NCAA Being Sued By Former Players Who Find Themselves Being Used In Video Games

Not many people remember Ed O'Bannon for his exploits on the basketball court. But if he has his way, his name may end up as one of the most memorable in college sports history, primarily because he could end up being the one who changes college sports history.

O'Bannon was a star forward on the 1995 UCLA Bruins basketball team that won the national championship. He had a short, non-spectacular career in the NBA, and he now sells cars in Las Vegas. Several years ago, he noticed a player with his number, stats, and movements (but not his name) as part of a EA Sports NCAA basketball game. And O'Bannon kind of wondered why he wasn't getting any money from the use of his likeness.

Thus he launched a class-action antitrust lawsuit against the NCAA, and the licensing arm of the NCAA, for unauthorized use of his likeness and for engaging in anti-competitive behavior. The NCAA tried to have the case dismissed, but two weeks ago, a federal district court judge in California refused to dismiss the case, and now the NCAA is beginning to go into a kind of panic mode.

At issue is a piece of paper slipped into every scholarship package that must be signed by every college athlete.  The slip of paper is known as Form 08-3a, and it must be signed and returned to the NCAA before a player can play. This form contains language granting the NCAA and the universities authority to use the player's name and image to promote various NCAA sporting events. The catch is, there's no way for this clause to expire. And as such, there's no way for the players to ever regain control of their identities while the NCAA continues to earn dollars into perpetuity.  

"That's basically what they're claiming," Matt Mitten, Professor of Law and Director, National Sports Law Institute, Marquette University Law School, tells Hair Balls. "'You guys are reaping millions and we're not getting anything.'  That's the bottom line on it."

O'Bannon's case is premised in antitrust law which is meant to eliminate anti-competitive practices that restrict trade and commerce. He's got to prove that there's an agreement among the schools, and that this agreement is an unreasonable restraint of trade -- i.e. the schools have joined together to prevent O'Bannon from entering into agreements that would allow him to make money off of his name.

"You can certainly prove that there's an agreement among the schools. No question," Mitten said. "This is pursuant to that. Is it an unreasonable restraint of trade? Typically courts have upheld NCAA rules and agreements that are designed to maintain the quote amateur nature of college sports. But there's also a very significant business component to it. You might have some courts looking at it now and saying, hey, it raises a factual question. Whereas in the past, there were a number of courts that said it was almost a per se rule of legality any NCAA rule that was designed to maintain amateurism."

The NCAA has always been able to get away with just about anything when it comes to college sports because the organization has always been able to claim that what it does is to protect the amateur aspect of college sports. And it's this amateur aspect that has allowed the NCAA and the universities to make lots of money off of the names of guys like O'Bannon. But the genius of O'Bannon's suit is that he's not attacking the amateur myth. He's not demanding that current players be paid salaries. He's only asking that he (and current and former players) get a cut of the money that comes from the use of his identity.

"It's going to basically change the way that college sports does business if the court rules in the players' favor." Mitten says. "Because what has essentially happened is that the NCAA and the universities have been the ones that have gotten the revenues. The players' sole economic benefit has been basically a free education -- of course there's a significant economic value to a scholarship, to getting a college athletic degree."

But is that sole economic factor in the player's favor enough to give the NCAA and the universities the right to a player's identity into perpetuity? It's the risk of an adverse opinion that has the NCAA and the universities worried. University of Houston athletic director Mack Rhoades is following the case, and he does worry about what would happen to the school should O'Bannon win, primarily because the school has been known to the use the likeness of former stars Clyde Drexler and Hakeem Olajuwon.

And if O'Bannon should win -- which is probably still years away -- then what? Professional players are paid when their likenesses are used in advertisements, in video games, fantasy stats, or anything that generates income. Most players are compensated through their players unions, which enter into agreements with the leagues and which then distributes a percentage of the money earned from the marketing efforts back to the players -- some players, like Michael Jordan and Barry Bonds, opted out of such generic agreements and negotiated their own contracts for the use of their likeness.

There is thinking that a trust of some kind would be established to serve the function of the professional player associations. The trusts would help negotiate deals on behalf of the players, and once the players graduated, the money in the trusts would be distributed to those players. The problem will be the past players. The guys like O'Bannon. And Drexler. And Olajuwon. And Vince Young and Earl Campbell and so on and so on. There's going to have be some way to compensate for the past uses of their names.

A conclusion is still years away. The case could still be dismissed. A settlement could still be reached. The NCAA could still win the case. And in the end, Congressional involvement in the BCS will probably amount to nothing in comparison to what Ed O'Bannon accomplishes.

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John Royal is a native Houstonian who graduated from the University of Houston and South Texas College of Law. In his day job he is a complex litigation attorney. In his night job he writes about Houston sports for the Houston Press.
Contact: John Royal