University of Illinois labor and employment relations professor Michael LeRoy is an expert in collective bargaining in athletics and the author of the legal casebook “Collective Bargaining in Sports and Entertainment.”
In an interview with News Bureau business and law Editor Phil Ciciora, LeRoy discusses the implications of last Friday’s (August 8, 2014) decision by a federal judge in O’Bannon v. NCAA, which ruled that the sport’s governing body violated antitrust law by prohibiting student-athletes from being compensated for the commercial use of their image.
Was this ruling an upset victory for the players over the NCAA?
The ruling is consistent with my research showing that in lawsuits by student-athletes against the NCAA, student-athletes win all or part of 57 percent of district court cases located in the 9th Circuit, where U.S. District Judge Claudia Wilken sits.
But my data also show that the NCAA wins 67 percent of appealed cases. In this case, the NCAA will have a good chance of prevailing on part or all of its likely appeal.
What is your take on the ruling itself?
On the one hand, the ruling has a Solomonic quality. It applies prospectively, so the NCAA has time to budget for new liabilities. The ruling caps compensation for student-athletes at $5,000, and it orders that this money be placed in a trust until claimants have exhausted their NCAA eligibility. It appears to be affordable for large athletic programs, where the bulk of the claims would most likely be made.
On the other, it looks more like a legislative resolution. Why, for instance, are current student-athletes not immediately eligible for compensation? And where did the judge come up with a $5,000 cap? The figure appears to come from the record created during the trial, but the nice, round nature of that cap seems as arbitrary as a zero-dollar limit. Didn’t Johnny Manziel have more player-image market value than $5,000 in 2013?
Looking more broadly, the ruling will add to the pressure faced by the NCAA and Division-I programs to share the wealth they are making off the entertainment value of college sports. Notably, Judge Wilken concluded that the plaintiffs had presented “sufficient evidence to show an analogous anticompetitive effect in a similar labor market.”
This analysis has implications for a pending lawsuit that alleges the NCAA’s amateur rules illegally restrain the market for paying college football players for their labor.
