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Tuesday, July 21, 2009
 
O'Bannon v. NCAA: Should Former Student-Athletes be Paid for the NCAA's use of their Images and Identities?

A few hours ago, former UCLA basketball star Ed O'Bannon, on behalf of a class of thousands of former men's basketball and football players, filed a class action lawsuit in the U.S. District Court for the Northern District of California over the NCAA's use and license of former student-athletes' identities in various commercial ventures. The claim is based primarily on Section 1 of the Sherman Act and the right of publicity.

O'Bannon has put together a high-profile legal team to represent him. His lead counsel is Michael Hausfeld, who successfully represented victims of the Holocaust whose assets were wrongfully retained by private Swiss banks during and after World War II. Hausfeld will be aided by several attorneys from Boies, Schiller & Flexner, a law firm which represented former Vice President Al Gore in Bush v. Gore, and by basketball legend and player rights’ advocate Sonny Vaccaro, who has been retained by Hausfeld LLC as an unpaid consultant (meaning he has no financial stake in the case). It stands to reason that these attorneys would only agree to represent O’Bannon if they were confident that his claims will survive the NCAA’s motions to dismiss and go to trial.

I have a column on SI.com about this lawsuit. An excerpt is below.

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O'Bannon v. NCAA stems from a series of documents Division I student-athletes are required to sign as part of their participation in college sports. Form 08-3a (the "Student-Athlete" statement) is one such document. Among other conditions, it specifies, "You authorize the NCAA . . . to use your name or picture to generally promote NCAA championships or other NCAA events, activities or programs." By signing the statement, student-athletes relinquish in perpetuity all future rights in the NCAA's licensing of their images and likenesses. O'Bannon claims that student-athletes -- some of whom are younger than 18 -- effectively have no choice but to sign, since they would otherwise be deemed ineligible to play and would risk losing their athletic scholarships.

In the NCAA's view, however, these documents promote the NCAA's core mission: the integration of intercollegiate athletics into higher education and the promotion of student-athletes' educational experiences. Along those lines, as a voluntary organization comprised primarily of colleges and universities, the NCAA tends to frown upon professional and other remunerative endeavors pursued by student-athletes.

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In assessing O'Bannon's claims, a court will consider the extent to which student-athletes possess a real "choice" when presented with the Student-Athlete statement and similar documents. On that front, O'Bannon appears emboldened by NCAA policies on student-athletes' access to legal counsel. According to O'Bannon, neither NCAA officials nor college athletic officials advise student-athletes that they can seek legal advice in connection with the release of future compensation rights. Particularly given the lack of "life experience" of most incoming student-athletes, such a policy may be viewed as arguably exploitative and also one that creates a disparity in bargaining power.

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To read the rest, click here.





9 Comments:

I am eager to follow this one. Any predictions on the outcome? With regard to liability, I really think the publicity rights claim is strong. I think that a jersey constitutes "identity," even with just a number, and the sales are certainly for a commercial purpose.

Except for counting jersey sales, however, it would seem that calculating damages could be difficult. For example, how do you figure out how much should be awareded for ad revenue generated by March Madness which is attributable to showing players in the NCAA's commercials? Or is that not a part of this suit?

What about the antitrust issue? Will the court be concerned that ruling against the NCAA on antitrust grounds would expose it to a flood of lawsuits, perhaps changing the landscape of major college sports?

Anonymous Wes -- 7/22/2009 9:00 AM  


Another great article!

Quick question on the ROP claim:
The NCAA has stated that the ROP belongs to the athlete, not the NCAA. But an important part of a ROP claim is that the use of a persons likeness be without consent. Clearly the athletes have consented by signing the student-athlete statement. Is the claim here that the consent is void based on contract principles?

Blogger Jimmy H -- 7/22/2009 9:17 AM  


Mike:

I enjoy all of your work but especially enjoyed this article. It's nice to see that O'Bannon got good counsel. The decision to file in the N.D. Cal. seems to make sense.

Jimmy:

Great question about the NCAA standard contract. While I cannot predict how a court would decide, if I were trying this case I would make the following four arguments about why the contract, if any, would be invalid: (1) the NCAA contract may be void for lack of consideration; (2) the NCAA contract may be void as a contract of adhesion; (3) 16 and 17-year old athletes may lack consent to waive their rights to publicity due to their status as minors; and (4) if the contract were separately found to violate antitrust laws, the contact could be void as illegal.

