Ed.: Class Action is a multi-part series exploring the numerous ongoing legal cases focused squarely on the NCAA and its rules regarding student athletes. Part I looks at rulings and ongoing cases that have redefined “full ride” scholarships, and outlines the inequitable approach to correcting the issue.
Co-conspirators. Restraint of trade. Injunction. Unfair use.
Sounds like the plot of a movie involving unscrupulous businessmen.
But those ominous terms are among those used in recent rulings against the NCAA – including one filed earlier this month — in cases involving college athletes who are seeking to proceed as a group with a class action lawsuit questioning, among other things, the disparity of the value between a traditional athletic scholarship and other expenses incurred by students during their college years.
Everyone has heard of a “full-ride” scholarship which most would assume covers all expenses associated with attending college while performing as an athlete for the school. But, traditionally, even a full-ride has excluded some necessary expenses associated with obtaining a college degree.
These expenses that were not previously covered by a full-ride are considered “indirect expenses” (i.e., not required to obtain a degree but necessary to college life), include transportation to and from college (e.g., airfare or auto mileage ),personal expenses such as clothing, entertainment, food, computers and cell phones, and even laundry.
But it also covers items that would not be considered “necessities” for the general student population. They could better be defined as “perks” for athletes. For example, it can be used to pay for travel for friends and family to an athlete’s post-season game. I doubt that financial assistance for a math major being inducted in Phi Beta Kappa would be available to get his or her family and friends to the induction ceremony.
Interestingly, the responsibility of calculating “cost-of-attendance” of student-athletes does not reside within the athletic department. The federal government requires the financial aid office at each school to provide a “good-faith” estimate of these figures for ALL students, whether engaged in collegiate athletics or not. Since the authority falls outside the athletic department, the financial aid officials do not remove the extra amounts granted to athletes from their computations. That means that, by increasing the benefits due to some students (e.g., athletes), the total of benefits awarded increases. That, in turn, means that the average assistance available to all students decreases, leaving non-athletes with less college-provided money — and more of a need for student loans.
The disparity between a full-ride and cost-of-attendance varies widely from school to school, even within the same conferences – and even within the same state. Among the Power 5, the additional amount ranges from $5666 (Tennessee) to $1400 (Boston College).
To better understand how we got to this point, a history of the legal actions is in order.
In 2009, Ed O’Bannon was the named plaintiff in a class action filed against the NCAA for financial compensation based upon the NCAA’s use of former athletes’ likenesses and images for its own commercial gain. Ed O’Bannon was a star power forward for the UCLA Bruins two decades ago. Some consider O’Bannon to have been a key factor in the Bruins’ 1995 NCAA championship. He won the tournament’s Most Outstanding Player award and also earned the USBWA College Player of the Year and the CBS/Chevrolet Player of the Year awards. He was also a consensus first team All-American.
O’Bannon was drafted ninth in the 1995 NBA draft by the New Jersey Nets but only played a couple of years in the NBA. As of 2009, O’Bannon was the marketing director a Las Vegas auto dealer.
The basis of the O’Bannon suit was that, once an athlete has graduated, he or she should legally share in profits the NCAA makes when that athlete’s likeness and/or image from his college career is used for commercial purposes and financial gain.
Electronic Arts (EA) and The Collegiate Licensing Company were also named as defendants in the suit. In May 2014, both parties agreed to a $40 million settlement that could result in payment of up to $4000 each to as many as 100,000 current and former college athletes whose likenesses had appeared in EA Sports video games since 2003. This left the NCAA as the lone defendant in the O’Bannon case.
In August 2014, California U.S. District Judge Claudia Wilken ruled in O’Bannon and the other former players’ favor, finding that the current NCAA practices violated antitrust law as an unreasonable restraint on trade. The NCAA must now ALLOW (but not require) schools to offer “full cost-of-attendance” scholarships, as opposed to the NCAA’s current exclusion of cost-of-living expenses from scholarships.
Judge Wilkins’ order also required the NCAA to compensate athletes for their “appearances” that benefitted the NCAA, with each college “permitted” to place up to $5000 per athlete into a trust fund for each year of each athlete’s eligibility which could later compensate them when they were no longer under the “non-income” auspices and regulations of the NCAA. That part of the ruling was overturned by the Ninth Circuit Court of Appeals in October of last year after the NCAA appealed. The higher court said that offering that compensation to college athletes was “untethered to educational expenses” and would basically turn NCAA sports into “minor league[s].”
Apparently the rulings not only affect college athletes, but loyal gamers as well. Just ask Kirk Herbstreit: the fact that he can’t get his game on is apparently the fault of Ed O’Bannon. In a quote from earlier this year, he placed the blame for the end (or at least hiatus) of EA Sports squarely on O’Bannon’s shoulders, saying: “[he] ruined it for all of us.” Of course, Herbstreit was one of the announcers who were compensated for his work by EA Sports games so his bitterness may have other origins.
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