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NCAA appeals district court decision in O’Bannon v. NCAA

On November 14, 2014, the National Collegiate Athletic Association (“NCAA”) filed a brief in the Ninth Circuit challenging a district court’s injunction on the enforcement of NCAA rules barring college athlete compensation as violating the federal antitrust laws. This blog previously covered O’Bannon v. NCAA here and here.

In its brief, the NCAA frames this case as about “how to regulate intercollegiate athletics,” a decision that the NCAA argues properly belongs to it and its members – and not the courts. The district court concluded that student-athletes are entitled to compensation for the use of their likenesses in broadcasts and related materials, and that a contrary result would violate the Sherman Act. The NCAA posits that the district court’s holding no less than “supplanted the judgment of the NCAA and its members” and “vitiate[d] amateurism.”

As it did in the district court, the NCAA on appeal stresses the procompetitive nature of its commitment to amateurism: integrating student-athletes into the educational community means they can take advantage of the college experience, which widens consumer choice by creating a distinct game that many fans prefer to professional sports. The NCAA emphasizes that barring athletes from being paid ensures that they remain students, rather than professionals. Having existed for decades, the NCAA continues, this model is an “integral part” of the NCAA’s mission and the educational experience.

The NCAA relies in large part on the Supreme Court’s 1984 decision in NCAA v. Board of Regents. There, the Supreme Court noted that “identification of [the NCAA’s] ‘product’ with an academic tradition differentiates college [sports] from and makes it more popular than professional sports to which it might otherwise be comparable.” The Court further stated that “to preserve the character and quality of the ‘product,’ athletes must not be paid”; and that by maintaining such amateurism rules, the NCAA’s “actions widen consumer choice … and hence can be viewed as procompetitive.”

The NCAA maintains that the district court erred in characterizing the quoted language as dicta. According to the NCAA, under Board of Regents, amateurism rules are valid as a matter of law. In particular, the NCAA challenges the district court’s observation that “the college sports industry has changed substantially” since Board of Regents  was decided, accusing the district court of “yearn[ing] for what never was.” As the NCAA contends, college sports have always  been big business.

The NCAA’s brief advances three other main arguments. First, the NCAA argues that amateurism rules do not implicate the Sherman Act because they do not regulate “commercial” activity, but rather “define who may participate” in college-sponsored athletics, an activity motivated by non-commercial considerations.

Next, the NCAA contends that plaintiffs have suffered no antitrust injury due to the lack of any preexisting entitlement to the sought-after compensation. Specifically, the NCAA points out, neither the plaintiffs nor the district court identified a law or court decision recognizing a “publicity right” for participants in a live sports broadcast. Even if such a right existed, the NCAA submits, the First Amendment and the Copyright Act would preempt its enforcement.

Finally, the NCAA contends that the district court erroneously “undervalue[ed]” the procompetitive benefits of barring student-athlete compensation. Allowing even a limited amount of deferred compensation for the broadcast use of an athlete’s name, image, and likeness would “blur the clear line” between college and professional sports, depriving young athletes of a choice between the two, undercutting competition.

The appeal is expedited in light of the district court’s permanent injunction, scheduled to take effect on August 1, 2015. The plaintiffs’ brief is due by January 21, 2015, and the NCAA’s reply brief is due by February 11. Needless to say, the appeal’s outcome will have dramatic consequences for the collegiate sports landscape, as it will decide whether future athletes may receive compensation for time spent representing their schools – or, in other words, whether “amateur” also functionally means “professional” under the antitrust laws.