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Wednesday, August 15, 2012
 
Why inclusion of 1992 Dream Team members in NBA2K13 may help Ed O'Bannon in O'Bannon v. NCAA

Good news for fans of the popular video game series NBA2K: this year's game, NBA2K13, will include all but one member of the 1992 Dream Team. Why? Because the game's publisher, 2K Sports, negotiated individual licensing contracts with 11 members of the Dream Team, including Michael Jordan, Larry Bird and Magic Johnson (2K couldn't strike a deal with Scottie Pippen).

Undoubtedly, the game is poised to generate more sales with the Dream Team in it, especially among those of us who are old enough to remember the Dream Team. As a teenager in 1992 who bought EA Sports' Team USA Basketball for the Sega Genesis just to play as the Dream Team, I may just have to pick up a copy of NBA2K13 for my XBox 360.

Members of the Dream Team will of course be compensated by 2K Sports for the use of their name and likeness. It sounds like an obvious point, but again, notice how members of the Dream Team were capable of doing their own deals, and as Pippen shows, capable of declining a deal.

One of Ed O'Bannon's antitrust arguments in his class action lawsuit against the NCAA and the Collegiate Licensing Company (CLC) is that ex-NCAA basketball and football players are capable of negotiating their own licensing deals for video games, and the market would be more competitive if they could. Under NCAA rules, they aren't able to enter into such contracts; instead, CLC negotiates on their entire behalf (and, of course, players are barred from any compensation). If ex-NBA players can negotiate their own deals with 2K Sports, why couldn't ex-NCAA players do the same with video game publishers?

Will be interesting to see if NBA2K13 works its ways into the O'Bannon litigation.

Update 1:45 PM: Great point by Ryan Rodenberg on Twitter:
@McCannSportsLaw Also interesting to note that then-college player Christian Laettner is part of the game (and negotiated his own deal?).
Assuming Laettner, like the other Dream Team members, negotiated his own deal, then I believe he would be the first player to negotiate a licensing deal for his basketball performance while he was still an NCAA student-athlete. Would seem that the NCAA's exemption language for NCAA student-athletes who are competing in the Olympics, as Warren Zola wrote about for Sports Law Blog on Monday, would be in play.

Update II August 28 10:00 pm: Scottie Pippen signs last-minute deal to be in NBA2K13 - the Dream Team will be complete. Looks like players can decide if and when they want to be in video games.





6 Comments:

Very interesting points. However, I could see the NCAA arguing that negotiating with 12 retired, professional players is a much simpler endeavour than negotiating with the hundreds (or even thousands) of NCAA student-athletes. Thus, the NCAA could argue that it provides athletes with a benefit by acting as a conduit and simplifying the transaction costs associated with such negotiations.

Additionally, the former players are all professionals and, likely, have a team of agents and managers capable of protecting their interests in any negotiation, not to mention the benefit of experience through previous endorsement negotiations. This creates equal bargaining power between 2K Sports and the Dream Team members. Conversely, I believe NCAA rules forbids athletes from being in contact with agents. Again, the NCAA could argue that it has the resources to be in a better position to fairly negotiate than its students-athletes. At the same time some Olympians are able to negotiate sponsorship deals while maintaining their amateur status. I would guess that if O'Bannon is successful, this rule could be abolished.

Just the two cents of a law students who loves sports, for what it's worth.

RP

Anonymous Anonymous -- 8/15/2012 12:47 PM  


Very interesting points. However, I could see the NCAA arguing that negotiating with 12 retired, professional players is a much simpler endeavour than negotiating with the hundreds (or even thousands) of NCAA student-athletes. Thus, the NCAA could argue that it provides athletes with a benefit by acting as a conduit and simplifying the transaction costs associated with such negotiations.

Additionally, the former players are all professionals and, likely, have a team of agents and managers capable of protecting their interests in any negotiation, not to mention the players also have the benefit of experience through previous endorsement negotiations. This creates equal bargaining power between 2K Sports and the Dream Team members. Conversely, I believe NCAA rules forbids athletes from being in contact with agents. Again, the NCAA could argue that it has the resources to be in a better position to fairly negotiate than its students-athletes. At the same time, Olympians are able to successfully negotiate their own sponsorship deals while maintaining their amateur status. I would guess that if O'Bannon is successful, this rule could be abolished.

Just the two cents of a law students who loves sports, for what it's worth.

RP

Anonymous Anonymous -- 8/15/2012 12:50 PM  


I know it wasn't intentional but sexemption is a great word.

Blogger Unknown -- 8/15/2012 2:24 PM  


Laettner played on the dream team in July/August 1992 and was drafted into the NBA in June 1992. Without getting into semantics regarding when practice started, when rosters were finalized, etc., his Dream Team performance took place when he was a pro.

Anonymous Anonymous -- 8/15/2012 2:34 PM  


Laettner had graduated from Duke in May 1992 and was drafted by Minnesota in June 1992. While I have no idea if he was under an NBA contract that summer, he had exhausted his eligibility and certainly was no longer an amateur as the NCAA defines it.

Blogger Pat -- 8/15/2012 2:43 PM  


Calling Laettner a college player in the context of the Dream Team seems a little off, considering he played his final college game on April 6th, the Dream Team had their first practice in June after he graduated from college, he was drafted by Minnesota on June 24th, the Dream Team played their first real game on June 28th and the Olympics actually started in late July. So, he was basically a rookie NBA player by the time that the Dream Team took the court.

Anonymous Anonymous -- 8/15/2012 6:01 PM  


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