Court strikes down possible payments to college athletes

In this Sept. 18, 2010, file photo, former UCLA basketball player Ed O’Bannon Jr. sits in his office in Henderson, Nev. A federal appeals court agreed Wednesday, Sept. 30, 2015, that the NCAA’s use of college athletes’ names, images and likenesses in video games and TV broadcasts violated antitrust laws but struck down a plan to allow schools to pay players up to $5,000. The decision came in a lawsuit filed by O’Bannon and 19 others. (AP Photo/Isaac Brekken, File)

A federal appeals court struck down a plan to pay college football and basketball players in a ruling that NCAA leaders believe supports their contention that the athletes are students and not professionals.

The 9th U.S. Circuit Court of Appeals agreed Wednesday that the NCAA’s use of college athletes’ names, images and likenesses in video games and TV broadcasts violated antitrust laws, but vacated a judge’s decision that would have allowed schools to make deferred cash payments to athletes of up to $5,000 per year.

“The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap,” Judge Jay Bybee wrote. “Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point.”

NCAA President Mark Emmert said: “That was a very, very welcome decision from our point.”

The NCAA had appealed U.S. District Judge Claudia Wilken’s 2014 decision in the so-called O’Bannon case to allow — but not require — players in the top division of college football and in Division I men’s basketball to be paid for use of their names, images and likenesses. The money would have been put in a trust fund and given to them when they left school.

Wilken also ruled that those players should be compensated with the full cost of attendance. The NCAA in August began allowing its member schools to provide an athletic scholarship that covers the full cost of attending college, though officials say it should not be mandated by the courts.

Previously, an athletic scholarship covered tuition, room and board, books and fees. Now NCAA rules allow schools to raise the value to include other expenses, such as travel, that come with attending college. Schools determine their cost of attendance using federal guidelines.

“There are elements of (Wednesday’s) ruling that are either unknown at this point or are things that we would tend to disagree with the court,” Big 12 Commissioner Bob Bowlsby said. “But in the main I believe this has affirmed the amateur status of collegiate athletes and affirmed these are students, not employees.”

Michael Hausfeld, the lead attorney for the plaintiffs, said in a statement that the ruling confirms the NCAA and its members are a “price-fixing cartel.”

“Judge Wilken’s injunction will produce significant competition among the member schools that will translate into real money for college athletes to put toward the rising educational expenses they face,” he said.

Stephen Ross, a law professor at Penn State who specializes in sports and antitrust law, said the ruling was a win wrapped in a loss for the NCAA.

“The 2-1 majority opinion is a huge victory for the major college football and basketball programs in the country by letting them do exactly what they want to do while losing on every single major legal point they raised in the appeal,” Ross said.

Ross said the U.S. Supreme Court may eventually decide the issue if a similar but separate case that is pending is decided in favor of athletes. A case working its way through the courts, led by antitrust lawyer Jeffrey Kessler, challenges schools’ rights to cap compensation at the value of a scholarship.

Michael A. Carrier, a professor at Rutgers Law School, said plaintiffs received from the appeals court a “very strong ruling” that NCAA amateurism rules are subject to antitrust scrutiny. That will keep alive the possibility of future antitrust challenges.

But, he said, future attempts to get even more money for college athletes were hurt by this ruling.

“If even this deferred $5K doesn’t fly, nor would greater amounts that have even less to do with educational expenses,” Carrier said in an email.

The majority found that the NCAA rules against compensation violate anti-trust law by stifling competition among schools for athletes, but serve the goal of preserving the popularity of college sports by maintaining its amateur status. The court said the NCAA could still achieve that goal by providing athletes with full scholarships for the cost of attending school. But giving them cash compensation would jeopardize their amateur status, which underpins the market for NCAA sports.

In a dissenting opinion, Chief Judge Sidney Thomas said the majority wrongly dismissed expert testimony that found that paying student athletes small amounts above their cost of attendance most likely would not have a significant impact on consumer interest in college sports.

This does not end the legal challenges facing the NCAA.

“I think in a general sense we made progress,” Bowlsby said. “I think we now are well-positioned to move ahead with the rest of the challenges that we face.”