I am not sure exactly what theories will be argued; however, in my mind, there seem to be some doorways open.

Blogger Marc Edelman -- 7/22/2009 3:49 PM  


1. Consideration: What would you call free tuition, free room and board, free access to training facilitities and medical support, free individual training in their desired profession, free public exposure to potential employers, etc etc etc. How is that not consideration?

2. Certainly it is an adhesion contract, but that doesn't make it void.

3. Every Letter of Intent is signed by the parent or legal guardian, if the student is a minor.

4. That might work.

Anonymous sclawyer -- 7/22/2009 5:31 PM  


Here's how the NCAA plays:

1. Make TONS of money;
2. Distribute lots of it to some of its members (but not all);
3. Pay NO taxes then hide behind the 501 C 3 thingy and claim that it all adds to its mission and purpose of education;
4. Handle minor legal claims and try to use a smoke screen of issues (native american imagery; confederate flags; women's issues; pregnancy; disabilities...)for publicity purposes/public relations and to show how the organization fights for "rights"...."BUT THEN"....
5. For possible BIG $$$$ losers like this claim or the BCS antitrust thingy, fight, fight, fight, fight, fight... then at the courtroom door....the brink of disaster....either SETTLE or somehow buy your way out of trouble (ala MIBA-NIT case) after the huge loss in Law v. NCAA so as to avoid treble damages and attorney fees......
6. Start at #1 again and make TONS of money......

Anonymous Anonymous -- 7/22/2009 8:04 PM  


Thanks for these comments and I appreciate you all reading the column.

Wes,

I think the damages (assuming the legal claims are proven) could be very extensive. As I understand it, the NCAA has quite a few licensing agreements and if any contain images or other representations of the former players, damages could be found. In terms of quantitatively determining the damages, the plaintiffs and defendants would likely submit different proposed metrics and the court would have to choose one or adopt a blended approach.

Jimmy H,

Thanks for the nice note. O'Bannon is indeed arguing that the players did not know what they were signing, and that whatever legal rights may have been contracted away in the forms should not have been. He bases his claim in part on Oliver v. NCAA and the NCAA's rules on allowable counsel.

Marc,

Thanks for the nice words and you lay out a good strategy for O'Bannon in regards to the issue Jimmy identified.

sclawyer,

I agree there is probably consideration, but I don't believe he is challenging the letter of intent. As I understand the complaint, there is separate paperwork student-athletes must sign prior to their eligibility and receipt of scholarship, and according to O'Bannon, the NCAA forbids student-athletes' access to counsel when contemplating those forms. Moreover, I think it's fair to say that some parents or guardians may not understand the right of publicity and may not be able to provide effective counsel to their 17- or 18-year old sons.

Blogger Michael McCann -- 7/23/2009 9:14 AM  


I think this will be an interesting case to follow, but I'm not very sympathetic to O'Bannon's argument. Assuming the the release was entered knowingly and intentionally, all he did was sign over the rights to his image in a UCLA uniform. I think of it like an actor who makes a film at one point in time. Once the film is in the can, depending on what the contract says, the eceonomic rights to the images created in the film are set in stone in perpetuity. Whether it is DVD sales, toys in your McDonald's happy meal, or an image on the new ride at Six Flags, the actor only receives the compensation she agreed to when the contract was signed. Of course, the actor retains her rights in all other images not associated with the film. Why is this any different? O'Bannon owns and can fully exploit his image in anything not related to his UCLA playing days. If he can get EA sports to sign him to a deal to appear in a game about pick-up basketball in Henderson, Nevada, that's great.

Furthermore, it makes sense that the NCAA and its member schools would use one contract. Having the individual schools negotiate separate deals with athletes would be unworkable. How would we deal with an image of O'Bannon dunking on a player from Arizona if the player from Arizona had a different agreement? The NCAA Tounrament itself has 65 teams in it. Could CBS make individual deals with 65 teams despite the fact that many of the teams are not known until just a few days before the games start?

Anonymous Jerry Swindell -- 7/23/2009 1:21 PM  


written an interesting article

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