The Right of Publicity and College Sports Broadcasting

Napier

College Athletes Living in Poverty

In a study conducted by the National College Players Association, based on a comparison between the 2011 national poverty line and Football Bowl Subdivision Series (FBS) room and board portions of full athletic scholarships, at least 85% percent of FBS players live below the poverty line.[1] Similarly, Shabazz Napier, now playing for the Portland Trail Blazers, said during his time at the University of Connecticut that there were nights in college where he was hungry and did not have the money for food.[2]

Why College Athletes Are Not Being Paid

There are not many businesses more lucrative than college sports, so why is this happening? One issue is a legality preventing college players from benefitting financially from their participation in college athletics—the inability to receive compensation for the televised broadcast portrayals of their likenesses.[3] The right of publicity, which varies depending on the state and whether the claim is statutory or common law-based in nature, protects a person from the unconsented use of his or her likeness, for commercial purposes.[4] The idea is simple: you cannot use someone else’s name or image, without their permission, to make money. So why can this idea not be applied to television broadcast?

An important court decision that lends some guidance came down in August 2016 at the hands of the Sixth Circuit Court of Appeals.[5] Javon Marshall, a former football player at Vanderbilt University, along with several other former college athletes, filed a lawsuit against ESPN, CBS, NBC, ABC, Fox, and eight NCAA athletic conferences.[6] Marshall and the other athletes alleged violations of their Tennessee statutory and common law rights of publicity.[7] All claims were denied.[8]

A big reason for the denial of the statutory claims was the choice of venue. Tennessee, whose law applied because the original suit was brought in Tennessee federal district court, clearly states that no right of publicity violation can arise from the use of an individual’s name, photograph, or likeness in connection with a sports broadcast.[9]

With respect to the common law claims, the plaintiffs relied on the only common law right of publicity claim heard by the Supreme Court, which held that a performer’s right was violated where he was secretly filmed doing a “human cannonball” routine and that footage was broadcast on Ohio television.[10] The District Court rejected similarities between the cases, and noted that Zacchini does not stand for the existence of a right of publicity whenever anyone performs in an event produced by someone else.[11] The Court, did, however, acknowledge that the First Amendment’s protection against right of publicity claims is not unlimited.[12]

Upon appeal, the Sixth Circuit Court of Appeals affirmed the District Court’s decision as to the statutory and common law rights of publicity claims.[13] The decision was largely based on Tennessee’s law, as applied to not only the statutory claim, but the common law claim as well: “the plaintiffs’ common-law claim is meritless, as the district court rather patiently explained, because the Tennessee courts have never recognized any such right and because, in the meantime, the Tennessee legislature has spoken to the issue directly.”[14]

Future Options for College Athletes

It seems that the choice of venue played a huge role in the denial of these claims. Were these claims brought in a different jurisdiction, say, California, which applies the right of publicity more broadly, perhaps the result would have been different.[15] Rulings from these jurisdictions may be college athletes’ last hope at being compensated for the portrayal of their likenesses in television broadcast, as the Supreme Court seems unwilling to weigh in on the issue.

Author Biography:

Jason Rozbruch is a first-year student at Fordham University School of Law. Prior to attending Fordham Law, Jason attended the University of Michigan, where he graduated with a major in History and a minor in the Afroamerican & African Studies Honors Program.

[1] Huma, Ramogi, and Ellen J. Staurowsky, E.d.D. “The Big Price of Poverty in Big Time College Sport.” Ncpanow.org. Accessed March 26, 2017. http://www.ncpanow.org/research/body/The-Price-of-Poverty-in-Big-Time-College-Sport.pdf.

[2] Sherman, Rodger. “Shabazz Napier: ‘We Have Hungry Nights’.” SBNation.com. April 07, 2014. http://www.sbnation.com/college-basketball/2014/4/7/5591774/shabazz-napier-uconn-basketball-hungry-nights.

[3] See Marshall v. ESPN, No. 15-5753, 2016 U.S. App. LEXIS 15292 (6th Cir. Aug. 17, 2016).

[4] See e.g., N.Y. Civ. Rights Law §§ 50, 51 (LexisNexis2017) (stating that a person’s right of publicity is violated, when, without his or her consent, that person’s name, portrait, picture, or voice is used in trade or advertising).

