Sharing the Wealth

As Bob Dylan once said: “The times, they are a-changing.”

A ruling earlier this month by a California federal court threatens to alter college sports. We may soon see a new definition of amateurism, as the door opens for major college athletes to share in revenue at the top levels of collegiate football and basketball. Gone may be the days when revenue generated by athletic performance on the field eluded athletic performers and was instead divided amongst top universities.

The case, O’Bannon v. N.C.A.A., tried in the Northern District of California, involved a challenge by former major college athletes of the N.C.A.A’s rules restricting compensation for elite men’s football and basketball players. The athletes argued that N.C.A.A. rules prohibiting college athletes from receiving compensation from their schools or outside sources for the use of their names, images and likenesses in live game telecasts, video games, game re-broadcasts, advertisements, and other footage, were a violation of antitrust laws under the Sherman Act. The N.C.A.A. argued that its rules were necessary to ensure preservation of amateurism and opportunities for student-athletes, assurance of competitive balance, and integration of academics and athletics.

After a trial that extended throughout the month of June, the court agreed with the athletes, enjoining the N.C.A.A.’s use and application of its rules, and directing that less restrictive methods be adopted for the N.C.A.A.’s stated goals. The N.C.A.A. was effectively told to share its wealth through stipends for student-athletes while in school and licensing revenue trust funds to be set up for the benefit of the athletes after they leave school.

While the N.C.A.A. will undoubtedly appeal the court’s ruling, returning to the decades-long policy of college athletes playing simply for the cost of tuition may prove difficult. The O’Bannon case will likely open the door to change in college athletics. How such change will impact competition on the gridiron and hard courts, however, remains to be seen.