Reshaping College Sports

The Case to Find Where Amateurism Ends and the Legal and Economic Rights of College Athletes Begin

Sumner WiddoesCatholic University of America

Columbus School of LawJuris Doctor candidate, 2013

Copyright 2012

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I. Introduction

It is often said that college sports represent the purest form of athletic competition: games

played by athletes for the love of the sport, not for money. The notion goes that student-athletes

proudly don their school colors on the football field or basketball court to challenge rivals and to

represent their universities proudly. They participate as amateurs, a designation defined in 1924

as an athlete who “participates in competitive physical sports only for the pleasure and the

physical, mental, moral and social benefits directly derived therefrom."1 Many college athletes

are awarded scholarships for their athletic prowess and for the notoriety that their on-field

successes bring to their schools. Amateurism as an ideal has endured for more than a century,

and that provides the foundation for a sporting environment that engenders ravenous support for

institutions of higher education from students and alumni.

But the ideal on which the collegiate athletic system is built has gone unchecked for too

long, and the legal rights of the student-athletes designated as amateurs have been violated as a

result. The National Collegiate Athletic Association (NCAA), which currently operates as the

governing body for the intercollegiate athletic competition of its voluntary member institutions,

is a non-profit organization that determines and controls the eligibility of all participating

student-athletes. It remains a tax-exempt organization for its stated goal of furthering the

academic goals of higher education institutions.2 Its bylaws state that those athletes “should be

protected from exploitation by professional and commercial enterprises,” and as such, the NCAA

promulgates rules aimed at protecting the sanctity of the athletes’ amateur status.3 While such a

1 http://fs.ncaa.org/Docs/NCAANewsArchive/2000/association-wide/debate%2Bon%2Bamateurism%2Bhas%2Bevolved%2Bover%2Btime%2B-%2B1-3-00.html2 http://fs.ncaa.org/Docs/NCAANewsArchive/2006/Association-wide/ncaa%2Bresponse%2Bto%2Bfederal%2Binquiry%2Bbacks%2Btax-exempt%2Bstatus%2B-%2B11-20-06%2Bncaa%2Bnews.html3 NCAA Bylaws Sec. 2.9

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noble cause may be celebrated, it relies on the false premise that the NCAA itself does not

exploit the athletes as a professional or commercial enterprise.

The NCAA, in conjunction with its official licensing arm, the Collegiate Licensing

Company (CLC), and its other commercial partners, makes billions of dollars each year

marketing the likenesses of the “amateur” athletes it claims to protect. As it stands currently, the

NCAA’s ownership of those athlete likenesses is fortified by two layers of protection: a

judicially recognized interest in maintaining the amateur status of college sports stars and an

agreement every collegiate athlete is required sign in order to participate in the games. These

two lines of defense, however, are crumbling fast, and two challenges currently pending in the

United States District Court for the Northern District of California seek to debunk the tired myth

of amateurism and invalidate the contract of adhesion that forces college athletes to abandon all

rights of publicity they may have.

What began as Keller v. Electronic Arts, Inc. and O’Bannon v. Nat’l Collegiate Athletic

Assn., has now turned into a consolidated class action suit known as In re NCAA Student-Athlete

Name & Likeness Licensing Litigation, which is scheduled to begin trial in early 2014.4 The case

is just the most recent in a long history of challenges to NCAA autonomy and its control of the

market for student-athlete publicity rights, though several scholars and legal journalists believe it

has great potential to drastically reshape the way college athletics operate. The outcome in that

case may finally debunk the myth of amateurism. But judicial remedies may also fall short of

providing the radical reform necessary to properly categorize these players not as student-

athletes, but as athlete-students.

II. The National Collegiate Athletic Association

4 In re NCAA Student-Athlete Name & Likeness Licensing Litigation, C 09-1967 CW, 2010 WL 5644656 (N.D. Cal. Dec. 17, 2010)

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American colleges and universities have engaged in intercollegiate athletic competition

since the mid-19th century. The tradition began in the Northeast, where several schools that

would later make up the prestigious Ivy League challenged each other to rowing competitions

modeled after the ones between Oxford and Cambridge in England.5 Soon enough, a version of

rugby that came to be known at football took hold, and its popularity rose to the point that

schools began to offer incentives for athletes to compete – “from open payrolls and disguised

booster funds to no-show jobs at movie studios.”6 In its early days, football was particularly

barbaric – a 1905 newspaper article found that 25 college football players had been killed during

that season, a product of the popular offense run by most teams called the “flying wedge.”

Helmets were not mandated until 1923.7

Still, it quickly became apparent that success in interscholastic athletics elevated a

school’s profile, increased its popularity and could help increase alumni donations.8

Furthermore, many school administrators subscribed to the Classical belief that a sound body

helped foster a sound mind.9 Whether such a noble purpose continues to be the driving force

behind the promotion of college sports, or whether it has always been mere pretext for the

commercial gains derived from such exploits, it was certainly the impetus for the formation of a

regulatory body for these intercollegiate competitions. At the behest of President Theodore

Roosevelt, 68 colleges founded the Intercollegiate Athletic Association of the United States

5 Christian Dennie, Changing the Game: The Litigation that May be the Catalyst for Changes in Intercollegiate Athletics, 62 Syracuse L. Rev. 15 (2012)6 Taylor Branch, The Shame of College Sports, The Atlantic, October 20117 Id.8 This trend continues to hold true today: For large and small schools, invitations to post-season tournaments and championship game appearances lead to an increase in applications and royalty awards. http://articles.marketwatch.com/2012-03-14/general/31162686_1_ncaa-tournament-unc-asheville-march-madness9 Branch

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(IAAUS), which became known as the NCAA in 1910, to institute rules and regulations of

college sports.

