NCAA Athletes Don’t Have To Be Paid Extra For Using Their Image, 9th Circuit Rules

NCAA athletes do not have to be paid more than the cost of attending college according to a Ninth Circuit court ruling Wednesday. The three-judge panel decision affirmed in part and reversed in part a previous antitrust lawsuit judgment regarding the National Collegiate Athletic Association’s rules that prohibit student athletics from being paid for the use of their name, image and likeness.

The judges stated that the NCAA was not exempt from antitrust scrutiny and must be analyzed under the Rule of Reason. However, the panel ruled against the lower court’s order that student athletics could receive cash compensation of up to $5,000 per year. Instead the Ninth Circuit judges ruled that the NCAA can only pay for the “cost of attendance” which covers the full tuition plus “books and supplies, transportation, and other expenses related to attendance at the institution.” According to the NCAA lawsuit, the difference between the scholarship grant and the “cost of attendance” is a few thousand dollars at most.

The NCAA cash payment lawsuit was originally filed in 2009 by Ed O’Bannon who was a former UCLA basketball player. O’Bannon was visiting a friend when he was informed about his likeness being depicted in a college basketball video game produced by Electronic Arts (EA). In the college sports video game, O’Bannon was an avatar who played for UCLA and wore his same jersey number. The plaintiff claims he never agreed to have his image used in a video game nor was he compensated for it. O’Bannon accused the NCAA of illegally preventing student athletics from being financially compensated for their likeness or image.

In 2014, a California district judge ruled that the NCAA regulations about not compensating athletes for using their image violated antitrust laws but the Ninth Circuit panel disagreed. The judges stated that student-athletes must be considered amateurs and paying them above the cost of attendance would undermine the NCAA amateurism rules.

The panel concluded that the most the court could require is that the NCAA raise the scholarship cap to the full cost of attendance, but this is something the organization has already done.

“Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point,” Judge Bybee stated. “We have little doubt that plaintiffs will continue to challenge the arbitrary limit imposed by the district court until they have captured the full value of their [names, images and likenesses].”

Counsel for the plaintiffs confirmed they were satisfied on the Ninth Circuit court ruling that the NCAA’s old rule was anti-competitive however they did not state whether or not they would object to the rest of the decision.

The plaintiffs are represented by Michael D. Hausfeld, Hilary K. Scherrer, Sathya S. Gosselin, Swathi Bojedla, Michael P. Lehman and Bruce Wecker of Hausfeld LLP and Jonathan Massey of Massey & Gail LLP.

The NCAA Antitrust Lawsuit is Edward O’Bannon Jr. v. National Collegiate Athletic Association, et al., Case Nos. 14-16601 and 14-17068, in the U.S. Court of Appeals for the Ninth Circuit.

UPDATE: On Mar. 15, 2016, plaintiffs asked the Supreme Court to appeal the Ninth Circuit’s ruling that student-athletes can only be compensated for the cost of attending college.