How Ed O'Bannon's Lawsuit Would Dismantle The NCAA
Originally published in Bloomberg View.
The storm that’s slowly rolling toward Indianapolis quietly gained strength this week with the filing of several devastating documents in a federal court in California. If it stays on course, it’s going to hit with biblical force, reducing the National Collegiate Athletic Association to a heap of rubble.
This storm is also known as O’Bannon v. NCAA. It’s an antitrust lawsuit filed in 2009 by former UCLA All-American basketball player Ed O’Bannon and a handful of other ex-college athletes, who don’t think the NCAA should be profiting from their names and images without sharing the royalty payments.
In their latest filing, O’Bannon’s lawyers argue that the case deserves class-action status. If their request is granted, the NCAA would be liable for claims brought not just by the plaintiffs but also by all former athletes. Anyone who has ever played a Division I college sport would instantly be suing for damages for every instance in which his or her image was used in a video game, highlight reel, broadcast or rebroadcast.
That could get pretty expensive for the NCAA. But if the case were just about a few billion dollars, the association would have settled by now. It hasn’t because O’Bannon and his lawyers are also asking for something else: They want all current and future college athletes to be able to make licensing deals of their own. It’s short yardage from there to the NCAA’s doomsday scenario: schools bidding for the services of student-athletes.
The NCAA’s lawyers, of course, are trying everything they can think of to stop the case from earning class-action status. They’re so desperate that they’re resorted to idle threats, enlisting Big Ten commissioner Jim Delany to file a declaration stating that if the O’Bannon case were to result in student-athletes getting paid, his conference’s schools would probably opt out and move down to Division III. (Early line on the upcoming Amherst-Ohio State game: Buckeyes by 117 1/2.)
Delany’s statement says pretty much everything you need to know about the NCAA’s legal strategy. It’s called—and this not a legal term—fear-mongering.
The world of college sports would be radically different, the NCAA says—in ways we can’t even begin to predict!—if those responsible for making it a multibillion-dollar business (that is, the athletes) were entitled to receive some monetary compensation for their efforts. This is the same sort of doomsaying that Major League Baseball engaged in during its battle against free agency in 1970, when it warned that without the reserve clause, “professional baseball would simply cease to exist.” For that matter, every time an amateur sports event “goes pro”—whether it’s the Olympics, or golf and tennis’s majors—it has been preceded by predictions of disaster.
O’Bannon’s response to the NCAA may be the most powerful case ever assembled against the association’s propaganda machine. Among other things, it systematically dismantles the NCAA’s argument that the vast majority of its members lose money on sports. In fact, most Division I schools are not caught in an expensive arms race for coaches and athletic facilities. They have simply obscured the profitability of their football and basketball programs with accounting tricks, such as shifting revenue from sports concessions to the food service budget.
The NCAA advances these false claims of poverty so it can argue that its member schools can’t possibly afford to spend more money on sports, much less pay their athletes. O’Bannon’s lawyers put the lie to this, too, invoking foundational truths of economics dating to Adam Smith and David Ricardo: “Redistributing rents does not change true economic costs. It simply takes money from one person or group and shifts it to another.” Translation: Paying athletes wouldn’t result in schools spending additional money on sports. They would just spend less of it on coaches and facilities and more on students.
In truth, if the NCAA’s cartel were finally broken, the college-sports world of tomorrow would look…well, it would look a lot like the college-sports world of today. More student-athletes might decide to stay in school rather than gambling on the draft (a bad thing?). Maybe some second-tier schools would take a run at joining the first tier—not by shelling out $100 million for a new field house, but by spending a lot less on a few five-star recruits.
And that’s about the extent of it. The same schools that invest heavily in their sports teams now would continue to do so, much as the top recruits would continue to gravitate toward the biggest, richest programs. Most of all, fans would continue to watch the games.
The NCAA’s lawyers have one final chance to respond to O’Bannon’s request that the case be certified as a class action before the judge rules in June. Whatever happens from here, the O’Bannon case has already performed a valuable service: It has exposed a system whose sole purpose is to deny the value of talented athletes. That system and its overlord—the NCAA—both deserve to die.
Jonathan Mahler is a sports columnist for Bloomberg View. A long-time contributor to The New York Times Magazine, he is the author of the best-selling Ladies and Gentlemen, the Bronx Is Burning, The Challenge, and Death Comes to Happy Valley. He's @jonathanmahleron Twitter.
http://deadspin.com/how-ed-obannons-lawsuit-would-dismantle-the-ncaa-489241635