At the time of its formation, and for several decades thereafter, the organization lacked

any real authority to punish universities for violating its rules. In 1948, the NCAA adopted the

“Sanity Code,” which contained strict regulations regarding financial aid, athlete recruiting,

academic standards, institutional control, and amateurism, and empowered the Association to

expel universities from the NCAA for violations.10 The Association repealed the Code soon

thereafter and appointed Walter Byers as its executive director in 1951. The following year,

Byers helped establish the Membership Committee, which examined complaints about

violations, the Subcommittee on Infractions, which investigated them, and the NCAA Council,

which issued punishments. As a result of the Subcommittee’s first official investigation, the

Council suspended the entire University of Kentucky athletic program in 1952 – including the

defending national champion basketball team – for the subsequent season after the it found that

ten basketball players had received improper financial aid.

When handed down, the Kentucky suspension amounted to little more than a

recommendation from the NCAA. But Byers convinced the university’s athletic director to

accept the penalty in order to establish a precedent of binding authority in the Association, a feat

that, today, is both lauded by the NCAA as its first prominent step toward credibility,11 and

derided by historians as a gambit to legitimize an otherwise futile sentence from an impotent

governing body.12 Byers proceeded to use the Association’s newfound authority to negotiate the

transmission of televised NCAA competitions on behalf of all its member colleges. After timid

10NCAA Chronology of Enforcement, http://www.ncaa.org/wps/wcm/connect/public/NCAA/Enforcement/Resources/Chronology+of+Enforcement11 Id.12 Branch

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threats from the University of Pennsylvania and the University of Notre Dame to televise their

own games quickly dissipated, the NCAA agreed to a deal with NBC on June 6, 1952, to televise

one college football game per week for a fee of $1.14 million.13 The floodgates had opened.

A. The Bylaws and the Student-Athlete Statement

Today the NCAA governs more than 1,200 colleges, universities, athletic conferences,

and sports organizations. Its rules and regulations apply to the 380,000 student-athletes that

participate in intercollegiate competition. In addition, the organization controls the 88

championship tournaments in three divisions, with the exception of the top level of college

football.14 The rules by which all these constituents are bound were formed by volunteer

representatives from member institutions and conferences for the purpose of “maintain[ing]

intercollegiate athletics as an integral part of the educational program and the athlete as an

integral part of he student body,” thereby retaining “a clear line of demarcation between

intercollegiate athletics and professional sports.”15

The Bylaws have evolved to regulate nearly every aspect of a student-athlete’s career an

as amateur, from high school recruiting to college graduation. Article 12 defines acutely what an

amateur is, or rather when an athlete’s status as an amateur is lost: when the individual “uses his

or her athletics skill (directly or indirectly) for pay in any form in that sport.”16 Subsequent

provisions outline seven different forms of prohibited payment, and the rules deem educational

institutions responsible for certifying the amateur status of its athletes.17 Articles 13 and 14

regulate the recruitment and academic standards required for institutions, and Articles 15 and 16

concern financial aid and awards, benefits, and expenses that those athletes may receive. These

13 Id.14 Dennie, at 16.15 NCAA Bylaws, Section 1.3.116 NCAA Bylaws, Section 12.1.2(a)17 NCAA Bylaws, Section 12.1.1.1.2.1

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provisions are all based on the preservation of the amateur status of the “student-athlete,” a term

conceived by Byers in the 1950’s that, in its deliberate ambiguity, highlighted the fact that these

individuals are neither principally students, nor are they athletes for which their services ought to

be compensated.18

In order for a student-athlete to be eligible to play in NCAA-sanctioned competition, he

or she must sign Form 11-3a, the Student-Athlete Statement. This contract contains seven

provisions, including a statement concerning eligibility, an affirmation of amateur status, and a

verification of valid SAT or ACT test scores. Part IV of the agreement is a statement concerning

the Promotion of NCAA Championships, Events, Activities, and Programs, and reads: “You

authorize the NCAA (or a third part acting on behalf of the NCAA...) to use your name or picture

... to promote NCAA championships or other NCAA events, activities or programs.”19 The

duration of the statement in Part IV appears perpetual, can be construed as a total and complete

waiver of all rights of publicity a student-athlete may have in connection with his or her

participation in college sports, and is almost certainly an unenforceable contract of adhesion for

its “take-it-or-leave-it” nature.

B. Legal Challenges to the NCAA

As the popularity of football grew during the 1950’s, 60’s, and 70’s, so too did the size of

the broadcasting contracts the NCAA signed with national television networks, and the

Association’s authority to sanction universities and student-athletes alike. Young athletes were

given the opportunity to attend college, in many cases on full athletic scholarships, while the

football- and basketball-loving masses got the chance to watch their alma maters vie for

intercollegiate athletic supremacy. Byers had built an institution that stood for uncompromising

18 Branch19 NCAA Student-Athlete Statement, Part IV

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integrity and stalwart dedication to the ideal of amateurism while steadily amassing revenue

streams that rivaled professional sports league such as Major League Baseball and the National

Football League.

But the seeming contradiction of those two dual accomplishments soon found its way to

the court system in the form of antitrust challenges against the NCAA. The Sherman Antitrust

Act, 15 U.S.C. § 1, prohibits any “contract, combination ... or conspiracy in restraint of trade or

commerce,” and has been the principal weapon used against the NCAA in challenging the

regulations the organization enforces to ensure that athletes, coaches, administrators and

institutions compete on a level playing field. The law is meant to prevent combinations of

businesses from controlling the market for certain goods by suppressing competition or inflating

prices “to the prejudice of the public interests,”20 and several provisions in the NCAA bylaws

sparked judicial review during the mid-20th century.