[5] See Marshall v. ESPN, No. 15-5753, 2016 U.S. App. LEXIS 15292.

[6] See id.

[7] See id.

[8] See id.

[9] Tenn. Code Ann. § 47-25-1107 (LexisNexis 2017).

[10] Zacchini v. Scripps-Howard Broad. Co., 433 U.S. 562, 573 (1977).

[11] See Marshall v. ESPN Inc., 111 F. Supp. 3d 815, 828-29 (M.D. Tenn. 2015).

[12] See id. at 828.

[13] See Marshall v. ESPN, No. 15-5753, 2016 U.S. App. LEXIS 15292.

[14] Id. at *5.

[15] See generally White v. Samsung Elecs. Am., Inc., 971 F.2d 1395, 1399 (9th Cir. 1992) (holding Samsung liable for violating Vanna White’s right of publicity where they produced a commercial with a robot wearing clothing similar to her and spinning the Wheel of Fortune).

Shooting for Equality: USWNT Stars File Wage Discrimination Complaint

USWNT

The Players’ Cause of Action

It is not often that members of one of the most successful teams in a country make significantly less than their unsuccessful counterparts. However, this is exactly the case with the two United States national soccer teams. In their Equal Employment Opportunity Commission (EEOC) complaint[1] against the United States Soccer Federation (USSF), five stars from the women’s team Alex Morgan, Carli Lloyd, Megan Rapinoe, Becky Sauerbrunn and Hope Solo stated that despite producing higher revenues than the men’s national team, the women’s team received four times less than the men’s squad.[2] The complaint was officially filed on March 29st by prominent sports law attorney, Jeffrey Kessler.

Solo, the team’s starting goaltender, describes the frustration:

“We are the best in the world, have three World Cup Championships, four Olympic Championships, and the [U.S. Men’s National Team] USMNT get paid more just to show up than we get paid to win major championships.”

One example of this is that the U.S. Women’s National Team (USWNT) made only $2 million for their dominant World Cup title run, while the USMNT made $9 million the year before they even appeared in the World Cup. Another example of the compensation disparity is shown by merit pay. USWNT players receive $1,350 per match only if they win their game. On the other side, USMNT receive $5,000 for a loss in a similar match and can make up to $17,625 for a win.[3] The EEOC complaint calls for these discrepancies to be changed and has the potential to be a turning point for equal pay in women’s sports.

Merits of the EEOC Complaint

The EEOC complaint came as a result of the expiration of Collective Bargaining Agreement (CBA) between the USSF and the USWNT in 2012. In 2013, the two parties signed a Memorandum of Understanding (MOU), while details of the new CBA were being finalized. The women’s players union terminated the MOU because they believed its provisions, including compensation, were unfair.[4] The USSF, who believes that the MOU contained a no strike clause, filed a lawsuit against the union to determine whether or not the move was legal.[5] A Chicago court is expected to rule on whether this matter in June.[6]

The lawsuit over the MOU heightened tensions between the USSF and USWNT and spurred the USWNT to fight back and file this EEOC complaint. While arguments over the CBA led to the EEOC complaint, the lawsuits have no effect on each other’s outcomes. The EEOC examines claims of discrimination off of merit and federal law states under Title VII of the Civil Rights Act of 1964 which states that it is illegal to discriminate against an employee because of race, color, religion, sex, national origin, age, disability or genetic information.[7] The EEOC will look towards the Equal Pay Act passed in 1963[8], which was created out of “concern for the weaker bargaining position of women” and meant to protect employees from discrimination. The Act states that employers cannot use a CBA to protect itself for a violation of unequal pay and therefore the Chicago court’s ruling will have no effect on the EEOC complaint.[9]

The complaint addresses all of the fctors that the USWNT believes they have in their favor. After citing specific instances of their recent success, the USWNT’s complaint broke down the compensation discrepancies into four categories: (1) Friendlies, (2) World Cup, (3) Olympics, and (4) Sponsor Appearances and Ticket Revenue.[10] The complaint then goes into detail of the wage discrepancies between the USWNT and the USMNT in each of these categories.[11] The complaint concludes by stating that there are “no legitimate, non-discriminatory reasons for the gross disparity of wages” that they have shown and the team has been discriminated against solely because of their gender.[12]

The EEOC will need to determine if this is indeed true. There is no current schedule for this complaint, but the EEOC states that its average investigation took 10 months in 2015.[13] If the USWNT does prevail, they should have a lucrative outcome. When discrimination is found, the EEOC tries to put the victim in the same position they would have been in had the discrimination not occurred.[14] The employer is also required to stop any discriminatory practices and take steps to prevent discrimination in the future.[15] Finally, if the discrimination is found to be intentional, the USWNT may also receive compensatory and punitive damages of up to $50,000 per person.[16]

A Boycott of the Olympics?

