O'Bannon v. NCAA: Is This the End of College Sports?

A California federal judge last month struck down many of the amateurism rules of the National Collegiate Athletic Association on antitrust grounds in a ruling that could have far reaching consequences for the future of big-time college athletics. 

From major television contracts, to advertising and merchandising to packed 100K plus stadiums every Saturday, there is no question that major college athletics is a cash cow and a serious business. In the past five years, the NCAA has signed a $10.8 billion deal with CBS and Turner Broadcasting for rights to the NCAA college basketball tournament and the new college football playoff entity signed a $5.64 billion deal with ESPN.

Still, despite college athletics’ gradual transformation into a major business, the NCAA has steadfastly clung to rules treating its “student athletes” as amateurs preventing them from being compensated beyond their school scholarships or from cashing in on the money earned broadcasting games or even being featured in popular video games.

That is at least until now…

U.S. District Judge Claudia Wilken ruled that the NCAA’s rules preventing athletes from being paid for the use of their names, images and likenesses barring the institution from continuing to impose the rules on its member schools.

Several current and former "student athletes" brought the antitrust action against the over-100-year-old NCAA arguing that its rules barring student athletes from receiving revenue from the sale of licenses to use student-athletes' names, images and likenesses for game telecasts and in video games violates the Sherman Antitrust Act.

But the reality of the situation is that the landscape of college athletics been changing for some time. Gone are the days of rooting for your alma mater for the sake of school pride or nostalgia, and gone are the days of admiring the sacrifice and commitment of amateur athletes leaving it all on the field, or court, for the honor donning school colors. College athletics has become a business and the athletes participating want and likely deserve a piece of the profits.

Certainly there are still many major college athletes who either choose not to "go pro" or at least just cannot make the leap. For these "student athletes" a degree from a major university may help them build a career outside playing a sport. (note I emphasize may, even non-athletes who go to college solely for academic purposes are still struggling in today's economy.) Still, for the most part, those who are offered the opportunity to play college football and basketball at the highest level, almost always take it.

Still, the ruling fell far short of treating “student athletes” as professionals or being paid salaries for playing college sports but opens to door to greater scholarships and stipends to cover the real cost of school and to allow them to earn money for the use of their likeness.

The judge recommended that schools hold money earned for the use of the likeness in trust until the players graduate so long as it is distributed equally based on licensing rather than athletic performance. 

However, the judge rejected the players’ argument that they should earn money through endorsements and promotions saying that would “undermine the efforts of both the NCAA and its member schools to protect against the ‘commercial exploitation’ of student-athletes.”

The ruling begs the question of whether the college amateur athletics model is no longer viable. It may have worked before college athletics were bringing in millions of dollars, but how much longer will schools and conferences be able to profit off so-called "student athletes?"

While the full implications of the ruling are yet to be determined and litigation is likely not over yet, it is clear that the landscape of college athletics is changing.