Academic journal article Washington and Lee Law Review

The District Court Decision in O'Bannon V. National Collegiate Athletic Association: A Small Step Forward for College-Athlete Rights, and a Gateway for Far Grander Change

Academic journal article Washington and Lee Law Review

The District Court Decision in O'Bannon V. National Collegiate Athletic Association: A Small Step Forward for College-Athlete Rights, and a Gateway for Far Grander Change

Article excerpt

Table of Contents

I. Introduction...................................................................2320

II. A Trial More Than Five Years in the Making:

The Procedural History in O'Bannon v. NCAA.............2322

A. Pleadings and Early Decisions................................2322

B. Summary Judgment Motions..................................2325

III. The District Court's Ruling at Trial..............................2330

A. Finding of Facts and Conclusions of Law...............2330

1. Relevant Markets and Anticompetitive Effects of NCAA Rules.......................................2331

2. Alleged Procompetitive Benefits of the NCAA Rules.......................................................2332

3. Allegedly Less Restrictive Alternatives............2335

B. Permanent Injunction.............................................2337

IV. Why the District Court Was Correct to Find the NCAA's Restraints on Revenue Sharing to Violate Section 1 of the Sherman Act 2338

V. Why the District Court's Permanent Injunction in O'Bannon Was Insufficient, and Does Not Fully Ameliorate the NCAA's Restraints 2343

VI. Implications of the O'Bannon Decision and Logical Next Steps 2347

A. Grounds for an NCAA Appeal 2348

B. Grounds for a Plaintiffs' Appeal 2351

C. Subject Matter for Subsequent Lawsuits Against the NCAA 2352

D. Impact of the O'Bannon Ruling on CollegeAthlete Unionizing and Title IX Compliance 2355

E. Potential NCAA Advocacy Before Congress for a Statutory Antitrust Exemption 2359

VII. Conclusion 2363

I. Introduction

On August 8, 2014, the U.S. District Court for the Northern District of California held in O'Bannon v. National Collegiate Athletic Association1 that the NCAA rules that prevent men's college basketball and football players from controlling the commercial rights to their names and likenesses "unreasonably restrain trade in the market for certain educational and athletic opportunities offered by NCAA Division I schools."2 The court then issued an injunction preventing the NCAA from restraining its members from compensating their men's basketball and football players up to $5,000 per year for the use of their likenesses.3 The court further enjoined the NCAA from prohibiting monetary awards to college athletes in the amounts up to "the full cost of attending the respective NCAA member school."4

The O'Bannon decision is an important step forward for both college-athletes' rights and sports law jurisprudence because it recognizes that NCAA rules limiting college-athlete pay may violate section 1 of the Sherman Antitrust Act.5 Nevertheless, the ruling's impact is tempered by the iconoclastic nature of the court's injunction, which limits the immediate potential for college-athlete compensation beyond a nominal amount.6 At the same time, the ruling seems to ignore the broader implications of NCAA restraints on third-party markets for licensing celebrities' likenesses for endorsements-restraints that federal courts eventually must overturn.7

This Article explains why the district court decision in O'Bannon v. National Collegiate Athletic Association was correct to hold that the NCAA unreasonably restrained trade by preventing athletes from sharing revenues derived from the use of their names and likenesses, but too narrow in its injunction that only mandated the NCAA to allow compensation through a deferred trust in amounts up to $5,000 per year. Part II of this article provides the procedural history of O'Bannon v. National Collegiate Athletic Association-a case that many believed would fundamentally change the nature of college-athletes' rights in America.8 Part III explains the findings of fact and conclusions of law in the O'Bannon bench trial, and discusses the court's permanent injunction issued against the NCAA.9 Part IV explains why the district court in O'Bannon was legally correct to find the NCAA's restraints on sharing revenues with college athletes violated section 1 of the Sherman Act. …

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