While there is no current timetable for the EEOC complaint, it could cause immediate problems for the USSF. While the case awaits investigation, CBS’ Jim Axelrod has speculated that the USWNT may boycott the Olympics in August to give them leverage in their current negotiations.[17] This is problematic because the USSF’s annual report stated that they projected the USWNT to bring in $5 million in profits, while the USMNT is expected to have a net loss of $1 million.[18] The USSF may opt to work towards a settlement in order to avoid this boycott.

The reigning World Cup champion USWNT have a strong case after producing more revenue last year than the USMNT. The team will likely use its continued success and the upcoming Olympics as leverage to push the USSF to give the players equal pay as their male counterparts. While the USSF can try to make the case that the men’s soccer is a more popular sport that draws larger crowds and has the potential to generate more revenue, it seems that the numbers are on the side of the USWNT. Only time will tell how this case will evolve and whether the USWNT will receive the equal pay that it deserves. One thing is for certain though: this case will be monumental for the future of compensation in women’s sports.

Author Biography:

Andrew Washburn is a first-year student at Fordham University School of Law. Prior to attending Fordham Law, Andrew attended Fordham’s Gabelli School of Business and graduated with a degree in Business Administration with a Concentration in Management.

[1] http://big.assets.huffingtonpost.com/EEOCCharge.pdf

[2] Mary Pilon, US women’s soccer players sue over pay gap, Poltico (Mar. 31, 2016, 8:01 PM),

http://www.politico.eu/article/us-womens-soccer-players-sue-over-pay-gap/

[3] USSF Refutes Women’s Players’ Wage Complaint, Says Players Accepted CBA Terms, SBD (Apr. 1, 2016), http://www.sportsbusinessdaily.com/Daily/Issues/2016/04/01/Leagues-and-Governing-Bodies/US-Soccer.aspx?hl=uswnt&sc=0

[4] U.S. Soccer Federation sues women’s national team union over CBA, The Inquirer (Feb. 4, 2016, 3:50 PM), http://www.philly.com/philly/blogs/thegoalkeeper/US-Soccer-Federation-sues-womens-national-team-over-CBA.html#xdu8IqD3r1qAAx0v.99

[5] Lester Munson and Adrrienne Lawrence, Unwrapping the USWNT’s equal-pay filing and what it means, ESPN W. (Apr. 6, 2016), http://espn.go.com/espnw/voices/article/15138438/unwrapping-uswnt-equal-pay-lawsuit-means

[6] USSF Refutes Women’s Players’ Wage Complaint, Says Players Accepted CBA Terms, SBD (Apr. 1, 2016), http://www.sportsbusinessdaily.com/Daily/Issues/2016/04/01/Leagues-and-Governing-Bodies/US-Soccer.aspx?hl=uswnt&sc=0

[7] Civil Rights Act of 1964 § 703(a), 42 U.S.C. § 2000e-2(a) (2012).

[8] The Equal Pay Act of 1963, 29 U.S.C. § 206-(d).

[9] Id.

[10] http://big.assets.huffingtonpost.com/EEOCCharge.pdf

[11] Id.

[12] Id.

[13] U.S. Equal Employment Opportunity Commission, https://www.eeoc.gov/employees/process.cfm

[14] U.S. Equal Employment Opportunity Commission, https://www.eeoc.gov/employees/remedies.cfm

[15] Id.

[16] Id.

