Ed O’Bannon v. the NCAA

1. Ed O’Bannon v. the NCAA TJ Berridge David Brown Chris Edick Jake Van Alten

2. History/Background Information • This antitrust lawsuit was filed on July 21st, 2009 against The NCAA and the Collegiate Licensing Group. • O’Bannon felt that EA Sports was using the likenesses of athletes and former athletes in their video games without proper permission from the players. • O'Bannon is alleging that if the NCAA didn't force him to sign the eligibility waiver/contract, then he could have received money from someone else (an EA competitor) to use his likeness. • Even if you consider players' scholarships adequate payment for their services, this still artificially depresses how much they're paid.

3. History/Background (Continued) • O’Bannon did not sue only for his own needs; instead he was also suing for the entire 1996 UCLA basketball team as their likeness was not respected when the creators were developing this video game. • Sam Keller played an important role in the Ed O’Bannon v. NCAA lawsuit. Sam Keller filed a lawsuit against the NCAA in 2009 stating that EA Sports uses players’ likenesses without permission. • “A circuit court of appeals rejected game manufacturer Electronic Arts' claim that its use of player likenesses in its football game is protected by the First Amendment in a lawsuit brought by former quarterback Sam Keller. The move is seen as significant in the case going forward, at least as it applies to a Keller's suit brought against EA and the NCAA” ( Dodd, 2013).

4. History/ Background (Continued) • “The appeals court voted 2-1 in favor of Keller. The decision stated that the Arizona State quarterback in the 2005 EA game had the "same height, weight, skin tone, hair color, hairstyle, handedness, home state, play style (pocket passer), visor preference, facial features, and school year as Keller” (Dodd, 2013). • There were many things EA sports said to make it seem that if they weren’t doing anything wrong, they pleaded that the first amendment protected their rights to justify what they were doing. “EA claimed that the First Amendment protected its right to publish the game. EA had first lost the appeal in district court before being defeated in the Ninth Circuit Court of Appeals. The ruling on the First Amendment claim had gone on for two years” (Dodd, 2013). • EA Sports and the Collegiate Licensing Group tentatively settled for $40 million on September 27, 2013, leaving the NCAA as the only defendant now in the lawsuit. Even with the settlement there are still current and former players fighting for their rights because they still believe that their likenesses is being taken advantage of without permission • This is an ongoing issue

5. Secondary Issues • Paying college athletes • Player likeness is currently set at zero • NCAA has all control as of now

6. Players Fighting for more Rights • Players are fighting for more rights • Northwestern players union

7. How Games will be Televised • NCAA's limits on broadcast contracts were so egregiously in violation of the rules against open competition • Could change the way we watch college football • Billions of dollars of revenue-sharing is generated in college athletics at the major Universities on a yearly basis

8. NCAA College football 2014 will not be produced • Legal concerns • Stuck between the NCAA and student athletes who were seeking compensation for their likeness • Potential job loss • NCAA Changing

9. November 1, 2013 • U.S. District Judge Claudia Wilken denied the motion by the NCAA to dismiss the case and strongly sided with the players asking for compensation for use of their images and likenesses • Despite this decision, it does not mean impending victory for either side at this point.

10. The Ruling • Split decision: The players were able to certify a class, allowing their lawsuit to go forward, but the lawsuit has been significantly reduced in scope. • “U.S. District Judge Claudia Wilken ruled past players cannot collectively seek damages over use of their likeness, but will let them try for a verdict that could fundamentally change the NCAA's limits on player compensation for appearing in TV broadcasts and other licensed areas.” • These players include Ed O’Bannon, Sam Keller, Bill Russell, and thousands of other former NCAA Division I basketball and football players

11. The Ruling (Continued) • Wilken granted class action status to the injunction class, but denied that status to the damages class. • Early entrance into the pros is a hole Wilken found in the players’ case • Class certification for damages was denied because it is impossible to figure out which athletes would have stayed in school longer if they would have received compensation, and it is also impossible to figure out which athletes would not have had a chance to play if other athletes ahead of them would not have gone on to professional leagues.

12. Players’ Reaction to Ruling • Former players, including Ed O’Bannon, see this as a setback because they believe they should be compensated for their abilities. • What can these former players do? • Despite this, players can still file individual lawsuits against the NCAA

13. Advantages to Filing Individually • Reduce, and possibly eliminate, Wilken’s two critiques • Video game rosters were smaller than actual rosters, so many players in a class of tens of thousands would not have been in those games. • A select group of former players (more visible players), however, could more credibly establish that they were in those games. • “Wilken also stressed that some former college players benefited by amateurism rules.” • If college athletes had been compensated, some would have stayed in college longer rather than turned pro, which means other players would not have received scholarships. “Players who sue in new, individualized lawsuits could attempt to specifically explain how they were harmed, not helped, by NCAA amateurism rules.”

