The economic model under which college sports has operated and thrived for decades is under attack from all sides, and after suffering a major legal defeat in federal court on Friday, the NCAA will regroup and digest a stinging rebuke of some of its most basic principles.
The courtroom victory, in which a federal judge ruled the NCAA violates antitrust law by prohibiting athletes from being paid, was not a death knell to the time-honored collegiate system that produces billions of dollars in revenues and rewards its athletes with scholarships instead of paychecks. But legal analysts say it could prove to be a bellwether of sorts.
“I don’t think things will be able to stay the same,” said Roger Abrams, a Northeastern University law professor and leading authority on matters of sports and labor law. “These are attacks on the truly fundamental part of what the NCAA is and stands for.”
The organization’s course of action is unknown. It likely will appeal the ruling but has given no indication it’s eager to embrace any form of a pay-for-play model that might profoundly change the way the NCAA does business and the way the United States grooms and compensates some of its top young athletes. Even as lawsuits fill courtroom dockets, athletes discuss unionization and congressmen cast a wary eye toward the NCAA, the organization has been steadfast in its belief that amateurism is essential to competitive balance.
“They’re among some of the most close-minded individuals I’ve ever come across in almost 50 years of practice,” said Michael Hausfeld, the Washington lawyer who served as lead counsel for plaintiffs and scored a big victory in O’Bannon v. NCAA.
The lawsuit, led by former UCLA all-American basketball player Ed O’Bannon, was originally filed five years ago, charging that the NCAA violated the Sherman Antitrust Act by profiting from the use of athletes’ names and likenesses while barring the athletes from any share of the revenues. U.S. District Judge Claudia Wilken heard testimony for more than two weeks in June and issued a 99-page decision Friday. Her ruling didn’t dismantle the NCAA’s long-standing model, but legal analysts say it might have created some harmful fissures.
“I think this ruling means the days of the NCAA hiding behind its amateurism defense are over,” said Michael Carrier, a Rutgers law school professor who specializes in antitrust matters. “The NCAA has relied on this defense for years. It has used it to have all sorts of restraints on players. In this incredibly thorough opinion, the judge takes apart all of those arguments.”
Wilken’s decision would allow schools to place at least $5,000 per year per athlete in trust, which could then be paid to the athlete after he or she is finished playing. While the ruling doesn’t require schools to pay its athletes, it means the NCAA can’t prevent its members from doing so — at least within the limited terms she outlined.
“Schools that cannot afford to reallocate any portion of their athletic budget for this purpose would not be forced to do so,” Wilken wrote.
While the ruling itself might dent some athletic budgets, the judge’s explanation could have an even bigger impact, Hausfeld said, arming plaintiffs in other cases with the legal ammunition they will need to seek more wide-reaching changes. The judge essentially ruled that compensating athletes would not lead to the downfall of college sports.
Even as the NCAA appeals the decision, many legal observers will turn their attention to another lawsuit — Jenkins v. NCAA — an ambitious case that seeks to undo the NCAA’s economic model and essentially turn college athletics into a free market. The lawsuit was filed in March by Jeffrey Kessler, a prominent sports labor attorney who has taken on the NBA, NFL and Major League Baseball and is credited with helping usher in professional football’s current system of free agency.
“The Kessler case was helped out by this,” said Carrier, the Rutgers professor. “There are obviously differences, but the underlying themes are often the same. To the NCAA: What did you do, did that violate antitrust laws and what justification did you have for that? The fact that amateurism and competitive balance didn’t apply here will give extra ammunition to the plaintiffs in the Kessler case to say it shouldn’t apply there.”
The NCAA remained mostly tight-lipped on Friday’s ruling. In a prepared statement, the organization’s chief legal officer, Donald Remy, said the NCAA disagreed with the court’s decision.
“We note that the court’s decision sets limits on compensation but are reviewing the full decision and will provide further comment later,” he said.
Hausfeld said he was “extremely pleased” with Friday’s ruling and that his client was “ecstatic and overwhelmed.” O’Bannon played at UCLA from 1991 to 1995, when the team won the national championship.
“Right now it’s another step in the process,” Hausfeld said. “Will it come to an end? It should sooner rather than later. If people sat down, understanding that there will be changes in college sports, as well as college academics for athletes — if we sat down with all the interesting parties and said, ‘Okay, let’s figure out what’s going to work best.’ ”
Those conversations might not happen without more legal wrangling. The model won’t likely be fundamentally changed — or irrevocably endorsed — for several years to come. Legal analysts agree that the biggest impact of Wilken’s ruling could be that it sets the stage for bigger arguments to come.
“At some point, the NCAA will have to react with something other than, ‘We will appeal.’ That would suggest they aren’t learning anything from the fact that life in college sports is changing,” said Abrams, the Northeastern professor who has published seven books on sports and labor law. “And it’s changing in part because the NCAA has been remarkably successful putting together a product that is so popular in the marketplace.”Correction: An earlier version of this story said that Roger Abrams was a professor at Northwestern. He is a law professor at Northeastern University.