[17] USSF Refutes Women’s Players’ Wage Complaint, Says Players Accepted CBA Terms, SBD (Apr. 1, 2016), http://www.sportsbusinessdaily.com/Daily/Issues/2016/04/01/Leagues-and-Governing-Bodies/US-Soccer.aspx?hl=uswnt&sc=0

[18] Mary Pilon, US women’s soccer players sue over pay gap, Poltico (Mar. 31, 2016, 8:01 PM),

http://www.politico.eu/article/us-womens-soccer-players-sue-over-pay-gap/

As the NFL Season Ends, Tom Brady and the NFL Resume ‘Deflategate’ Saga

Deflategate-PatriotsBeing an immensely popular and public entity has created serious drama for, and within, the National Football League (NFL).  In what has come to be known as “Deflategate,”[1] the NFL and New England Patriots quarterback Tom Brady, one of its marquee players, have clashed in federal courts for over a year.  After Brady’s initial four-game suspension (for his alleged involvement with the under-inflation of game-used footballs) was upheld by the NFL’s Commissioner, Roger Goodell,[2] the Southern District of New York overturned his four-game suspension,[3] prompting the NFL to appeal the district court’s reversal.  The U.S. Court of Appeals for the Second Circuit held oral arguments on March 3, 2015,[4] with the rumor out of the hearing being that Brady looks to be in trouble, as his suspension may be reinstated.[5]

One thing about the Second Circuit’s review is not in question:  this is not a review to determine if Brady participated in the deflation of footballs.[6]  The Second Circuit’s review is focused on determining if the lower court overstepped its boundary in reversing the NFL’s arbitration decision, pursuant to the NFL’s Collective Bargaining Agreement (CBA).[7]  This is primarily a procedural determination, rather than a substantive one.

This post discusses the district court’s reversal of the NFL’s hearing officer,[8] the Second Circuit’s review of that decision, and the labor law principles that courts generally apply in reviewing a disciplinary decision stemming from a collective bargaining agreement between an employer and a union.  This post concludes with a prediction as to how the Second Circuit will rule on the NFL’s appeal.

Why Is Brady Appealing?

After Tom Brady’s initial four-game suspension was upheld by Commissioner Goodell on appeal, Brady decided to file a lawsuit pursuant to Article III of the NFL’s CBA.  Under Article III, a player may bring a lawsuit against the NFL to challenge the impartiality of the arbitrator in hearing any player’s appeal.[9]

Here, Brady was alleging that the Commissioner was not impartial, as required under Articles XV and XVI of the CBA.  Additionally, Brady argued that he was not provided notice of a possible four-game suspension for such a violation.  Brady also argued that he did not have access to the unfiltered report itself during the appeal hearing, or access to key witnesses involved in the preparation of the report.[10]

Eventually, district court Judge Richard Berman agreed with Brady, and overturned his suspension on September 3, 2015.[11]  Judge Berman decided that the NFL did not meet the procedural requirements in Brady’s appeal, holding that they failed to provide him the requisite notice and access to key information during the appeal process.[12]  The NFL subsequently filed its appeal to the Second Circuit.

What Will the Second Circuit Be Analyzing On Appeal?

At issue in the Deflategate dispute is whether or not Commissioner Goodell’s affirming of Brady’s suspension was in compliance with the NFL’s CBA.  As stated above, Judge Berman ruled that it was not, after Brady argued that he did not have notice of the punishment, and access to the report and key witnesses.  Under the Labor Management Relations Act though, the power to interpret a CBA generally belongs to the agreed upon body as set forth in the CBA at issue.[13]  In the NFL’s CBA, the Commissioner may appoint himself as hearing officer, if he chooses, and is entitled to interpret the application of the CBA.[14]

In hearing a case in which an arbitrator would have already ruled on the issue (which is the case in the NFL because a hearing officer oversees the appeal of player discipline), courts will rarely overturn the decision of an arbitrator or hearing officer.  The arbitration procedural step is mutually agreed upon, and in general labor law, there is a “private association” principle that many courts follow in declining to interrupt a private agreement between parties.[15]  The primary thinking behind this principle is that the agreements between private parties should mean something, and should not be overturned or interfered with.[16]

This “private association” principle presents a dilemma for judges in deciding cases where an arbitrator has already made a ruling.  Although a judge may have a strong opinion in certain cases, they typically are precluded from being able to overturn an arbitrator’s decision.  This is why Judge Berman’s overturning of Brady’s suspension was fairly surprising from a legal perspective.[17]  Many laypeople in opposition of Brady’s suspension were against the suspension because of the lack of concrete evidence against Brady.  Judge Berman did not overturn the suspension due to the evidence presented though; he overturned it due to the procedural steps that were not provided to Brady—notice and access to key information.[18]

How the Second Circuit decides the NFL’s appeal will not be based on whether Brady was involved in the football under-inflation, the evidence against him, or the report itself.  Its decision will be based on whether Judge Berman overstepped his bounds in overturning the hearing officer as set forth in the CBA; and in rendering its decision, the Second Circuit will be applying a de novo standard of review.[19]  Thus, while many people will see this decision as vindicating one of the two parties’ arguments, it is truly a procedural issue to be determined by the Second Circuit, and does not ultimately reveal anything about Brady’s guilt or innocence in Deflategate.

