The O'Bannon trial wrapped up Friday night in the Northern District of California. Judge Claudia Wilken heard 24 witnesses from both the Ed O'Bannon plaintiffs and the NCAA.
And now she'll determine the future of college sports. The crux of her decision is whether the NCAA has caused anticompetitive harm through its compensation limits on athletes.
For the plaintiffs to win, they had to prove that athletes, schools, and/or consumers are being harmed by the NCAA's restraints on athletes getting paid. The NCAA was forced to prove why its system is pro-competitive, and why athletes wouldn't make any money in an open market.
So let's take a look at who won each of the four biggest arguments and what happens next.
Argument 1: Would paying players ruin competitive balance?
The organization claims competitive balance has enough benefit that it should allow it to continue the generally anticompetitive practice of prohibiting schools from paying players. But it faced two tough questions: would paying players really ruin competitive balance, and is there even any competitive balance right now?
The plaintiffs immediately went after the latter part, claiming that the competitive balance schools cherish doesn't even exist. For example, the current rules might make Iowa State feel better about its chances of competing with Alabama, but in reality, Iowa State doesn't have a chance to be a contender no matter what the rules are.
The evidence seemed to back the plaintiffs up (Bob Bowlsby is the Big 12's commissioner):
Plaintiffs introduce a quote from Bob Bowlsby that "the concept of competitive equity through rules management is largely a mirage."— Stewart Mandel (@slmandel) June 10, 2014
Competitive balance is one of the NCAA's defenses. Plaintiffs showing charts on how relatively few D-1 teams win titles, rank in Top 25.— Stewart Mandel (@slmandel) June 10, 2014
The NCAA responded by saying it doesn't want there to be too much balance, and that it has the exact right amount of competitive balance. The organization's lawyers said that if athletes are paid, Gonzaga might not be able to take recruits from Washington State because Gonzaga would have less money. But Wilken pointed out the flaws in that argument, saying no school would have less money than they do right now. Rather, money would just be redistributed.
Wilken interjects: "Well, (Gonzaga & WSU) would still have the same amount of money they have now. They'd just distribute it differently."— Stewart Mandel (@slmandel) June 26, 2014
Given Wilken's comments, it's hard to see the NCAA winning the competitive balance argument. And when all is said and done, we might see more balance in recruiting if O'Bannon wins. Either way, the landscape will look relatively similar to how it does now even if players are paid. Wilken seems to agree.
Argument 2: Would paying players actually hurt their educations?
The NCAA argues that paying players is akin to professionalizing them. Thus, it would hurt the schools' academic missions.
However, Wilken told the NCAA beforehand that it has to show how its rules "actually contribute to the integration of academics and athletics," and furthermore, why that integration is necessary. The problem is, those are very hard things to prove without just using rhetoric. And not surprisingly, the NCAA couldn't prove them.
Rubinfeld: NCAA rules improve quality of athletes' education, evidence of pro competitive benefit. Wilken: "Why is that pro competitive?"— Stewart Mandel (@slmandel) June 26, 2014
The NCAA's only answer to this is that it's within the schools' missions to provide educations for athletes, and athletes can't get educations if they're paid, because there would be no incentive to go to class. However, the existence of work-study students and the lack of restraints on any other students from profiting off what they do show there is no tie between compensation and the integration of students with their work.
Edge: Strong O'Bannon
Argument 3: Would paying players break Division I?
The NCAA argues that smaller schools would drop out of Division I if some of the larger schools paid players. And while "drop out" is probably the wrong term (Division I seems to be a pretty good deal), there is the possibility that there will be a de facto split in which teams that don't pay athletes will play teams that do less. There's also the chance that the bigger schools that pay athletes could form their own division and only play each other.
However, even if that split happened and there were fewer teams in college sports' top division, Wilken seems to see output differently. She's seems to be more concerned about the number of games schools play — the NCAA tried to say schools will play fewer games — and doesn't see why the big schools wouldn't just play each other more.
Wilken: Why would there be fewer games? They could compete against some other school? Why a net fewer of games?— Jon Solomon (@JonSolomonCBS) June 26, 2014
There would still be the same number of games, but we'd see more SEC vs. Big 12 and Southland vs. SWAC instead of SEC vs. Southland and Big 12 vs. SWAC.
So the NCAA might be right about output, the way it defines the term. But if Wilken defines it differently, then being right on its own terms is irrelevant.
Edge: Slight O'Bannon
Argument 4: Do athletes have television rights?
On the surface, this seems like an obvious question. The NCAA argues that broadcasters just want to broadcast college stadiums because of the platforms the schools provide, and if players happen to run in front of the cameras, so be it. But deeper than that, the argument could actually make sense.
