There are two important consequences of a long-awaited ruling last week by a federal judge, Claudia Wilken, in the so-called O’Bannon case: College athletes will almost certainly be better off financially, and the notion that these athletes are pure amateurs — “students first, athletes second” — will be impossible to sustain.
In her 99-page decision, Judge Wilken issued an injunction against a ban on payments to players for the commercial use of their names, images, and likenesses, which she said violated antitrust law. She also ruled that college sports’ governing body, the National Collegiate Athletic Association, may not prohibit universities from offering cost-of-living stipends in addition to scholarships.
Judge Wilken’s ruling represents a big victory for Ed O’Bannon, a former basketball player for the University of California, Los Angeles, and players like him who until now have been unable to share in the considerable wealth generated by their skill and hard work. Mr. O’Bannon agreed to be the lead plaintiff in a suit arguing that college players had a financial interest in products or advertising that exploited their names and images.
Although the NCAA is the clear loser here and has announced plans to appeal, the reach of the decision should not be overstated. Post-O’Bannon, collegiate athletics won’t operate according to free-market principles. Far from it.
Players did not win the right to sign endorsement deals. And the NCAA may cap payments to players at $5,000 a year — comparable to the amount that the NCAA permits players to receive if they qualify for a Pell grant. Colleges, moreover, may keep these payments in trust until after the players graduate or leave.
In making these compromises, Judge Wilken acceded to what she called the NCAA’s “legitimate pro-competitive goals” — its fear that a totally free market would mostly benefit the richest colleges, which could pay players the most and gain a major recruitment advantage.
The cap will make the post-O’Bannon future less chaotic. Still, it won’t be easy for the NCAA to adjust to the new order. Over the next months and years, it will have to figure out how to administer a trust fund, determine whether the ruling applies to all sports and all divisions or only some, and learn how to pay players without violating Title IX, the law that bans sex discrimination at educational institutions that accept federal funds.
The NCAA and its member institutions have no one to blame but themselves for any unintended negative consequences. They built a lucrative commercial enterprise that depended in large part on unpaid labor. Now they have to move forward without exploiting the students they have always purported to protect.
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