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NCAA Wins, Loses Ed O'Bannon Case

By Christopher Coble, Esq. on October 12, 2016 | Last updated on March 21, 2019

In most college sports, there are no ties; you have a winner and a loser. But in a lawsuit involving the administration of college sports, it looks like both sides have battled to a draw.

The Supreme Court last week declined to hear appeals by both the NCAA and Ed O'Bannon involving O'Bannon's lawsuit over the commercial use of college athletes' names, images, and likenesses. The denial leaves in place a lower court ruling that was both favorable and unfavorable for both parties involved, and may have lasting impacts on future college athletes.

The Good

From the NCAA's perspective, at least, the denial of appeal leaves Ninth Circuit's ruling on the amateur status of student athletes in place. In recognizing the NCAA's interest in maintaining the amateurism of college athletes (along with the apparently inherent value of amateurism as a competitive concept), the ban on any payment to players "untethered to educational expenses" remains in effect.

Schools can, however, provide student athletes with scholarships that pay for the full cost of attendance, meaning scholarship money isn't limited to tuition, room and board, and required books, and can be used on supplemental books, educational supplies, transportation, and other related expenses.

The Bad

The Ninth Circuit did rule that the NCAA's concept of amateurism must survive antitrust scrutiny, and it failed when it comes to using athlete names and likenesses. O'Bannon's suit originated from the NCAA licensing his and other athlete likenesses to video game makers without compensation to the athletes.

As Sports Illustrated's Michael McCann put it, the court determined that the NCAA's amateurism rules "constituted an anti-competitive conspiracy by the more than 1,200 member NCAA colleges, conferences and affiliate organizations. The purpose of such a conspiracy was to deny men's basketball and football players of the monetary value of their names, images and likenesses when used for commercial purposes." Athletes therefore must be compensated, and the court ruled that colleges must set aside up to $5,000 per year for men's basketball and football players, which they can receive after they graduate.

The Unanswered

The Supreme Court's decision not to rule further in the case leaves amateurism in college athletics in a bit of a gray area. If the NCAA and its member institutions can't conspire to set and limit the amount of scholarships, can some schools give more money to athletes than other schools? And more than just an athletic scholarship? We'll see what future cases have in store for the NCAA.

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