It's not necessarily illegal for the NCAA to keep all of the television money for itself. Olympians, for example, don't get any money directly from the IOC for the use of their NILs (names, images, likenesses). Had the NCAA's contract left NILs out entirely, it would have had a pretty good case on this subject, but contracts showed the organization and the schools might be selling athletes' NILs illegally.
Contract has specific language guaranteeing Fox's ability to use the names and images of the participants.— Brad Wolverton (@bradwolverton) June 12, 2014
NCAA guaranteed CBS that it had secured all necessary rights, and stood behind that with indemnification clause #NCAAtrial— Tom Farrey (@TomFarrey) June 12, 2014
The NCAA claims those rights were for promotional use of NILs, which athletes sign over to their schools, but the language in the contracts casts serious doubt on the claim that athletes' NILs are worth nothing. If they're worthless, then why would they need to be included in the contracts and sold?
The testimony of EA executive Joel Linzner was just as damning. He said that EA had been interested in paying for players' NILs and would be interested in re-entering the college football video game business if the NCAA allowed athletes' NILs to be sold. If that doesn't show the presence of a market, I don't know what does.
However, given the complexity of the case, the NCAA could get a win here. Are the athletes buying educations or are they selling their NILs? Or are the colleges the ones selling services?
Wilken to plaintiffs: What is the product in the [allegedly impacted] market? Is it a college education or is it the games?— Stewart Mandel (@slmandel) June 27, 2014
And as the NCAA says, its alleged restraint isn't connected to NILs.
NCAA atty says there is a fundamental problem with case. The restraint of the scholarship is not related to NIL money.— Ben Strauss (@bstrauss1) June 27, 2014
Wilken seems focused more on restraint in general than NIL restraint. Take the Olympic model, for example. Athletes get bonuses from their Olympic committees — bonuses not regulated by the IOC — but it's not specifically from broadcast money. That might have been a better thing for the plaintiffs to focus on.
Wilken to plaintiffs: "Why did you go with the NIL thing instead of just saying you want to pay them more?"— Jon Solomon (@JonSolomonCBS) June 27, 2014
The NCAA is going to lose something, most likely its restraint on athletes being compensated for endorsements. And its restraints on colleges/conferences paying what they want are also in jeopardy. But if it has the chance to get a really big win, it will be on NIL rights. There's still a chance Wilken will decide that NIL rights do exist and should be sold by the players, but this seems to be the most ambiguous part of the case.
If the eventual outcome means the NCAA has to allow players to make money on their own, but that it doesn't need to explicitly share its television money, that's probably the best result the NCAA could realistically have hoped for.
Edge: Slight NCAA
Wilken isn't likely to make her decision until August.
And since this trial is about injunctive relief, not any specific damages, that decision will help decide what the future of college sports looks like. The plaintiffs have submitted a proposal in which the conferences hold the power in determining how much athletes make. But that's not necessarily how the injunction would look. Rather than make the market more open, Wilken acknowledged that she could theoretically impose a salary cap of some sort, though that would be pretty unprecedented.
Judge: could we have a salary cap on how much student-athletes were paid, or would that be antitrust violation? Me: sounds like new lawsuit!— Michael McCann (@McCannSportsLaw) June 27, 2014
A judge imposing a salary cap on how much money colleges spend on sports is an idea I'd tell my students could never happen. I may be wrong.— Michael McCann (@McCannSportsLaw) June 27, 2014
But this isn't the end of the trial. The real fight begins on appeal.
Many people have speculated that the NCAA has been playing for appeal all along, knowing it had no chance once Wilken disregarded two of its pro-competitive arguments: that amateurism is special and that football and men's basketball players can't be paid because it would force other sports to be cut. For the NCAA to truly win, it needs to win on every account, and it's going to be very hard for the organization to keep players from marketing themselves without those arguments. While neither argument is very good, the NCAA felt it needed both of those to argue its case, so it set up its appeal early and often, objecting to basically everything the plaintiffs said.
The fact that the organization's witnesses struggled so badly already puts them at a disadvantage, but they'll have their say in appeals court. And they'll appeal the decision all the way up to the Supreme Court, if they can.
And if the NCAA does ultimately prevail against O'Bannon, an even more aggressive lawsuit awaits.
There's also another avenue the NCAA is exploring: gaining Congressional support. It's obvious some things in collegiate athletics will need to change, but there is a strong group of Republicans in Washington who are staunchly opposed to any kind of NCAA change, especially since the word "union" is now in the mix. The NCAA recognizes this, and it hired a lobbying firm with deep Republican ties. Ultimately, the organization might see circumventing the courts for Congressional protection as its best option.