Between 1975 and 1983, three different courts found in the favor of the NCAA in

antitrust challenges to varying Bylaw provisions that, in one way or another, restrained the free

trade of services: In Jones v. Nat’l Collegiate Athletic Ass’n, 395 F.Supp. 295 (D.Mass. 1975), it

was an athlete’s college eligibility after he had already played professionally in another country;

in Hennessey v. Nat’l Collegiate Athletic Ass’n, 564, F.2d 1136 (5th Cir. 1977), it was a coach’s

right to work for a particular school that already had the maximum number of coaches allowed;

and in Justice v. Nat’l Collegiate Athletic Ass’n, 577 F.Supp. 356 (D.Ariz. 1983), it was an entire

football team’s opposition to an NCAA-imposed postseason ban. In each case, the challenged

conduct – prohibition of an athlete’s eligibility, limitation on one’s freedom of employment, and

restriction on a team’s participation in postseason competition – was alleged to have an anti-

competitive purpose that was not related to the central objective of the organization, and was

20 Apex Hosiery Co. v. Leader, 310 U.S. 469, 500 (1940)

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overly broad. The Justice Court disagreed, and its Rule of Reason analysis justifying such

conduct has been summarized under the following two-pronged approach:

“(1) they aimed to preserve amateurism in college sports, not to stifle economic competition, and (2) any anticompetitive result they produced was incidental to and offset by the laudable goal of enhancing amateur athletic competition among colleges and universities.”21

Despite this trio of victories for the NCAA and its seemingly golden shield of

amateurism, the increased role of economics was not lost on the Justice court, which recognized

that,

“The NCAA is now engaged in two distinct kinds of rulemaking activity. One type, exemplified by the rules in Hennessey and Jones, is rooted in the NCAA’s concern for the protection of amateurism; the other type is increasingly accompanied by a discernible economic purpose.”22

Though the Court in Justice found that the NCAA’s restriction on the University of Arizona’s

participation in postseason football bowl games fell into the former category, it acknowledged

the latter category in response to a case that had just been decided by the 10th Circuit Court of

Appeals, and which was pending before the Supreme Court.

In June 1982, two of the NCAA’s most prominent member institutions, the University of

Georgia and the University of Oklahoma, brought a complaint against the NCAA in the United

States District Court for the Western District of Oklahoma. Board of Regents v. Nat’l Collegiate

Athletic Ass’n, 468 U.S. 85 (1984), arose in response to a television contract the NCAA

negotiated on behalf of all its member school with national television networks ABC, CBS, and

TBS. Under the agreement, the NCAA would receive $285 million over four years, while the

networks would be permitted to televise a set number of football games chosen by the NCAA.

Georgia and Oklahoma, two of the most successful and popular college football programs in the

21 Brian L. Porto, The Supreme Court and the NCAA: The Case for Less Commercialism and More Due Process in College Sports 37 (University of Michigan Press 2012)22 Justice, 577 F.Supp. at 383.

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country, claimed that the contract restricted their ability to freely negotiate their own television

licenses. After a trial court decision in favor of the universities, and a Tenth Circuit reversal in

favor of the NCAA, the Supreme Court faced the question of whether the non-economic benefit

of maintaining competitive balance in college athletics outweighed the concerns for consumer

welfare that the NCAA’s television contract clearly stifled.

Justice Jon Paul Stevens’ majority opinion held that the NCAA could not provide

adequate economic justification for the anticompetitive effects of its football television plan. In

defending the national television contract, the NCAA argued that the restraint of trade in

question helped preserve the gate ticket value at individual schools’ football games, thus

maintaining steady revenues for all member institutions. Many commentators have suggested

that the case may have been decided differently “had the NCAA relied on its trusted defense of

preserving amateur sports in an educational setting.”23 As such, Board of Regents represents the

sole defeat to NCAA autocracy in regulating college athletics, and may simply amount to a

missed opportunity for the NCAA to preserve stare decisis for a judicially recognized ideal that

had served to justify the organization’s regulations for decades. And the distinction drawn in

Justice between NCAA regulations concerning the protection of amateurism versus those with an

economic purpose is one that appeared have resonated with the high court, and with future

plaintiffs.

Following the Regents decision, individual conferences and universities began to

negotiate their own football television contracts, which rapidly increased in value without the

shackles of NCAA control and the introduction of an all-sports cable news network, ESPN, in

the 1980’s. The legal challenges did not cease, however, and in 1988 the NCAA faced a lawsuit

from Jerry Tarkanian, head basketball coach at the University of Nevada, Las Vegas (UNLV).

23 Porto, at 67-69.

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After the NCAA recommending that the school suspend itself from basketball competition for

myriad violations dating back to the 1970’s, UNLV did just that, placing itself on a two-year

probation with a suspension from postseason play. Tarkanian challenged the sanction under a

federal statute prohibiting a state actor from limiting an individual’s right to due process under

the 14th Amendment of the United States Constitution, arguing that in accepting the NCAA’s

disciplinary recommendation, UNLV’s acquiescence turned the NCAA into a state actor, thus

requiring that it provide its constituents all civil rights provided in the Constitution, including

proper procedural due process.24 The case went all the way to the Supreme Court, but this time

was decided in favor of the NCAA, holding that the organization is not a state actor.25

