Judge rules against NCAA in Ed O’Bannon antitrust lawsuit

Reporting from Oakland —  U.S. District Judge Claudia Wilken dealt a major blow Friday afternoon to the NCAA and its long-held value of amateurism, ruling in an antitrust case that the association’s policies banning athletes from profiting from their own names, images and likenesses “unreasonably restrain trade.”

Wilken issued her ruling five weeks after a bench trial in the case brought by former UCLA basketball star Ed O’Bannon on behalf of Division I men’s basketball and football players concluded.

Wilken, however, stopped short of lifting rules that bar student-athletes to receive money for commercial endorsements while in school, saying that would “undermine the efforts of both the NCAA and its member schools to protect against the ‘commercial exploitation’ of student-athletes.”

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The NCAA had argued that the “procompetitive benefits” of prohibiting athletes from sharing in the multibillion-dollar collegiate sports industry justified the long-held policies, but Wilken disagreed.

“After considering all of the testimony, documentary evidence, and arguments of counsel presented during and after trial, the court finds that the challenged NCAA rules unreasonably restrain trade in the market for certain educational and athletic opportunities offered by NCAA Division I schools,” Wilken wrote in the 99-page ruling.

“The procompetitive justifications that the NCAA offers do not justify this restraint and could be achieved through less-restrictive means. The court … will enter as a remedy a permanent injunction prohibiting certain overly restrictive restraints.”

In a statement, the NCAA’s chief legal officer, Donald Remy, said: “We disagree with the court’s decision that NCAA rules violate antitrust laws. We note that the court’s decision sets limits on compensation, but are reviewing the full decision and will provide further comment later.”

Referring to action Thursday allowing the NCAA’s five wealthiest football conferences to pass legislation without the approval of the full NCAA membership, Remy added, “As evidenced by yesterday’s Board of Directors action, the NCAA is committed to fully supporting student-athletes.”

Plaintiffs, who filed the case a little more than five years ago, alleged the NCAA violates antitrust law by colluding with its member colleges and conferences in a scheme that amounts to price-fixing and refusal to deal.

The NCAA countered that it is a collaborative joint venture that has made rules in the interest of collegiate sports, thereby maintaining core values key to its fan base of amateurism and an integrated experience of academics and athletics.

Wilken’s ruling does not order revenue sharing but lifts the restriction that has barred Division I schools from doing so, and permits them to hand over to athletes the full cost of education and at least $5,000 annually held in trust while they are playing. If students stay four years, the latter amount would total in excess of $300 million, said William Isaacson, the co-lead attorney for the plaintiffs

“This is a big win for college athletes because now schools would be permitted to provide fair and reasonable sharing of revenues,” he said. “What her decision points out is that amateurism ended some time ago. This decision doesn’t end amateurism, it just points out the facts.”

Isaacson said the ruling permits them to share in a piece of the burgeoning pie of industry profits, though the amounts may seem modest.

“The clients will never notice this themselves financially. For them this is about change for the future and they’ve accomplished that.”

USC Athletic Director Pat Haden said the ruling was expected.

“This will still play out for some time and while it does, USC will remain committed to doing as much as we possibly can for our student-athletes within the NCAA rules,” Haden said in a statement.

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