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O'Bannon's Slam Dunk

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The world of college athletics was changed this week by the decision of a federal district court judge in California who ruled that the NCAA violates the nation's antitrust laws when it prohibits college athletes from marketing their names and likenesses. The court's antitrust analysis, which appears to be spot on, will be fascinating to my colleagues who specialize in the field. For the rest of us, the O'Bannon decision will stand as a watershed event in the evolution of college sports.

Judge Wilken's opinion plainly rejects the NCAA's often used defense that its actions are motivated by a singular goal - to maintain and strengthen its brand of college athletics as amateur sports. She also rejects the claim that this NCAA restriction was designed to enhance competitive balance - some amorphous standard that no one can define. In the process, Judge Wilken discredits numerous academics and their work product, while extolling the work of Stanford Professor Roger Noll, the plaintiffs' expert. The court's opinion will be must reading this fall in every Sports Law course in the country.

In a few short weeks, college football will again reappear. This fall the major collegiate powers will compete for inclusion in the first national football championship playoff. Those who enjoy college athletics should not worry about the impact of the court's opinion on one of their favorite sports. It will have no immediate effect. The court issued an injunction that will keep the NCAA from enforcing its rule that prohibits college athletes from benefitting from the marketing of their names and likeness. The order does not require that colleges and universities compensate the players any more than they do now, but it is foreseeable that players will receive a modest amount - up to $5,000 - that will narrow the gap between their scholarship and what college actually costs. The games will proceed as planned.

The NCAA's response to the court's decision, however, was disappointing, albeit exactly what one might have expected. The NCAA will appeal. When it loses in the Ninth Circuit, it will appeal again, seeking a grant of certiorari in the Supreme Court. The problem it will face is that the record before those courts will not support the Association's broad claims that its anti-competitive policies are essential to produce college athletics.

Instead, the NCAA should use this decision as the reason for rethinking the Association's goals and objectives. Faced with the potential deconstruction of its core strategy - maintaining the current constraints on college athlete compensation - the NCAA should convene a strategic planning process that will positively and actively respond to the challenges the Association and its members face.

In a few weeks, the National Labor Relations Board will likely affirm the decision of the Regional Director of the Labor Board that held that the football players at Northwestern University were "employees" covered by national labor law. Even if it turns out that those players voted down the union, the Northwestern Labor Board decision will offer to athletes at private colleges the option of unionization if their legitimate concerns are not addressed. Colleges and the NCAA must act now before the Labor Board rules to stay ahead of these foreseeable events, rather than simply react to them after the fact.

It is difficult to conceptualize exactly what the NCAA will be in five years, but we can say with some certainty that it will be very different from what it is today and what it has been over the decades. The reason why circumstances have changed is that the NCAA has been so successful in marketing college athletics. The abundance of resources produced by football and men's basketball has altered the context. It is no longer sufficient simply to respond to events by appealing unfavorable decisions.

Those who have followed the O'Bannon case are not surprised by the court's decision. The NCAA no longer makes all the rules in college athletics. It shares that responsibility with the courts that will enforce the nation's antitrust laws. Courts will act in response to complaints filed by college athletes who believe that they should have the same rights as others in society - to be compensated for their contribution to an entertainment product that has enormous economic value. That does not mean the end of college sports. It does mean it is time to think carefully and creatively about the role athletics play in higher education and how the profits of the enterprise can be more equitably distributed.

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