In the wake of Regents and Tarkanian, the NCAA could be sure about its legal standing:

it was also not subject to the procedural requirements of the 14th Amendment, but it was not

exempt from all antitrust claims. As such, NCAA regulations concerning a “discernable

economic purpose” have remained the target of plaintiff’s challenges. In 2006, the Association

settled a class action antitrust suit brought by current student-athletes claiming that NCAA limits

on athletics-based financial aid restrict the athletes from competing freely for the best aid

packages.26 As part of the settlement, the NCAA made an additional $218 million available for

student-athletes demonstrating financial and/or academic need.27 Two years later, in a suit

brought by former Oklahoma State University pitcher Andy Oliver, an Ohio district court’s

ruling that voided an NCAA bylaw prohibiting the assistance of counsel for college athletes

negotiating professional contracts was vacated after the NCAA subsequently settled the matter

24 42 U.S.C. § 198325 Nat’l Collegiate Athletic Ass’n v. Tarkanian, 488 U.S. 179 (1988)26 See Second Amended Complain for Plaintiff, White v. Nat’l Collegiate Athletic Ass’n, No. CV -06-0999 RGK (C.D. Cal. Sept. 8, 2006)27 Dennie, at 26.

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with the plaintiff.28 The settlement awarded Oliver $750,000 and allowed Bylaw 12.3.2.1 to

stand.29 As a result, those regulations directed at protecting NCAA economic interests persist, but

both the Association and judges are beginning to recognize their fatal flaws.

C. Commercial Partners of the NCAA

The Regents decision may have blown the door off NCAA restrictions in the college football

market, and therefore the organization’s de facto monopoly on the profits derived therefrom, but

college basketball soon came to the NCAA’s rescue. In 1979, two stars captivated the country,

developed a rivalry that would persist for decades, and turned the annual college basketball

championship tournament into a national three-week phenomenon. Those two stars, Indiana

State University’s Larry Bird and Magic Johnson of Michigan State University, squared off in

the title game, which was televised nationally and was viewed by more people than any college

basketball game since.30 At the time, the public’s appetite for college sports was clear, and since

then the revenue generated from March Madness has increased stupendously – in 2010 the

NCAA signed a 14-year, $10.8 billion deal with CBS and Turner Sports for the multimedia and

marketing rights to the basketball tournament. When combining the television contract with

ticket sales and sponsorship contracts, the NCAA derives 96 percent of its annual revenue from

the March Madness tournament.31

Further, there are myriad licensing opportunities on which the NCAA and its member

institutions seek to capitalize, and to do that, they entrust the Collegiate Licensing Company

28 Oliver v. Nat’l Collegiate Athletic Ass’n, 2009-Ohio-6587, 155 Ohio Misc. 2d 17, 2429 NCAA Bylaw 12.3.2.1 Presence of a Lawyer at Negotiations. A lawyer may not be present during discussions of a contract offer with a professional organization or have any direct contact (in person, by telephone or by mail) with a professional sports organization on behalf of the individual. A lawyer’s presence during such discussion is considered representation by an agent.30 http://tvbythenumbers.zap2it.com/2011/04/04/butler-boon-or-bane-for-ncaa-finals-ratings-historical-ratings-poll/88034/31 http://online.wsj.com/article/SB123664681664078731.html

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(CLC), a division of international media agency IMG. CLC is the licensing arm of the NCAA

and all of its championship games and tournaments. In addition, the company manages all

service and trademarks for over 200 colleges, nine conferences and 24 football bowl games.32

Altogether, CLC controls the $4 billion market for NCAA- and college-branded merchandise,

including school apparel, sports memorabilia, and video games featuring school logos, fight

songs, and NCAA trademarks. The company also licenses the massive video library owned by

the NCAA, adding additional revenue from the re-broadcast and re-purposing of old college

game footage.

The most prominent manufacturer of college video games is EA Sports, maker of the NCAA

Football franchise. Since 1998, EA Sports has released the game under this title each summer in

advance of the fall football season. Under its agreement with CLC, EA is permitted to use the

names, logos, and marks of the NCAA and its member institutions, but it is prohibited from

including the names of student-athletes as characters within the games. Still, NCAA Football is

marketed as a realistic portrayal of the college football experience, and the features within the

game allow users to play with historically popular teams and players – those whose NCAA

eligibility has already lapsed and are presumably no longer bound by the amateurism rules.

The NCAA has enjoyed more than a century of prosperity, and its prominence will persist so

long as the American higher education system remains in tact. Outside of religion, few

institutions engender such loyalty and passion as American alma maters, and intercollegiate

athletics is the most visible and visceral forum to exercise such emotion. The NCAA has

capitalized brilliantly on that support, effectively creating an industry that serves consumers,

supports the higher education system, and provides opportunities for individual student-athletes

that they may not have been able to otherwise afford. But the time may be upon the NCAA to

32 http://clc.com/clcweb/publishing.nsf/Content/Home.html

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acknowledge that its mission may not be entirely altruistic, and that its operation may not be

entirely equitable. And if the organization fails to do so on its own, a judge may have to do it for

them.

III. In re Student-Athlete Name & Likeness Litigation

In 2009, two former NCAA Division-I athletes brought separate actions in federal district

court against the NCAA, CSC, EA and other commercial partners. Both complaints primarily

concerned the continued exploitation of former athletes’ names and likenesses by the defendants:

1) That individuals who are no longer eligible to compete in NCAA games (and therefore no

longer subject to NCAA amateurism rules) have a continued market value attached to their

names and likenesses when they were undergraduate competitors, 2) that the defendants continue

to use those likenesses in their commercial products, and 3) that those former athletes are

precluded from remuneration for such use.

