U.S. District Chief Judge Claudia Wilken, Northern District of California (Hillary Jones-Mixon / The Recorder)
SAN FRANCISCO — Top college football and basketball players must be paid the full cost of their education, plus up to $5,000 a year in broadcast and video game licensing, U.S. District Judge Claudia Wilken of the Northern District of California ruled Friday.
The ruling brings to a close a hard-fought antitrust class action against the National Collegiate Athletic Association, and seems likely to change the face of college athletics—though only slightly.
“The court finds that the NCAA has the power—and exercises that power—to fix prices and restrain competition in the college education market that plaintiffs have identified,” wrote Wilken, who presided over a bench trial in June of a case brought by current and former student-athletes.
Wilken entered an injunction ordering the NCAA to increase men’s football and basketball scholarships at the largest colleges to the full cost of attending school—about $3,000 a year more than the value of a scholarship now. She also ordered the NCAA to permit schools to pay those athletes up to $5,000 in licensing revenue from television and video game contracts, while requiring that players on each team be compensated equally. The money will be held in trust until after students graduate.
“Schools may offer lower amounts of deferred compensation if they choose but may not unlawfully conspire with each other in setting these amounts,” Wilken wrote.
She also turned down the athletes’ request that they be allowed to earn endorsement money during their college careers.
Some 33 law firms, led by Michael Hausfeld of Washington, D.C.’s Hausfeld, entered appearances in the 5-year-old case. The class was led by former UCLA basketball star Edward O’Bannon Jr. and included professional legends Oscar Robertson and Bill Russell.
They challenged rules that prevent student-athletes from receiving a share of the revenue that the NCAA and its member schools earn from the sale of their names, images and likenesses. The NCAA settled a similar claim—that player likenesses were broadcast without their consent—for $20 million just before trial. Electronic Arts Inc. previously settled its portion of both cases for $40 million.
The NCAA was represented by firms that included Munger, Tolles & Olson and Schiff Hardin. It argued that the rules were reasonably related to preserving its tradition of amateur competition and maintaining competitive balance, among other things.
Wilken found those arguments unpersuasive, in part because the NCAA allows for professional earnings in other sports, such as tennis. Rather than promote balance, its bylaws favor schools with the largest budgets for athletics, she concluded.
Restrictions on student compensation “lead many schools simply to spend larger portions of their athletic budgets on coaching, recruiting, and training facilities,” Wilken wrote.
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