NCAA The Big Winner In O’Bannon Decision

Since June the college athletics world had been awaiting Federal District Judge Claudia Wilken’s decision on whether or not to certify as a class the plaintiffs in the O’Bannon case.  Friday we got our answer, and it was technically a split decision.  The plaintiffs can move forward as a class in seeking an injunction to prevent the NCAA from continuing to enforce its amateurism rules.  However they may not proceed as a class in seeking financial damages for past harm done by those rules.

So what does this mean?  It means the NCAA dodged the big bullet, at least financially and in the short term.  Had the decision been to allow the plaintiffs to proceed as a class in seeking financial damages for past harm, some experts put the NCAA’s potential financial risk in the billions.  Instead, the judge found too many faults, holes and problems with certifying the plaintiffs as a class to go after past damages.  Does that mean Ed O’Bannon and the other plaintiffs are without recourse?  No.  They are each free to proceed on their own to seek damages for harm done to them individually; they simply can’t represent thousands upon thousands of other former and current student-athletes while doing so.

The practical impact of this is significant.  The chances that a large number of individual former or current student-athletes  are going to go through the process of hiring an attorney, filing suit, and seeing the case through to a jury verdict and then several appeals is remote.  This is true especially when you consider the maximum damage to one single student-athlete likely wouldn’t be all that significant when compared to the cost of litigation.  The NCAA’s real exposure here was if the group was able to move forward as a class, which as it stands now is out the window.

The O’Bannon plaintiffs did win a victory in that they are allowed to move forward as a class in pursuit of an injunction.  This is important because if they were to win on that point, the NCAA would be forbidden by law to enforce its current amateurism legislation and would be forced to amend it.  That would likely mean some sort of revenue sharing with student-athletes moving forward.  Certainly this is a positive step from the plaintiffs’ side toward reforming the current system, and puts some pressure on the NCAA to offer structural reform in a settlement agreement.  However, the NCAA and its many member schools have shown little interest in making such changes, and my guess is Friday’s ruling will embolden them rather than push them toward making a deal.

So while several commentators are calling this a split decision and both sides are claiming victory, I tend to think this is a decision which dramatically favors the NCAA.  Thursday they were in danger of going bankrupt; Friday that changed to being in danger of being told you can’t do that anymore.  Think about it in this context: instead of fines and jail time, what if Bernie Madoff’s maximum possible punishment was he couldn’t operate a Ponzi Scheme anymore?  Or how about a kid who steals a smaller kid’s lunch money,  and the maximum possible punishment is the kid will be told he can’t do that anymore?  How would you feel if you were Bernie Madoff or the lunch money thief?  Pressured to admit some guilt and make a deal?  I don’t think so.

The one thing the O’Bannon plaintiffs have going for them is they won’t be the last to challenge the NCAA and its amateurism rules.  And there is no way of knowing whether or not in the next case, or the case after that, a judge might not reach a different result. That’s the risk the NCAA now faces; it’s further down the road and not as clear, but it’s there nonetheless.  So it may be to its benefit to implement small, tempered changes now, when it can bargain from a position of relative strength and mostly on its own terms.  After all, that’s certainly better than being told by a judge and jury how to run college sports.

The NCAA won big on Friday and is now in the driver’s seat as the litigation moves forward.  The question now is how will it act in victory: offer some type of reform to reconcile differences with the O’Bannon plaintiffs and hedge against future lawsuits or offer nothing and go for a knockout blow.  I’m hoping for the former and expecting the latter.

Follow Daniel on Twitter @DanielHare.

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