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Sunday, July 26, 2009

Ind. Courts - "Three lawsuits may change how NCAA operates"

Mark Alesia of the Indianapolis Star reports today that: "The NCAA has spent more than $84 million defending lawsuits since 1995. Three ongoing lawsuits could reshape the relationship among the NCAA, universities and its athletes." See these ILB entries from May 7th and July 22nd, along with this one from Feb. 13th, for background.

Alesia writes today:

The NCAA maintains it serves the interests of universities and their athletes. But the ever-expanding commercialism of college sports increasingly places those interests at odds.

The result is a new string of legal challenges brought against the National Collegiate Athletic Association by athletes who think they have been unfairly used for financial gain or hamstrung as they pursue their own financial gain.

Those challenges not only may redefine the relationship among the NCAA, universities and athletes, but they also come with a hefty price tag.

Since 1995, the Indianapolis-based NCAA has spent more than $84 million on legal fees, a figure that includes some of its settlements, according to The Indianapolis Star's analysis of Internal Revenue Service filings and interviews with the NCAA.

It might not be unusual for a business of similar size -- the NCAA reported revenue of $657 million in 2007-08. But experts said the nonprofit NCAA -- classified by the IRS as an educational organization -- is an inviting target for lawsuits as it tries to balance the ideals of higher education and amateur sports with the demands of a sprawling sports entertainment industry.

The latest athlete to take aim is former UCLA basketball star Ed O'Bannon, who last week filed an antitrust lawsuit contending that the NCAA and its member schools illegally profit from using former players' images in DVDs, TV ads and other commercial pursuits.

The legal target on the NCAA's back grows with every lucrative new television or coach's contract, said Gabe Feldman, director of the sports law program at Tulane University.

"What might be changing is that the NCAA for years has been given great deference by courts for rules to preserve amateur and educational goals," Feldman said. "Some of that deference fades as it appears the inequity grows larger between what the athletes get and the schools get." * * *

O'Bannon's class-action lawsuit, which focuses on the sale of players' images after they leave school, has the potential to inflict large financial damage on the NCAA. Antitrust judgments are automatically tripled.

But it's another pending case that, because of its effect on amateurism rules, "could unravel the way the NCAA operates entirely," said Gary Roberts, dean of the Indiana University School of Law-Indianapolis and an expert in sports law.

In February, an Ohio judge ruled in favor of then-Oklahoma State University pitcher Andy Oliver, striking down an NCAA rule prohibiting players from having agents, as Oliver did in high school.

The judge said the rule -- and an exception allowing players to consult with agents (but not have them negotiate with a pro team) -- "hinders representation by legal counsel" and is "fraught with ethical dilemmas."

The judge in the case also struck down a rule forcing schools to risk financial and other penalties if they don't immediately suspend players the NCAA says have violated a rule, even if there's a court injunction allowing the person to play.

Roberts has written that the NCAA rule is necessary. He argued that it's necessary to prevent cheaters from obtaining short-term injunctions to play in important games. Such injunctions, he wrote, would come from "local judges who often act out of partisan or parochial interests."

A jury trial to decide damages in the Oliver case is scheduled for October. * * *

A lawsuit filed in May by former Arizona State and University of Nebraska quarterback Sam Keller takes aim specifically at the use of players' images in the sale of video games.

All three plaintiffs -- Oliver, O'Bannon and Keller -- have significant obstacles to overcome, Feldman said. Courts already have narrowed players' publicity rights, and O'Bannon's antitrust claim will have to show consumer harm, he said.

Oliver might have the toughest road.

"It's an attack closer to the NCAA's core mission," he said. "The closer you get to rules on amateurism and eligibility, the more difficult it is to overturn."

But even if the NCAA prevails in these cases, it seems likely lawsuits will continue. In part, it's a response to the astounding money to be made from amateur athletics.

Posted by Marcia Oddi on July 26, 2009 02:16 PM
Posted to Indiana Courts