The judge in O’Bannon v. NCAA has ruled that the NCAA violates anti-trust laws by preventing players from being paid for their name and likenesses.
This does not appear to be a ruling however that threatens the core of the NCAA – one in which some surmised a more devastating ruling could bring down the organization entirely. It’s certainly far from the worst case scenario for them. That could be a good thing for the future of college sports video games depending on how the NCAA attempts to proceed.
In a 99-page opinion, U.S. District Judge Claudia Wilken issued an injunction “that will enjoin the NCAA from enforcing any rules or bylaws that would prohibit its member schools and conferences from offering their FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses in addition to a full grant-in-aid.” Wilken said the injunction will not prevent the NCAA from implementing rules capping the amount of money that may be paid to college athletes while they are enrolled in school, but the NCAA will not be allowed to set the cap below the cost of attendance.
The injunction will also prohibit the NCAA from “enforcing any rules to prevent its member schools and conferences from offering to deposit a limited share of licensing revenue in trust for their FBS football and Division I basketball recruits, payable when they leave school or their eligibility expires,” Wilken wrote. Her injunction will allow the NCAA to set a cap on the money held in that trust, but prohibits the NCAA’s cap to be less than $5,000 for every year an athlete remains academically eligible to compete.
Essentially EA could now negotiate with the NCAA for rights to all athlete names and likenesses by paying a lump sum that would then be directed in part to the trust for the players. Athletes who enroll at universities before July 1, 2016 are excluded from the injunction however, which could make it difficult if that means EA wouldn’t be able to get any current players in a deal and would have to wait for future classes.
The NCAA can appeal but the injunction will not be stayed during that process. It’s unclear then for now whether EA Sports would be able to secure the rights they had before, and obtain those of the players, immediately so they could begin production on a college football game for next summer. It may be a bit optimistic to expect that to happen with legal hurdles still in place but it now appears to be a real possibility within the next few years while a more unfavorable ruling for either side likely would have pushed that window back much farther.
The player likeness lawsuit against the NCAA, CLC, and Electronic Arts is the culmination of two high profile filings that were combined as led by Sam Keller and Ed O’Bannon (and O’Bannon now heads it up). It alleges improper use of player likeness through various forms of merchandise and media including video games in which the parties in question conspired to avoid paying players for their rights. Some interesting details and claims regarding the case at hand were revealed when EA was reentered as a defendant after initially being dismissed.
EA originally won a previous case regarding player likeness with the courts ruling video games are artistic works rather than commercial speech and therefore protected by the First Amendment. The Supreme Court in 2011 established forms of media, producing expressive works of art, are not subject to judgments based on incorporating someone’s name or likeness. That dismissed case however, involving Ryan Hart, has resurfaced after an appeals court reversed a decision based on that argument.
Recent uncovered emails have shown that NCAA representatives were well aware that players in games were based off real-life players. At one point the NCAA and EA had nearly reached an agreement to have actual player names included in the products. The EA Locker / Roster Share feature was a fallback option. With momentum clearly on the plantiffs’ side NCAA reps have begun to publicly express concern over the future of collegiate sports. A former EA Sports producer admitted players in NCAA games were based off real athletes.
The discovery of Tim Tebow’s name being in NCAA Football 10 could throw another wrench into EA’s series of arguments. Depositions from former Alabama wide receiver Tyrone Prothro and UConn basketball guard Tate George support the defendant’s reasoning for denying class action certification. The class action hearing resulted in the judge heavily questioning the legitimacy of a potential class and insisting a current athlete be involved. The judge required current athletes be added as plaintiffs for that party to have representation if the case is certified as class action. Six current college football players were added as plaintiffs in mid-July.
This consolidated case in California if certified as class action would go to trial – barring a settlement – and ultimately be the determining factor of how the NCAA proceeds in the future handling broadcasting rights, merchandising, and video games. Should a negative result come down, which one analyst has pegged as being a potential loss of $1 billion for EA, it would likely not just end the NCAA Football series but also with it any realistic possibility of college sports games being made in the future. The trial now is slated to begin June 9, 2014. Appeals following a decision could extend the fight through 2020.
[SEMI-RESOLUTION] EA and the CLC have settled the lawsuit. EA Sports will no longer produce a college football game. Getting out of the lawsuit only cost EA and CLC $40 million. The NCAA also settled their part in the video game aspect of the lawsuit for $20 million.
EA Sports testified in the case that the company would like to make college football and basketball games in the future. The case concluded in June with a ruling expected in August.