How Will the Second Circuit Decide?

The oral arguments that took place on March 3, 2016, started by focusing on Brady’s lack of cooperation in the initial investigation, and his destroying of his cell phone.[20]  When Brady’s attorney, Jeffrey Kessler, presented Brady’s oral argument, Judge Denny Chin had remarked that “the evidence of the ball tampering is compelling, if not overwhelming[,]”[21] and followed that question up by asking “why the three-judge panel should ‘second-guess’ the arbitration, meaning Goodell.”[22]

Due to the weight that courts have typically given to arbitrators, and the deference they have usually shown them, it was surprising to see Judge Berman overturning the NFL.  As such, it is likely—based on historical precedent and reports of the types of questions the Second Circuit panel asked of Brady—that the district court’s vacation of Brady’s suspension will be overturned.

Even if the Second Circuit rules against Brady, the case can still be remanded back down to the district court, instead of an outright reversal.  Kessler, arguing on behalf of Brady, stated that it should be remanded, because Judge Berman intentionally declined to rule on three alleged missteps by the NFL:  whether Goodell was ‘evidently partial’ by delegating his authority to NFL executive vice president Troy Vincent; whether Goodell unlawfully made factual conclusions that were outside the scope of the Wells Report and Brady’s appeal; and whether Goodell expressing support for the Wells Report after its publication prejudiced Brady’s chances for a fair appeal and thus prevented Goodell from lawfully serving as the arbitrator for the appeal.[23]

An order should be coming in the next few months, which will then shape how Deflategate will progress from here.

 

 

Cole Renicker is a second-year law student at Fordham University School of Law and staff member of the Fordham Intellectual Property, Media & Entertainment Law Journal.  Prior to attending Fordham Law School, Cole graduated from Penn State University with a degree in Business Management.

[1] Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 2015 WL 5148739, at *1 (S.D.N.Y. Sept. 3, 2015).

[2] Barry Wilner, Roger Goodell Upholds Tom Brady’s 4-Game Suspension, The Big Story (A P) (July 29, 2015, 12:33 AM), http://bigstory.ap.org/article/3a1406e0d40a4cb19a8d836c465843f8/bradys-suspension-upheld-nfl-commissioner-roger-goodell.

[3] See Nat’l Football League Mgmt. Council, 2015 WL 5148739, at *20.

[4] Michael McCann, Tom Brady Could Be in Trouble After Deflategate Appeal Hearing, Sports Illustrated, http://www.si.com/nfl/2016/03/03/deflategate-appeal-nfl-tom-brady-roger-goodell (last updated March 4, 2016).

[5] See id.

[6] See id.

[7] See E. Associated Coal Corp. v. United Mine Workers, Dist. 17, 531 U.S. 57, 67 (2000) (holding that there should be deference to a collectively bargained arbitrator’s decision in construing or applying a contract); Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504 (2001) (ruling that the Court of Appeals’ decision to overturn the arbitrator and decide the case on the merits was at odds with governing law); see also Nat’l Football League Collective Bargaining Agreement, art. XLVI §2 [hereinafter 2011 NFL CBA], https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf (providing for an agreed upon hearing officer, whose decision is final and binding over the parties, to hear players’ appeals regarding a disciplinary decision).

[8] Under art. XLVI § 2 of the NFL’s CBA, the NFL selects a hearing officer to rule on player disciplinary appeals.  The Players’ Union may suggest, or provide input into the selection of, a hearing officer, but the choice is ultimately made by the NFL.  The NFL Commissioner retains the power to appoint himself as the hearing officer for any particular appeal. See 2011 NFL CBA, supra note 7, art. XLVI §2.

[9] See 2011 NFL CBA, supra note 7, art. III.

