily men’s basketball and football players because those are the rights that are most often licensed and sold. Now for the defendants, the NCAA, this could potentially mean a radical adjustment of their business model. Essentially how the NCAA operates is it negotiates for all kinds of things everything from trademark and licensing rights to much more valuable television rights to broadcast games. In fact, about 80 percent of the NCAA’s budget comes from the television rights sold for the NCAA basketball tournament. So that money is obviously enormously valuable. If the NCAA were to lose a class action suit, it potentially would have to share some of those billions of dollars with the athletes.
BL: How will the NCAA defend the current model, or models, if you will?
RB: Well, the NCAA has said from the start that for one thing athletes enter into these agreements voluntarily. They aren’t forced to be college athletes and adhere to the requirements of the NCAA. They do so voluntarily. The NCAA also counters that former athletes are not actually limited from profiting from their name and likeness. They can make their own deals with businesses that want to use those things. And finally, the NCAA will just say simply that this is our operating model we’ve always operated under a model of amateur athletics and we believe that that’s part of the attraction to viewers.
BL: There has been some speculation that if Ed O'Bannon et al. prevail in this lawsuit that would be the end of the NCAA as we know it. Do you think that's probable?
RB: I think it’s unlikely that this would ruin the NCAA. I think that there could be a pretty significant restructuring in the economics of the operation. And I also think it’s possible that a few dozen of the very highest profile athletic departments would spin off and essentially form another division. Wherein they would be able to adjust to the new reality, which would be athletes receiving some compensation.
This segment aired on June 22, 2013.