Entertainment & Sports Law

Judge rules ban on payments to college athletes is an antitrust violation

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A federal judge in Oakland, California, has ruled that the NCAA’s ban on payments to college athletes for use of their names and images is an antitrust violation.

The 99-page ruling on Friday by U.S. District Judge Claudia Wilken said the NCAA could cap the payments to athletes, though the cap could be no less than $5,000 for each year a student is academically eligible to compete; colleges could pay less than the top amount or nothing at all, as long as they don’t conspire in setting the amounts; and the money could be placed in trust funds. The New York Times, the Los Angeles Times and the Wall Street Journal (sub. req.) have stories. She issued an injunction on the current payment ban that would take effect on July 1, 2016.

The ruling applies to football players in the top 10 conferences and all Division I men’s basketball players, according to the New York Times.

Wilken noted the NCAA’s own expert had testified that he would not be troubled if schools were allowed to make $5,000 payments, held in trust, to student-athletes. “None of the other evidence presented at trial suggests that the NCAA’s legitimate procompetitive goals will be undermined by allowing such a modest payment,” Wilken said.

The lead plaintiff in the 2009 class action is former UCLA basketball star Ed O’Bannon, who noticed a video game avatar that looked like him. The suit argued that ban on payments should not apply after college when the “spirit of amateurism” is no longer at risk.

The NCAA says it will appeal, according to another story by the Wall Street Journal (sub. req.). In a statement, NCAA chief legal officer Donald Remy said the NCAA remains confident it has not violated any antitrust laws. He said the NCAA was encouraged because Wilken recognized NCAA authority to establish rules on player compensation, and because she rejected the plaintiffs’ suggestion that college athletes could directly market their names and images.

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