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O'Bannon v. NCAA: Case Challenges Business Model of College Sports

A case going to trial Monday in Oakland, California, is the most serious challenge yet to the NCAA’s amateurism model.
Image: Ed O'Bannon Jr.
In this Sept. 18, 2010, photo, former UCLA basketball player Ed O'Bannon Jr. sits in his office in Henderson, Nev. Sonny Vaccaro was in search of players who felt wronged when he teamed up with former UCLA basketball star Ed O'Bannon in 2009 to file an antitrust lawsuit against the NCAA over the commercial use of O'Bannon's image.Isaac Brekken / AP file

The NCAA is under attack from critics who say it exploits the free labor of student athletes to make billions of dollars — and the most serious challenge to its treasured model of amateurism went to trial Monday in California.

Ed O’Bannon, who led UCLA to a national basketball championship in 1995, took the witness stand and opened the landmark case by saying, according to The Associated Press: “I was an athlete masquerading as a student.”

He testified that he spent as much as 45 hours a week on basketball in college, compared with only 12 hours on studying. He said he even changed his major, to U.S. history from communications, after an academic adviser said it would be better for his basketball schedule.

“I did basically the minimum to make sure I kept my eligibility academically so I could continue to play,�” he said.

O’Bannon is the face of an antitrust lawsuit that accuses the NCAA of unfairly using players’ images to make big money, primarily off TV broadcasts.

“This is a bet-your-company case for the NCAA,” said Alan Milstein, a prominent New Jersey sports lawyer with expertise in antitrust issues, who is an NCAA critic. “This is live or die.”

The case is expected to last several weeks. It is being heard not by a jury but by a judge, Claudia Wilken of Oakland federal court. Here’s a look at what to expect.

What happens if O’Bannon wins?

The NCAA would have to change its rules, although probably not to a straight pay-for-play model, like the pros have. The organization could be required to set up a trust fund to pay college athletes after they leave school.

A win for O’Bannon might also allow a handful of college athletes — think Heisman Trophy-winning quarterback Johnny Manziel of Texas A&M, in an example from last year — to sign lucrative endorsement contracts without losing their NCAA eligibility.

What happens if the NCAA wins?

Nothing would change right away, but the NCAA is fighting a war on more than one front. Another lawsuit, pending in New Jersey, proposes letting colleges openly compete for athletes, meaning the stars could go to the highest bidder.

Football players at Northwestern University have already persuaded the National Labor Relations Board to let them vote on whether to form a union and bargain for benefits, unemployment insurance and perhaps cash. The players voted in April, but the ballots were impounded pending the board's review of the decision.

What should we expect at the trial?

For sure, a window onto the river of cash flowing to the NCAA and major college conferences. The O’Bannon side will try to show that the NCAA breaks antitrust law, including by blocking the players from negotiating their own deals for the use of their images, and makes a fortune doing it.

The O’Bannon side will paint the NCAA as a profit machine for people connected to football and men’s basketball, Milstein predicted. The highest-paid college football coaches in America make north of $5 million a year.

The NCAA will try to show that amateurism is the foundation of its business model — attracting fans and ensuring competitive balance among schools. The NCAA will also highlight the benefits of its student-athlete model, including scholarships and tutors.

And it will argue that paying a significant amount of money to athletes in football and men’s basketball, the two biggest moneymakers, would leave less money for smaller sports, women’s sports and lesser-known colleges.

“The argument is going to be that if you take all this money out of the only two programs that make money, everything else is gonna go away. We’re not going to be able to afford anyone else,” Milstein said.

A settlement is always possible up to the last minute. The judge has encouraged it.

Could this case wind up before the Supreme Court?

Sure. The losing side is almost certain to take its case to the 9th U.S. Circuit Court of Appeals, and an appeal to the Supreme Court would be the next logical step. Take it to the bank, said Milstein, who thinks the justices “want this case” and would look favorably toward the NCAA.

Even if the Supreme Court agreed to take the case, the appeals process would take years. By the time the Supreme Court could even hear the case, the NCAA, under growing public pressure, might have agreed to changes to its business model.

How much money are we talking about here?

Billions, and it’s only growing. In an era of DVRs and cable cord-cutters, live sports are one of the few places anymore where advertisers can count on tens of millions of people watching television at the same time.

CBS and Turner Sports are paying a reported $11 billion over 14 years to televise the NCAA basketball tournament known as March Madness. ESPN ponied up a reported $5.6 billion over 12 years for the college football playoff, which starts this season.

The Associated Press contributed to this report.