14. Advantages (Continued) • Fewer players would actually sue the NCAA using the individual lawsuit strategy • Dozens to hundreds of players, as opposed to tens of thousands • This could actually help the players’ cases • “Instead of litigating on behalf of lesser known players who the NCAA might persuasively argue received far more in scholarship than they generated in revenue, the plaintiffs in the multiple-lawsuit approach would all have been solid or star college players.” _ Wrote Michael McCann

15. The Trial • On February 21, U.S. District Judge Claudia Wilken ruled the lawsuit will go to trial • June 9 is when the trial will begin

16. Sam Keller Appeal • In July 2013 the ruling on the appeal was decided • “Electronic Arts lost an appeal to dismiss a former Arizona State and Nebraska football player's complaint that the company illegally used his likeness in the NCAA Football video game without permission.” • Ed O’Bannon Lawsuit defaults to this precedent

17. No Doubt Precedent • The two majority judges that sided with Keller on the ruling on the appeal for his case “cited precedent set in a case involving No Doubt, a band with Gwen Stefani that fought its images being used in a video game without permission.” – Jon Solomon

18. Back to Ed O’Bannon • Neither side has indicated that they want to appeal Judge Wilken’s decision • “The elimination of the damages class severely reduces the chances of a settlement. An agreement to end the case would require a change in NCAA regulations that both the NCAA and its member institutions will fiercely resist. The risk of a big verdict is off the table, and the players are not likely to walk away for a nominal payout.” – Patrick Vint

19. History of the “Quick Look” • NCAA v. Board of Regents of the University of Oklahoma in 1984 • The decision ended the NCAA's attempts to place limits on the televising of college football, and it allowed major programs to make their own broadcast deals • The Supreme Court ruled that the NCAA's limits on broadcast contracts were so egregiously in violation of the rules against open competition that only a ‘quick look’ was necessary to bring an end to the NCAA's plan for television. • Ended NCAA attempts to control television markets and allows schools to keep proceeds of televised games and don’t need to share revenue with other NCAA members. • The University of Notre Dame on NBC

20. The “Quick Look” Applied to O’Bannon • The players who are now demanding payment for use of their names, images and likenesses are relying both on the ‘quick look’ procedure and the substance of the ruling in the Board of Regents decision.” • The ban on payment to college athletes is a rule that “stifles competition” • “The players' action is clearly an attempt by their lawyers to recapture the momentum that they lost with the ruling this month (November) and to push their attack on the NCAA to a quick conclusion in a case that was filed four years ago.” – Lester Munson

21. The NCAA on the “Quick Look” • “It appears that having finally lost their claim for monumental damages, the [players'] lawyers now seek to challenge amateurism itself,” said Donald Remy, the NCAA's chief legal officer. • Remy went on to say, "They ask the court to disregard established Supreme Court and appellate court authority in their ongoing effort to destroy college sports for the vast majority of student-athletes in order to pay a few.”

22. February 20, 2014 • The players presented the injunction at the hearing on this date • Wilken did ask for a trial as she decided that the issue requires more than just a "quick look.”

23. Future Outcomes • Future Outcomes of the case are still highly speculative. • Many analysts believe the lawsuit will have a significant impact on the NCAA’s policies and structure. • Since the case was initially filed, it has already brought awareness for reform. • The main issue is the legality of the NCAA requiring an athlete to sign away their likeness for perpetuity.

24. Outlook of Lawsuit • “The athletes have found a fair and level field on which to contest the NCAA’s control over their lives; for the NCAA to survive in its current form, it has to win the lawsuit or get the lawsuit dismissed. There’s no third alternative.”-Michael McCann (2013), Sports Law Professor at University of New Hampshire and legal analyst for Sports Illustrated.

25. Plaintiff’s Stance • Hausfeld LLP, lawyers for the plaintiffs stated: “The NCAA’s rules that prohibit payment to student-athletes for use of their names, images and likenesses may have served a purpose in another era. But in this era of the commercialization of college sports and multi-million dollar broadcast contracts, these rules only serve to exploit the very student-athletes that generate the millions of dollars that pad the pockets of the NCAA. There is a growing public recognition that the NCAA’s business practices are unfair and we look forward to proving in a court of law that they must be changed.”

26. Current Situation • Plaintiffs have held firm in their stance for change. • Have threatened to expose issues such as • Commercialization of games. • Illegal payments to players. • Academic Fraud and low graduation rates. • Schools’ spending on coaches’ salaries and facilities. • School dropping various sports teams. • The NCAA has commented they are ready to take the lawsuit all the way to the U.S. Supreme Court

27. Form 08-3a • Waiver required to sign by student-athletes to make them eligible for participation. • “You are NOT ELIGIBLE in any sport if, after you become a student-athlete, you accept any pay for promoting a commercial product or service or allowed your name or picture to be used for promoting a commercial product or service”. [Bylaws 12.5.2.1. and 12.5.2.2]

28. Questions to Answer • Is Form 08-3a a “contract of adhesion?” • Does the university have a right to a player’s likeness from the time they are in school and beyond when they are finished playing there? • Waiver could be ruled as a violation of the Sherman Antitrust Act.

29. Focus of Lawsuit for Future Student-Athletes • Lawsuit is currently focusing on the “future distribution of revenues.” (Rob Carey-Sam Keller’s lawyer) • Possibility of some sort of compensation for future student-athletes. • NCAA believes that any form of payment to players violates the “amateurism” of college athletics.

30. Looking for Autonomy • At the January 2014 NCAA Convention, the five major conferences made preliminary steps to exercise more freedom from the NCAA restrictions when dealing with their own student-athletes.

31. Player Stipends • The idea of player stipends has been suggested. Major 5 conferences claim they have the means to support stipends. • Player Stipends would be difficult to adopt because most universities can’t afford them financially and player stipends could trigger a violation of Title IX.

32. Final Assessment • Many analysts believe that some sort of change has to occur in the NCAA’s current model of doing business. This lawsuit has created a greater awareness that change is necessary.