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NCAA's credit outlook revised to 'negative'

Ed O'Bannon (above) and the plaintiffs are seeking class-action status in their case against the NCAA. (AP) Ed O'Bannon and the plaintiffs are seeking class action certification in their case against the NCAA. (AP)

By Zac Ellis

The NCAA's credit outlook was revised to "negative" by the credit agency Moody's on Monday in light of the recent Ed O'Bannon v. NCAA lawsuit making its way through federal court, according to the Wall Street Journal.

A federal judge last week heard arguments concerning class action certification for the plaintiffs in the suit, led by former UCLA basketball star Ed O'Bannon. The plaintiffs seek compensation for the use of their likenesses in video games and television broadcasts.

The agency's report on the NCAA alluded to the eroding public perception of amateurism in today's college sports:

"The escalation of risks reflect the growing perceived disconnect between the amateurism of student-athletes, as codified by the NCAA, and the commercial success of high-profile college sports," the agency's report said. "Increased public discourse about the best interest of student-athletes combined with highly publicized litigation could destabilize the current intercollegiate athletic system and negatively impact the NCAA and its member universities."

Though no decision was made by Judge Claudia Wilken when both parties presented their arguments in last Thursday's hearing in Oakland, Calif., a ruling on class action certification is expected later this summer. If class action status is granted, thousands of current and former student-athletes could join the case, drastically increasing the potential damages to the NCAA. A current student-athlete -- likely a high-profile football or men's basketball player -- could also be added as a named plaintiff, a topic SI.com's Andy Staples explored last Friday.

A nonprofit, the NCAA listed $614 million in total assets in its most recent tax filings.
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