The first claim, brought by Sam Keller, former quarterback at Arizona State University

and the University of Nebraska, concerned alleged violations of the plaintiffs’ rights of publicity

under Indiana and California laws. The second, filed by former star UCLA basketball player Ed

O’Bannon, was an antitrust suit brought on behalf of a substantially larger class of former NCAA

student-athletes. O’Bannon’s case alleged that the misappropriation and exploitation of student-

athletes’ names and images, and defendants’ refusal to compensate the former student-athletes,

amounted to a conspiracy to unreasonably restrain trade. The claims have since been

consolidated into a single complaint that is not scheduled to go before a jury until 2014, but some

of the judicial orders on pretrial motions, the documents released as part of the discovery

process, and the prodigious media attention given the case thus far lead many to believe that this

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will ultimately be the case that changes the way the NCAA operates, and that finally gives

student-athletes a piece of the pie that they help make.

A. Right of Publicity Litigation

When Sam Keller filed his class action complaint in 2009 against EA Sports, the NCAA

and the CLC, he was more than a year removed from his final college football game. Keller’s

college career began in 2003, when he accepted an athletic scholarship from Arizona State

University (ASU) and signed NCAA Form 08-3a (now Form 11-3a). Entering college, Keller

was a highly acclaimed quarterback, and during his three years at ASU, Keller did not

disappoint. Wearing the number 9 jersey, Keller earned the Sun Bowl Most Valuable Player

award as a sophomore, and during his junior season, he threw for more that 2,000 yards and 20

touchdowns in seven games before an injury cut his season short. In his complaint, Keller’s

alleges that had he not been injured that season, he likely would have entered the NFL Draft and

been considered a highly rated prospect.33

In 2006, Keller transferred to Nebraska and was forced to sit out from football

competition for one year, pursuant to NCAA Bylaw 12.5.1.34 During that “red-shirt” year, Keller

wore the number 5 jersey while participating on the football practice squad. Shortly before his

first game with Nebraska in the fall of 2007, Keller switched his jersey number back to the

number 9 that he wore at ASU.35 In that final year of college eligibility, Keller started nine

games for the Cornhuskers, setting school records for the most passing yards per game and the

highest passing completion percentage in one season. But Keller’s season ended prematurely

33 In Re Student Athlete Name and Likeness Litigation, C 09-01967 CW, Second Amended Complaint, ¶ 232.34 NCAA Bylaw 12.5.1 Residence Requirement – General Principle. A student who transfers ... to a member institution from any collegiate institution is required to complete one full academic year of residence at the certifying institution before being eligible to compete for or to receive travel expenses from the member institution...35 Second Amended Complaint, ¶ 235-36.

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once again when he broke his collarbone during a 28-25 loss to the University of Texas in

October 2007. His NCAA eligibility expired at the end of that season.

The basis for Keller’s claim is that EA Sports, maker of the NCAA Football video game

franchise, knowingly and unlawfully used his and his fellow class members’ images in their

video games and continue to generate sales revenue from that game. The supporting premise is

that EA Sports bases its characters in the games on real-life college football players, and that

those virtual characters are so similar to their real-life student-athlete doppelgangers – including

facial features, body types, skin tone, hometown and jersey number – that their uses amount to

misappropriations of the plaintiffs’ publicity rights. Keller claims violations of his right of

publicity under Indiana Code § 32-36-1-7, California Civil Code § 3344(a) and the California

common law publicity right. Under Indiana law, a person obtains a property interest in his or her

image and likeness when that likeness has commercial value.36 California’s publicity right

statute, however, includes no such threshold, although in order to make a statutory claim, the

plaintiff must allege knowing use of his or her likeness by the defendant.37

Keller’s complaint provides several striking examples of nearly identical digital

reproductions of former NCAA student-athletes in EA Sports video games, but also focuses on

the unique nature of his own history to satisfy the knowing requirement in the California statute.

The version of EA Sports’ NCAA Football game sold in advance of and in preparation for the

2006 college football season – Keller’s last at Arizona State – included a starting quarterback on

the Sun Devils’ roster with the same physical characteristics as Keller, as well as his No. 9

jersey, his play style (pocket passer) and his year in school. The next year’s game version did

not include such a character on Arizona State’s or Nebraska’s team, but the subsequent version,

36 Ind.Code §32-36-1-637 Cal.Civ.Code § 3344

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NCAA Football 2008, did. In fact, the Nebraska starting quarterback in that game, which was

allegedly researched and created in the spring of 2007, before Keller officially switched back to

his No. 9 jersey, appears nearly identical to the ASU starting quarterback character from the

2006 game (Keller).38 In addition, that 2008 character wears the No. 5 jersey, a number never

worn by Keller in an actual game, but only during his red-shirt season and during spring practice

in 2007, when the game was actually researched and built.

The similarities between Keller and the computer-generated quarterback characters on the

ASU and Nebraska football teams appear to be more than a mere coincidence. After the district

court denied EA’s motion to dismiss in February 2010, discovery requests yielded documents

indicating not only that EA used all the attributes and jersey numbers of actual college football

players in its games, but that the NCAA was made aware of such concerted efforts to create

games that mirrored reality.39 Internal emails between NCAA executives (including former

president Myles Brand) dating back to 2003 include conversations regarding the possibility of

allowing EA to include the athletes’ names in the games, and a game user’s ability to upload

those names using third-party codes. The documents, which also help establish Keller’s claim

against the NCAA for its violation of the provisions in Form 08-3a prohibiting the unauthorized

use of a student-athlete’s name or picture by the NCAA or any third party, provide nearly

dispositive proof that EA recreated, and thus uses, the student-athletes’ likenesses in their games.