[10] Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 2015 WL 5148739, at *11–20 (S.D.N.Y. Sept. 3, 2015).  Judge Berman determined that notice of potential punishments for certain violations needed to be conveyed to the players, and it was not provided to Brady. See id. at *15–16 (“A player’s right to notice is at the heart of the CBA and, for that matter, of our criminal and civil justice systems.”).  Additionally, Judge Berman determined that the Commissioner’s failure to permit Brady to cross-examine material witnesses, and not permit Brady access to the primary investigative files ran contrary to fundamental arbitral procedures. See id. at *16–20.

[11] See Nat’l Football League Mgmt. Council, 2015 WL 5148739, at *1.

[12] Id. at *20.

[13] See Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 88 F. Supp. 3d 1084, 1089–90 (D. Minn. Feb. 26, 2015).

[14] See 2011 NFL CBA, supra note 7, art. XLVI §2.

[15] “A most dramatic illustration of this principal occurred in Carr v. St. John’s University, 17 A.D.2d 632, 231 N.Y.S.2d 410 (1962), where the court refused to interfere with a university’s decision to expel Catholic students who had participated in a civil marriage ceremony.” Jan Stiglitz, Player Discipline in Team Sports, 5 Marq. Sports L.J. 167, 174 n.38 (1995). See generally Jeffrey A. Durney, Fair or Foul?  The Commissioner and Major League Baseball’s Disciplinary Process, 41 Emory L.J. 581 (1992); Christopher J. McKinny, Professional Sports Leagues and the First Amendment:  A Closed Marketplace, 13 Marq. Sports L. Rev. 223, 236–37 (2003).

[16] See Stiglitz, supra note 14, at 174 n.38.

[17] See Lester Munson, NFL Appeal of Brady Decision Could Lead to Precedent-Setting Court Ruling, ESPN (Sept. 3, 2015), http://espn.go.com/espn/otl/story/_/id/13572474/nfl-appeal-tom-brady-decision-lead-precedent-setting-court-ruling-lester-munson-writes. But see Nat’l Football League Mgmt. Council, 88 F. Supp. 3d at 1090–92.  The difference between Deflategate, and past situations where NFL arbitrators have been affirmed or reversed, is that the Commissioner was the one to hear Brady’s appeal, after having significant involvement in his initial punishment. See generally Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 2015 WL 5148739, at *1 (S.D.N.Y. Sept. 3, 2015).

[18] Nat’l Football League Mgmt. Council, 2015 WL 5148739, at *11–20.

[19] Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85, 89–90 (2d Cir. 2005) (“Where a district court denies confirmation of an arbitral award, we review its findings of fact for clear error, and its conclusions of law de novo.”).  The de novo standard of review is the most lenient standard, and makes it more likely that a lower court’s decision will be overturned.

[20] McCann, supra note 4.

[21] Id.

[22] Id.

[23] Id.

Reshaping the NCAA Market Power Discussion Post-O’Bannon

Ed O’Bannon was a member of the 1995 UCLA Championship Basketball Team, and the Tournament’s Most Outstanding Player. O’Bannon, now a car salesman, noticed something one day while watching a child play “NCAA Basketball” produced by Electronic Arts. What he noticed was a player, wearing the same number as he did, same height, and near identical attributes as himself, playing for UCLA. While his name wasn’t used, Ed wondered why he isn’t, or hasn’t been, compensated for someone else using his image and likeness in the video game.

O’Bannon, along with 20 other plaintiffs (including Hall of Famers Oscar Robinson and Bill Russell), brought suit in Northern District of California alleging the NCAA violated antitrust law by fixing player compensation, for usage of their image and likeness rights (“ILR”), at $0. At the time of the suit, players were barred from receiving any money generated from their ILR. This includes endorsements, merchandise sales, video games, or television exposure. The NCAA argued that in order to maintain a model of amateurism, these “student-athletes” are barred from profiting of their ILR.

Judge Claudia Wilken delivered a favorable holding for the players in early August. She ruled that the NCAA regulations prohibiting players from profiteering off of their ILR’s is an unreasonable restraint on trade violating Section 1 of the Sherman Act. Judge Wilken did not extend the holding to allow players from collecting their share of profits during their tenure as a player or in school. However, Wilken found delayed payment, held in trust, for the players and disbursed upon graduation or withdrawal, to be a reasonable restraint on trade, due to the a pro-competitive justification by the NCAA.

