This case started off as a lawsuit from former NCAA athletes looking for a piece of revenues from replays of old games, whether as archival film or shown in their entirety, as in ESPN Classics. A ruling in court yesterday may have broadened the lawsuit to include all TV revenue for all athletes, former and current — and could dramatically impact the financial model for collegiate sports:
In dismissing a motion by the NCAA to prevent football and men’s basketball players from legally pursuing a cut of live broadcast revenues, a federal court judge Tuesday raised the stakes for the governing body of college sports as it defends its economic model.
Judge Claudia Wilken issued her ruling Tuesday, rejecting the NCAA’s motion that players in the antitrust suit led by former UCLA star Ed O’Bannon should be precluded from advancing their lawsuit on procedural grounds.
The NCAA had objected to the players amending their lawsuit last year to claim a share of all television game revenues, not just those from rebroadcasts. …
The O’Bannon suit attacks that model through the means of class-action, the legal question now before Wilken. Former college stars such as Bill Russell and Oscar Robertson have joined O’Bannon on behalf of all Division I players in football and men’s basketball, asking Wilken to declare that they are similarly situated and to certify the class.
Wilken on Tuesday set the hearing on that motion for June 20 and ordered the NCAA to make its arguments against class certification on the merits rather than procedural objections such as the one she just rejected. The NCAA was joined in that motion by its partner, Collegiate Licensing Company.
This opens an old debate on whether the NCAA’s massive television revenues exploit student athletes. It’s certainly a good question for rebroadcasts, where the “students” are no longer restricted to amateur status, but end up providing revenues for the NCAA long after the benefit of scholarships have ended. It’s a little difficult to justify a lack of revenue sharing in that relatively new area of NCAA commerce, if even in a token manner by contributing to health care or some other service that could be structured for former college athletes.
But the big enchilada here is the question of compensating current student athletes. The NCAA has long argued that the athletes who provide the entertainment that generates the revenue receive compensation through lucrative scholarships (at least in most cases), trading their efforts for a free education and potential for a degree that will bring them better earnings as adults. In sports such as football, basketball, and (to a lesser extent) baseball, one could also argue that the opportunity to play raises the athlete’s value in pro-sports drafts, which then deliver big paydays. Of course, only a small percentage actually make it that far.
It’s not an easy question. One could apply the same principle to college theater, which brings in revenue while the cast has to settle for school credit — but the revenues aren’t in the billions of dollars each year for 538 college productions of Our Town or You Can’t Take It With You, either. There is a good argument to be made about exploitation in that context, and the NCAA may find it very difficult to argue that they have no real obligation to share the revenue they make with the people who make it possible. And if they lose that argument, that could make it difficult for many NCAA schools to maintain their current business model, and might make big-time college sports return to their original mission: to build character, rather than bank accounts.