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Federal judge rules against the NCAA in landmark O'Bannon antitrust case

Federal judge rules against the NCAA in landmark O'Bannon antitrust case Photo:

A federal judge released her decision in the landmark O'Bannon v. NCAA case on Friday, ruling that the NCAA violated antitrust law by preventing student-athletes from being compensated for their name, image and likeness (NIL) rights. The ruling was first reported by USA Today's Steve Berkowitz.

The ruling came in a high-profile antitrust suit brought against the NCAA by former UCLA basketball player Ed O'Bannon and a group of 20 current and former student-athletes. U.S. District Judge Claudia Wilken's 99-page ruling prohibits the NCAA from enforcing rules that prevent student-athletes from revenues generated from the use of their names, images and likenesses. Wilken's ruling also allows for student-athletes to share in licensing revenue in the form of trust funds. 

Wilken's ruling is obviously a major hit to the NCAA's current model of amateurism. During the O'Bannon trial in June, NCAA attorneys argued that television networks paid for exclusive access to stadiums where games are played, not for the rights to football and men's college basketball players' NIL rights. Wilken disagreed. "This testimony is not convincing," she wrote. "... Broadcasting agreements -- like those quoted above -- sometimes refer expressly to name, image and likeness 'rights.'"

Wilken also refuted the NCAA's contention that a market for student-athletes' NIL rights in video games no longer exists. "Throughout the late 2000s, EA's NCAA-branded video games featured playable avatars that could easily be identified as real student-athletes despite the NCAA's express prohibition on featuring student-athletes in video games," she wrote. "... The court finds that a submarket would exist for group licenses to use student-athletes' names, images and likenesses in video games if student-athletes were permitted to receive compensation for such licenses."

As many in the media have pointed out, however, this ruling could have been significantly worse for the NCAA. Wilken's decision still allows the NCAA to set restrictions on how much money student-athletes can earn while in school. That cap cannot be set below the cost of attendance. Likewise, Wilken's injunction allows the NCAA to set a cap on the money held in trusts, although that cap cannot be less than $5,000 for every year of a student-athlete's eligibility.

Still, the ruling itself shifts a bedrock principle of the NCAA's amateurism model: Student-athletes can now receive a form of compensation without being deemed ineligible. The notion of enhancing student-athletes' benefits has been a constant topic of discourse over the last few years, as many major schools and conferences have been working to provide full cost of attendance and other improvements for future students.

Wilken said the injunction will not take effect until the start of the next FBS football and Division I basketball recruiting cycle. The NCAA -- which approved a new governance model on Thursday -- is very likely to appeal. It also released a statement on the ruling on Friday evening.

"We disagree with the court's decision that NCAA rules violate antitrust laws," NCAA chief legal officer Donald Remy wrote. "We note that the court's decision sets limits on compensation, but are reviewing the full decision and will provide further comment later. As evidenced by yesterday's Board of Directors action, the NCAA is committed to fully supporting student-athletes."

No matter what unfolds next, one thing seems certain: The O'Bannon ruling is just the tip of the iceberg. A number of other lawsuits are currently facing the NCAA, most notably the one brought by high-profile attorney Jeffrey Kessler on behalf of a group of college basketball and football players. That suit names the NCAA and the Power Five conferences (the ACC, Big Ten, Big 12, Pac-12 and SEC) as defendants; for all intents and purposes, it seeks to destroy the organization's amateurism model as fans know it.

What will be the lasting impact of Wilken's ruling? Much is yet to happen, but the NCAA is changing -- and fast.

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