Why the NCAA Could be Taking a Huge Risk in the Ed O’Bannon SuitPosted by Chris Johnson on September 27th, 2013
Chris Johnson is an RTC Columnist. He can be reached @ChrisDJohnsonn.
It wasn’t so long ago that we discussed the possibility of former UCLA basketball player Ed O’Bannon and his group of plaintiffs being granted class certification by U.S. District Judge Claudia Wilken in their lawsuit against the NCAA, Electronic Arts and the Collegiate Licensing Company. Thursday’s news forced a revision of that statement. The lawsuit now counts one defendant: that four letter institution we love to hate, the NCAA. Hours after EA announced it would no longer manufacture its popular college football video game, the video game company and CLC announced a settlement of a wide swath of cases brought against them by former players. The settlements, according to reports, will result in between 200,000 and 300,000 players receiving compensation for the previous use of their likenesses. Current players could also be in line to receive compensation, though it is unclear whether accepting money would compromise their eligibility. It is believed EA’s decision to cancel its production of NCAA Football – and thus dissociate itself from its sticky and laughably contrived argument that player likenesses were not modeled after real-life human characteristics (even after SB Nation discovered the use of former Florida quarterback Tim Tebow’s name in virtual playbooks designed by EA for its NCAA Football ’10 game) – was a preemptive move to eliminate the possibility of “damages” against current student-athletes, whose likenesses would have been used in the game.
That leaves the NCAA – who according to a USA Today report Thursday, is beefing up its legal team with the intention of fighting its case all the way to the Supreme Court – as the lone defendant. If the NCAA is truly bent on embarking on a long, drawn-out, high-profile legal battle, it risks not only having to pay billions of dollars to current and former players. It won’t have any say in when it must make those payments. O’Bannon and his plaintiffs, in other words, could be entitled to massive sums over a compressed time period after the trial. That’s a risk the NCAA appears willing to take, given its reported hiring of powerful attorneys. But is that a wise strategy? Or should the NCAA take EA and CLC’s lead and try to negotiate a settlement? We probably won’t find out until Wilken decides whether to certify O’Bannon’s class – which, according to legal experts, is likely to be the case. What’s interesting about EA and CLC’s decision to settle is the implicit message it sends – that the class is likely to be certified, and that cutting their losses now and reaching a deal before making themselves liable to much, much larger payments in a class action suit was the most prudent move available. It almost seems as if EA and CLC saw the writing on the wall. Another interesting part of this settlement comes from Sports Illustrated legal analyst Michael McCann, who suggests O’Bannon and his plaintiffs are “likely demanding information that would help them advance legal claims against the NCAA. A settlement with EA and CLC, in other words, makes one with the NCAA more likely.”
If O’Bannon and co. did receive important information that could more quickly lead to a settlement, the NCAA’s public combativeness – we’re taking you all the way to the Supreme Court whether you like it or not – is either 1) public relations posturing; or 2) really interesting. The explanation for the latter option is simple: If the NCAA plans to take O’Bannon and his plaintiffs to the highest level of the American judicial system – a case that, with appeals, experts estimate would drag on for years – it is chancing the possibility of having the nature of its future existence (or lack thereof) decided not on its own terms through a negotiated settlement, but by the potentially crippling financial repercussions of losing a landmark Supreme Court case. The information O’Bannon’s side may or may not have received in its settlements with EA and CLC could eliminate that possibility and lead – despite public lip service (and credentialed lawyer brandishing) to the contrary – to a settlement with the NCAA sooner rather than later, which could allow the organization to prorate its potential payments (which would be reduced if it decides to settle) to players over a longer period of time, meanwhile slowly ushering in a new workable model for how college athletics will be governed going forward. That seems like the most reasonable move for the NCAA.
The alternative could be devastating.