March Was A Rough Month For NCAA

It was a rough March for the NCAA.  Most notable was the National Labor Relations Board ruling which said scholarship football players at Northwestern University are employees and can form a union (that decision is being appealed; I posted my thoughts here).  Surprisingly, the NLRB ruling may not have been the worst of it.

Last month a new lawsuit was filed against the NCAA, this time directly targeting its rules capping the level of allowable scholarship awards.  If successful, college athletics would be radically changed and we would essentially have a free market system when it comes to athletic scholarships.

WHAT HAPPENED?

Super-attorney Jeffrey Kessler, who helped usher in the era of free agency to the NFL as well as collective bargaining to the NBA, filed suit on behalf of four current student-athletes against the NCAA and the five major conferences in federal court.

The complaint says the NCAA mandates arbitrary scholarship caps which violate anti-trust laws, and the system needs to be changed.  It’s notable that the plaintiffs are seeking class certification for the purposes of injunctive relief (i.e. changing of the rules going forward), but not for damages.  This is consistent with the class certification ruling made by federal judge Claudia Wilken in the similar O’Bannon litigation last year.

HOW IS THIS CASE DIFFERENT FROM THE O’BANNON CASE?

The significant difference between this case and O’Bannon is the underlying issue.  The O’Bannon plaintiffs argue that their image and likeness has been misappropriated for use in video games and television broadcasts, without just compensation.

The Kessler plaintiffs are targeting the actual NCAA bylaw which caps scholarship values at tuition, fees, room, board and books.  They seek to have the bylaw struck down, creating a free market system for athletic scholarships.

ISN’T THIS JUST ANOTHER LONG-SHOT CASE?

Perhaps, though some commentators have suggested this is the best legal argument to date for attacking the current NCAA / student-athlete model.  There are now at least four related cases against the NCAA for some violation of anti-trust laws related to capping student-athlete compensation.  If any are successful, it would have a major impact on college athletics going forward.

The O’Bannon case was filed in 2009 and has survived several pre-trial motions by the NCAA to dismiss the case; it is set for trial in June.  The Kessler case is in its infancy, and will almost certainly take years to work its way through the courts.  However a favorable opinion in O’Bannon could impact the way in which the parties in Kessler’s case proceed.

WHAT ELSE SHOULD I KNOW ABOUT THIS CASE?

While this case certainly is in line with the other pending litigation as we’ve mentioned, it does not seek to have student-athletes classified as employees. There is a movement to do just that centered on Northwestern University football players.  They won their first step on that journey and must now defend the regional NLRB decision to the national board and ultimately in the courts.

If the Kessler plaintiffs were successful, student-athletes would not necessarily be employees or able to unionize.  Rather, the cap on scholarship awards would be lifted such that schools could put together any scholarship package they wanted.  Therefore if Texas A&M wanted to offer the next Johnny Manziel a “scholarship” of tuition, fees, room, board and books, PLUS $250,000 per year, it could. (Plenty of questions would then be raised about whether the athletes receiving amounts above/beyond the cost of attendance are employees, could unionize, and what impact the new rule would have on college athletics’ tax-exempt status).

HOW IS THIS CASE LIKELY TO PLAY OUT?

It’s obviously very difficult to say.  Many assumed the O’Bannon case would have been settled by now, particularly once class certification had been granted.  But here we are less than three months away from the start of the trial without a resolution in sight.

One possibility that has been discussed is the consolidation of all the related cases against the NCAA.  This could happen if the judges in the cases got together and determined that was the most efficient way to proceed and resolve all the issues fairly.  This seems possible except for the disparity in maturation of the two cases: one going to trial in June after five years in the pipeline, and the other just being filed within the last month.

Judge Andrew Napolitano, Fox News contributor, suggested Congress should get involved and grant the NCAA an anti-trust exemption to essentially make all these cases moot.  That’s certainly a route the NCAA would love to take, however at this point it seems just as likely that any congressional involvement could mean removing tax exempt status from college athletic departments.  So it might be better for the NCAA to avoid congressional intervention at this point.

FINAL THOUGHT

O’Bannon, Northwestern football players and Kessler are each battling for better treatment of college athletes, but coming at it from different angles.  The Kessler lawsuit is the most recent of the three, but ultimately could have the greatest impact.  It will also have more precedent to work with, assuming there’s resolution in one of the other matters.

I continue to come back to this: change is coming to the college athletics model.  If the NCAA and member schools don’t move quickly to work with the athletes on a solution, one is going to be imposed by a government official.  While that result may be better than the status quo, the better route is for those directly impacted to determine their own future.

photo courtesy of Jay Denney via Flickr.

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