B. Antitrust Litigation

Shortly after Keller initiated his suit, former UCLA basketball star Ed O’Bannon

filed a complaint against the NCAA and CLC for conspiring to restrain trade in violation

of Section 1 of the Sherman Act. The antitrust suit is larger in scope than Keller’s with

38 Second Amended Complain ¶ 235-4039 http://www.usatoday.com/story/sports/ncaab/2012/11/13/college-basketball-ncaa-ea-sports-athlete-obannon-likeness-suit/1701593/

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regard to the defendants’ conduct, but it primarily concerns the same issue: whether the

defendants exploit former student-athletes’ names and likenesses, and agree not to

compensate those former athletes for such use. As such, eleven former college athletes,

most of who enjoyed great success or were members of particularly noteworthy teams

during their college careers, joined O’Bannon as co-plaintiffs in the suit. The continued

relevance of those athletic achievements is the primary concern of O’Bannon and his co-

plaintiffs.

In 1995, Ed O’Bannon played power forward for the UCLA Bruins and led that

team to a national championship. In the final game, O’Bannon scored 30 points, had 17

rebounds, won the Most Valuable Player award for the finals, and was photographed

cutting down the basketball net with his left arm extended into air and a massive grin

across his face following the team’s victory. The game and that photograph were instant

classics – O’Bannon finished his legendary college career with one of the most dominant

performances in March Madness history, and that triumphant snapshot was displayed on

the front cover of that week’s Sports Illustrated.

Since then, O’Bannon’s alma mater and the NCAA have celebrated his

achievements by selling DVDs of the 1995 championship game, as well as other games

during that season.40 In addition, the NCAA and CLC have opened new revenue streams

in television and digital video distribution, allowing consumers to stream those games on

services such as Netflix, or watch replays of the games on ESPN Classic, a subsidiary of

ESPN that purchases the right to rebroadcast those games from CLC.41 As digital video

technology progresses, the NCAA continues to offer new ways for consumers to watch

40 The two-DVD box set of the 1995 NCAA Men’s Basketball Final Four can be purchased from the NCAA online store for $39.99. Second Amended Complaint ¶ 46.41 Second Amended Complaint ¶ 49, 53.

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O’Bannon and his former UCLA teammates from computers and mobile devices, the

proceeds of which go to the Association and their commercial partners.

O’Bannon’s co-plaintiffs present similarly compelling arguments that the

defendants continue to use the names and likenesses of former athletes for commercial

gain without compensating those individuals. Alex Gilbert, for example, was the starting

forward on Larry Bird’s Indiana State team that lost in the highest-rated game of all time,

as noted above. Countless books and documentaries have been made about that game,

and the NCAA continues to license DVDs and other network television replays of it to

the organization’s commercial benefit. Harry Flournoy, David “Big Daddy” Lattin, Thad

Jaracz, and Bob Tallent all participated in the 1966 NCAA Championship game between

the University of Kentucky and Texas Western University, a game that is widely

considered the most important college basketball game in history because it was the first

time a team starting five African-American players won the championship.42 That game

was the subject of the 2006 Walt Disney Pictures movie “Glory Road” and has also been

the subject of countless documentaries, books and DVD sets, all licensed by the NCAA.

Finally, Eric Riley played for the University of Michigan basketball team from

1989-93 with a group of five players known famously as “The Fab Five.” That nickname

was given to five freshmen that joined the team in 1991 and shook the traditions of

college basketball to their core. As USA Today described the team in 2002, “Their style

was breathtaking; their trash-talking, baggy-shorts style endearing; their influence

profound, even to this day.”43 And just as with the 1966 Texas Western team, 1979

Indiana State team, and 1995 UCLA Bruins, the NCAA and its partners have continued

42 http://www.washingtonpost.com/wp-dyn/content/article/2006/01/12/AR2006011202357.html43 Second Amended Complain, ¶ 112.

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to market products that directly depict the on-court endeavors of the Fab Five and their

Michigan Wolverine teammates.

The nature of O’Bannon’s claim, however, is not simply that the NCAA and CLC

continue to use his and his co-plaintiffs’ likenesses, but that the defendants conspire with

each other and their commercial partners to unreasonably restrain trade in the market of

student-athlete publicity. The basis for this claim is in the Student-Athlete Statement and

NCAA Bylaw 12.5.1.1, which outlines the promotional activities in which the NCAA is

permitted to use the name or picture of the athlete (pursuant to Part IV of the Statement).

O’Bannon argues that the Statement and Bylaws allow the NCAA to enter into

agreements with CLC and other partners to sell licenses to which the plaintiffs do not

consent or receive compensation. That, he claims, amounts to an unreasonable restraint

of trade in violation of Section 1 of the Sherman Act.

On the same day that EA’s motion to dismiss was denied with regard to the Keller

complaint, the same district court judge issued the same ruling on the NCAA and CLC’s

motion to dismiss O’Bannon’s claim, concluding that the plaintiff had plead sufficient

facts to make out a prima facie case for antitrust violation. That ruling was based on the

Court’s preliminary Rule of Reason analysis, rather than applying the per se rule because

the alleged conduct is not a horizontal agreement among direct competitors and because

the restraint of trade in question is novel to the court. Applying the Rule of Reason, the

Court found that the O’Bannon’s complaint showed the existence of a market for player

likenesses, and that the defendant’s agreement produced significant anticompetitive

effects on the class members’ abilities to compete in that market.44

44 Order on NCAA’s and CLC’s Motion to Dismiss, 2010 WL 445190

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The rulings in favor of Keller and O’Bannon in February 2010 allowed attorneys

on both sides to initiate discovery, where both parties hoped to uncover more damaging

evidence of knowing use of player likenesses, active collusion among the defendants and

bad faith in dealing with student-athletes. While documents to that end will undoubtedly

continue to surface until trial, which is schedule to begin in early 2014, the significance

of the February 2010 orders should not be understated: That Keller and O’Bannon’s

claims have judicially recognized merit and will not be dismissed merely by an archaic

notion that preserving amateurism justifies economic malfeasance. In fact, because every

plaintiffs in this case is a former student-athlete, such a justification is wholly

inapplicable, and the claims will proceed to judgment on their merits.

