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Judge Rules Against NCAA In O'Bannon Trial

NCAA can no longer stop schools from giving athletes money based on their names. Secondary ruling does allow governing body to prevent athletes from making money on their own, though.

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Jamie Squire

The name Judge Claudia Wilken will forever be tied to the day college athletics changed forever.

In a 99-page report, Judge Wilken ruled against the NCAA in the lawsuit between the governing body of college athletics and plantiff Ed O'Bannon.  The ruling states that athletes can no longer be prevented from making money off of promotional materials paid for by the school.  In short, if a school wants to pay its players for the right to use their likeness, they now can as long as the salary cap is below $5,000.

This money will be paid out of a trust fund, meaning if a school wants to pay its recruits, the NCAA can't stop them.  The difference is that the NCAA can force the schools to spend the same money on every recruit so as to not discriminate against one particular athlete over another (i.e. Jameis Winston cannot make more money than the scout team cornerback).

Schools will not be forced to offer up this money, as long as they offer scholarships at the cost-of-attendance.  The cost-of-attendance includes the personal costs, transportation, room and board, books and supplies, and tuition.

While this is a huge blow to the NCAA, the body did score a major win in the affirmation of its ability to prevent athletes from marketing themselves.  That means the marketing and promotion of the athlete, as well as the compensation thereof, becomes regulated by the college body.

We also know the NCAA will appeal the ruling, at which point no new information or evidence can be introduced.

The lawsuit is being led by Ed O'Bannon, a former basketball player from UCLA who spent parts of nine seasons in the NBA and abroad.  His lawsuit argued that athletes, upon graduation, were entitled to compensation for using their name, image, and likeness (NIL) if used after graduation.  It stemmed from a college basketball video game using O'Bannon's image as part of the 1995 Bruins national championship team.  While not explicitly using his name, the #31 athlete looked like O'Bannon, with his exact height, weight, and left-handed shot.

In short, when playing a video game like EA Sports NCAA Football '14, you can sit down and have a tall, blond-haired, white, right-handed quarterback named QB #11 on Boston College.  It looks like Chase Rettig, it has his attributes, and it even fumbles in the fourth quarter against Clemson.  But according to the lawsuit, Rettig wasn't properly compensated.  In this instance, Judge Wilkins found that there is an implied likeness and with the NCAA making money off of it, Rettig would be entitled to that compensation.  As a result, the NCAA will be forced to undergo reform in order to compensate its athletes appropriately.

But while all of this strikes down what amounts to a collusion charge to keep "labor costs" low for the players, the NCAA will still be able to regulate it, just not at a governing body area.  The regulation of these costs will now fall on the school, something even further allowed by granting the Power Five conferences further autonomy.  It'll allow the schools to pay out to athletes up to $5,000 per player, but it still will not allow the player to market themselves.  That means it's still a violation if a hotshot quarterback wants to sell his autograph.

The labor costs, though, will be held in a trust until after the athlete leaves school.  Per the ruling:

...holding compensation in trust for student-athletes while they are enrolled would not erect any new barriers to schools’ efforts to educate student-athletes or integrate them into their schools’ academic communities.

Well, what's that mean?  It means the agreement between the athlete and the school will allow for the money to be held until they become entitled to it.  They aren't entitled to it until they leave school.  This will prevent anything from integrating the students into academic or athletic life.  In short, it prevents them from becoming completely professional and instead entitles them to their compensation after they leave.  They'll be entitled to a certain amount of money each year for use of their likeness, and that money will be held until they leave.  Then when they leave, that's their compensation.

There is almost assuredly going to be reform on the horizon for the NCAA.  The ruling, in its entirety, can be read by clicking here.  How this shakes out in the future will be a hot button topic, and it's going to be very interesting to see how this impacts Boston College, the ACC, Hockey East, and other leagues as things move forward.