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Court Grants Time Out in NCAA Rule Changes, Athlete Payments

By Casey C. Sullivan, Esq. on August 03, 2015 | Last updated on March 21, 2019

The NCAA was given a brief reprieve from implementing payments to former college athletes after the Ninth Circuit granted them a stay last Friday. Without the stay, the association would have been required to start making payments to college football and basketball players for the use of their names, images, and likeness, following a player led anti-trust suit last year.

That suit, filed by former UCLA basketball star Ed O'Bannon and 19 other former college athletes, overturned NCAA rules which had prevented students from sharing in proceeds generated by the use of their likenesses. Now, the NCAA will be allowed to maintain its current rules while the Ninth considers its appeal.

No Pay for Student Athletes

The NCAA regulates athletes at more than 1,000 colleges and universities, in everything from men's basketball to women's bowling. The association's rules limit the amount of compensation that players can receive, though broadcast contracts and licensing agreements bring in huge amounts of revenue. The NCAA itself generates almost a billion dollars in revenue each year, but most college athletes see little to none of that money.

The lawsuit at issue arose after O'Bannon recognized himself in a video game licensed by the NCAA. O'Bannon and other players sued, arguing that the NCAA restrained trade in violation of the Sherman Antitrust Act by monopolizing the licensing of players' images. The federal district court for northern California agreed, enjoining the NCAA from enforcing its rules, at least against college basketball and football players.

NCAA Avoids Rule Changes

That meant that the NCAA had just about a year to rework its licensing and payment system. Under the court's injunction, the association was to put money for the players in a trust account, to be paid out to individual players when they complete their college athletic careers. Those payments couldn't be less than $5,000 for each year of competition. Further, the ruling also allowed students to negotiate their own licensing agreements, potentially allowing them to earn some of the millions of dollars the NCAA had once kept for itself.

In seeking the stay, the NCAA emphasized the struggle it was facing in complying with the court's injunction. The association's lawyer told The Associated Press that, "Candidly, it's a difficult task," complying with the ruling, "given the way college athletics work." The stay means that the NCAA will get to put those compliance efforts on hold until the Ninth rules on its appeals. The NCAA has no plans to implement any changes to its rules in the meantime, its lawyer says.

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