That the NCAA and its commercial partners profit off the names and likenesses of

amateur student-athletes may end up being irrefutable. And if so, the Court may well

find that such exploitation amounts to a violation of antitrust law, especially with regard

to compensation for former student-athletes. But the inquiry certainly does not end there,

because whether the antitrust plaintiffs are awarded treble damages or the publicity rights

plaintiffs handed compensatory damages, the structural question of allocation of profits

from college sports remains. If successful, In re Student Athlete Name and Likeness

Litigation could serve as the catalyst for a comprehensive reformation of college sports

and of the legal status of its student-athletes.

IV. The Solution

By now, the NCAA has taken notice of the shifting attitudes toward its commercial

operation. One court has already ruled that a provision of the NCAA Bylaws is unenforceable,

and after the Association’s settlement in the White case, it may finally recognize its own

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vulnerability to antitrust liability as well. Furthermore, public statements noted in the O’Bannon

and Keller suit signify recognition on the part of the NCAA that the ideal of amateurism may

need adjustment in this age of massive commercialism. In his 2009 State of the Association

Speech, NCAA Vice President Wallace Renfro said “In the case of commercialism, the extremes

of unrealistic idealism and crass commercialism are not the right courses of action, but between

them – somewhere – there is an acceptable balance point.”45 In addition, former NCAA

President Myles Brand wrote in September 2008, “the right of publicity is held by the student-

athletes, not the NCAA,”46 and in a 2010 e-mail from Renfro to current NCAA President Mark

Emmert, Renfro suggested, “Maybe we don’t call them student-athletes any longer and just refer

to them as students.”47

These quotes do not prove this case, but may help in formulating a just solution. The

Keller and O’Bannon classes seek statutory treble damages for the antitrust violations, as well as

compensatory damages for the violations of publicity rights, restitution and disgorgement for

unjust enrichment. In addition, the Court is scheduled to rule on a motion to expand the plaintiff

class to include current student-athletes so that they may get a declaratory judgment voiding the

Student-Athlete Statement as an unconscionable contract of adhesion and establish a constructive

trust for the profits derived from the use of their names and likenesses during their college

careers. Such an award, if granted, would amount to financial windfall for the plaintiffs, but it

might also fall short of addressing the underlying structural problems that brought this litigation

on in the first place.

A. The Extremes: Grant-in-Aid and Employment

45 Second Amended Complaint, ¶ 29.46 Second Amended Complaint, ¶ 28.47 http://espn.go.com/espn/otl/story/_/id/8396753/ncaa-policy-chief-proposes-dropping-student-athlete-term

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Currently, student-athletes are eligible to receive full athletic scholarships that cover the

costs of tuition, room, and board. In addition, the NCAA distributes roughly sixty percent of its

revenue directly to member institutions and conferences in one of five different funds: the

Basketball Fund, Academic Enhancement Fund, Student-Athlete Assistance Fund, Sports-

Sponsorship Fund, and Grant-in-Aid Fund.48 Of the $478 million that was distributed under this

system in 2011, more than 40 percent went to the Basketball Fund, a direct reward to colleges

whose basketball programs sustain success over a period of six years. The next largest portion,

roughly 39 percent, goes to the Grant-in-aid Fund, which, along with the Student-Athlete

Assistance Fund, is meant to provide financial support for the schools with the most grant-in-aid

eligible students.

The sufficiency of these funds to provide student-athletes the financial support to attend

college has been questioned recently, and the NCAA responded to such concerns in 2011.

Following a summit of college presidents during the summer of 2011 called the Knight

Commission, Emmert and the NCAA Board of Directors approved a plan allowing universities

to award multi-year scholarship (where before athletes were only awarded single-year

scholarships) and provide student-athletes with an additional $2,000 in institutional aid.49 The

increase in aid packages was meant to more fully reflect a student’s actual cost of attendance,

which the Knight Commission found to be in excess of the grant-in-aid packages offered at the

time. Still, it may not suffice for many athletes, and is currently awarded by the NCAA based on

a school’s number of scholarship athletes, not the need of individual students.

The status quo has drawn consternation from universities and student-athletes alike, and

the loudest cries come from supporters of a much more robust pay-for-play system, whereby

48 http://www.ncaa.org/wps/wcm/connect/public/NCAA/Finances/Finances+Distributions49 http://chronicle.com/blogs/players/ncaa-approves-scholarship-increases-and-multiyear-grants-for-athletes/29162

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universities would directly compensate student-athletes for their athletic exploits. The NCAA

has repeatedly disavowed such a system,50 and it seems highly unlikely that a court would

endorse a structure in which student-athletes are legally akin to university employees.51 Such

reform would introduce issues of labor law, collective bargaining, medical benefits and pension

plans, and could seriously jeopardize the non-profit status of the NCAA as an education-based

institution. The NCAA will not and should not allow such a proposal to gain momentum. But in

order to do so, and to thereby salvage what remains of the cherished-though-fallacious ideal of

amateurism, it must consider creative alternatives that confer real benefits to student-athletes for

the commercial gains they bring to their respective universities and the NCAA.