The NCAA has been characterized as a classic “cartel.” A cartel, in the eyes of antitrust law, is defined as a combination of producers of any product joined together to control its production, sale, and price, as to obtain a monopoly and restrict competition in any particular industry or commodity. The NCAA itself functions as a trade association that prescribes rules for its membership, comprised of over 1000 schools.

In bringing a Section 1 claim, the claimant must hurdle the threshold issues of 1) showing an agreement between two or more parties; and 2) that the alleged restraint affects interstate commerce. Both threshold issues are easily satisfied when analyzing rules prescribed by the NCAA. It has been clearly established, by the Supreme Court, due to the nature of sporting leagues, that the appropriate rule for viewing restraints of trade is the Rule of Reason, and not the Per Se rule. In a very basic explanation, the Rule of Reason, first looks to “Market Power” (Geographic and Product), and affords the ability to justify the restraint as a “reasonable” restraint because it is pro-competitive and is as least restrictive as possible.

Most significantly, in these instances, the NCAA holds complete market power in the services for Division 1 Basketball and FBS group licensing ILR. This is so simply because there is no reasonable alternative available. All member schools must assent to NCAA rules or face sanctions, and even expulsion from membership. Both measures demonstrate classic cartel behavior.

The NCAA has very recently dropped the rules prohibiting compensation beyond the stipends offered by teams. To counter the impending ramifications of being enjoined from enforcing these restraints, the “Big Five” Conferences, comprised of the ACC, Big 12, Big Ten, Pacific-12, and the Southeast Conference (SEC) have been given the autonomy to make their own rules regarding ILR compensation. While a loosening of the rules by the NCAA may seem on its face a big win for the players, it isn’t exactly the “no-strings attached” kind of a gift by the NCAA.

Going back to the Rule of Reason, the claimant must show that the alleged competitors have market power. Courts have generally held that in order to fall within the scope of Section 1, market power must near or above a 33% market share. Again, established in the NCAA O’Bannon case, the NCAA as 100% market power. However, by delegating the rulemaking to the Big Five, without further analysis, would appear that when each conference enacts a rule that it’s member schools agree on, they will fall below the a 33% market power share because each conference will, absent further analysis, account for only 20% market power.

What is most interesting is that not all conferences are created equal. Merely allowing 5 separate actors to make rules autonomously doesn’t necessitate equal market shares. Firstly, Conferences don’t all have the same amount of teams (ACC, Big Ten, and SEC each have fourteen; Pac-12 has twelve teams; Big 12 has ten teams). On its face, based solely on the amount of teams in each conference, the ACC, Big Ten, SEC would each have approximately 21.8%. The Pac-12, and Big 12 would have 18.7% and 15.6%, respectively. Further, the past 8 FBS Championship games have all featured teams from the SEC, with the SEC team winning all those contests except 2013. This seems to show more than just mere coincidence; it tends to show that in the market for elite player services, the SEC may control more of the market. A more detailed inquiry into the allocation of top recruiting classes may shed even more light onto actual market power, as opposed to the assumption of 20% per conference.

The market power determination will play an integral role in the rulemaking of the Conferences. In the past, some courts have tended to struggle with the economic analysis of antirust cases. It will be interesting to see how courts may come to grapple with this determination and also what new rules the Big Five will enact.

 

NFL Lawsuit Off To Mediation

The Honorable Anita B. Brody of the District Court for the Eastern District of Pennsylvania announced Monday that the National Football League and the approximate 4,000 individuals suing the League must go to mediation.  Former NFL players who suffered or fear permanent brain damage due to football-related concussions are suing the League for negligence and claim that the League concealed information.  According to one NFL.com reporter, the Judge’s “decision to move the case to mediation likely signals a belief that a settlement is possible with continued negotiations.”  ESPN.com also puts faith in the mediator, Layn Phillips, who used to be a federal judge in Oklahoma.

Back in August, the NFL filed a motion to dismiss with Judge Brody, claiming that the collective bargaining agreement covers safety and health rules and that it is up to each individual team to determine whether a player is fit to return to the field.

At the end of the day, since mediation is non-binding, Phillips may propose a settlement or conclude that a settlement is not feasible and therefore must return to Judge Brody.  If the latter is the case, then she will rule on the NFL’s motion.