B. The Middle Ground: Sports Majors and Modified Amateurs

Back in the halcyon days of the mid-20th century when the NCAA enjoyed unfettered

success against antitrust challenges, the courts consistently found that amateurism played a

critical role in the promotion of a healthy and fulfilling educational experience. However,

decades of commercial success has since blurred the bond between those two ideals to the point

that, now, factions of fans and commentators claim such a connection is merely illusory, and

some propose the altogether abandonment of such pretext. Sarcasm and hyperbole aside, the

NCAA still must reassess its role as facilitators of education first, and athletic commissioners

second. One plan that could reassert the power of the “student-athlete” moniker is to introduce a

new field of study geared especially to college athletes: Sports Majors.

The curriculum of a major Sports Studies, which has also been considered and discussed

by renowned Washington Post columnist Sally Jenkins52 and by The Chronicle of Higher

50 http://usatoday30.usatoday.com/sports/college/2011-02-13-ncaa-emmert_N.htm51 Dennie, at 46.52 http://www.washingtonpost.com/sports/ncaa-colleges-should-consider-offering-sports-as-an-academic-major/2011/10/05/gIQAF6ijOL_story.html

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Education,53 could include courses in sports psychology, leadership, media studies, sports law,

nutrition, kinesiology, coaching skills, and business development. It would draw on the

expertise of professors in sociology, biology, communications and business, and it would also

include classes taught by coaches (providing additional justification for their multi-mullion-

dollar salaries). But most importantly, the course load would be more tailored to the interests of

student-athletes and the potential career paths that they may follow. If intercollegiate athletics

are to remain categorized as merely extracurricular activities, then student-athletes should have

the same opportunity to supplement those activities with full-time training provided by their

educational institutions. Furthermore, this type of curriculum would allow the NCAA to present

a pro-competitive goal of promoting scholastic opportunities to offset the anticompetitive nature

of amateur athletics.

The other potential solution may be to redefine the student-athlete as possessing a legal

status somewhere between amateur and professional.54 This distinction of “modified amateurs”

would require recognition that many college athletes – football and men’s basketball players in

particular – are simply not amateurs. Similarly, it would demand restraint from considering

those players full professionals because they remain students. This new class of individuals

would not be compensated by universities or be permitted to unionize as full employees. But

they would have the ability to compete in the marketplace for the licensing of their likenesses,

and would receive greater due process in challenging NCAA regulations.

As “modified amateurs,” student-athletes would retain the connection with universities as

primarily students, but acquire the ability earn compensation from third parties. This is akin to

the undergraduate music student recording an album for commercial use, or a biology student

53 http://chronicle.com/article/End-the-Charade-Let-Athletes/135894/54 Dennie, at 50-51.

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doing extracurricular research for a professor and sharing the revenue from the resulting

publication. It mitigates the artificial distinctions between student-athletes and their non-athlete

peers, whose extracurricular income is not regulated by the NCAA or the university. This

proposal, along with the introduction of sports majors, represents a fair, practical solution in light

of the potentially devastating result of pending litigation against the NCAA and its commercial

partners.

VI. Conclusion

The revenues derived from college athletics, particularly men’s basketball and football,

have soared to astronomical levels, and will continue to do so as technology evolves and

consumers are steadily offered new means of following their favorite school’s teams. This is not

bad thing, per se. But the pending litigation against the NCAA, CLC and EA Sports will only

continue to uncover the shocking evidence of a market gone mad, where a cadre of nonprofit and

for-profit firms conspire to ensure the laborers on whose backs their fortunes are made remain

uncompensated. Whether through judicial decree, legislative action, or private initiative, the

system must change, and the pressure to do so continues to mount. In the end, the hope is that

the joy of the games, which draws so many fans, remains.

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Bibliography

Statutes

42 U.S.C. § 1983

15 U.S.C. § 1

Cal.Civ.Code § 3344

Ind.Code §32-36-1-6

Cases

Apex Hosiery Co. v. Leader, 310 U.S. 469, 500 (1940)

Board of Regents v. Nat’l Collegiate Athletic Ass’n, 468 U.S. 85 (1984)

Hennessey v. Nat’l Collegiate Athletic Ass’n, 564, F.2d 1136 (5th Cir. 1977)

In re NCAA Student-Athlete Name & Likeness Licensing Litigation, C 09-1967 CW, 2010 WL 5644656 (N.D. Cal. Dec. 17, 2010)

Jones v. Nat’l Collegiate Athletic Ass’n, 395 F.Supp. 295 (D.Mass. 1975)

Justice v. Nat’l Collegiate Athletic Ass’n, 577 F.Supp. 356 (D.Ariz. 1983)

Nat’l Collegiate Athletic Ass’n v. Tarkanian, 488 U.S. 179 (1988)

Oliver v. Nat’l Collegiate Athletic Ass’n, 2009-Ohio-6587, 155 Ohio Misc. 2d 17

White v. Nat’l Collegiate Athletic Ass’n, No. CV -06-0999 RGK (C.D. Cal. Sept. 8, 2006)

Articles

Christian Dennie, Changing the Game: The Litigation that May be the Catalyst for Changes in Intercollegiate Athletics, 62 Syracuse L. Rev. 15 (2012)

Taylor Branch, The Shame of College Sports, The Atlantic, October 2011

NCAA Documents

NCAA Chronology of Enforcement, http://www.ncaa.org/wps/wcm/connect/public/NCAA/Enforcement/Resources/Chronology+of+Enforcement

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2009-10 NCAA Division I Manual, http://www.ncaapublications.com/productdownloads/D110.pdf

NCAA Form 11-3a, Student-Athlete Statement,http://grfx.cstv.com/photos/schools/bc/genrel/auto_pdf/2011-12/misc_non_event/SAstatement11-12.pdf

Books

Brian L. Porto, The Supreme Court and the NCAA: The Case for Less Commercialism and More Due Process in College Sports (University of Michigan Press 2012)

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