College players, it seems, are about to get paid.
Exactly who will receive money, and how much of it, is still to be determined. But still, wow: the college pay-for-play movement, once relegated to the far-corners of academia, has now achieved some tangible results. According to federal court filing on Thursday, both Electronic Arts, maker of a popular NCAA-branded football video game (and, until 2010, a college basketball video game), and the Collegiate Licensing Company, a marketing and licensing firm, settled with the plaintiffs in the much-publicized O’Bannon lawsuit.
This suit, which actually combined three different complaints concerning the ability of former and current college players to financially benefit from the use of their likenesses, is headlined by former UCLA basketball star Ed O’Bannon, who originally filed his action back in 2009. The terms of the settlement are confidential, and a federal judge must approve them. But Eugene Egdorf, one of the plaintiff’s lawyers, estimates that between 50,000 to 100,000 college football and basketball players will be entitled to share in the settlement.
Though the O’Bannon case hasn’t been officially stamped as a class-action suit, “the parties agreed to a class-action structure to let the settlement proceed,” says Egdorf. The Birmingham News first reported the settlement. Also, EA announced on its website that it would not produce a college football game in 2014, and evaluate the future of the franchise at a later date. It cited the ongoing litigation as a factor in its decision. Earlier this summer, the NCAA opted not to renew its licensing agreement with EA. “We hope this is the first step in paying college players what they’re supposed to [be paid],” says Egdorf. The college pay-for-play movement has essentially killed a popular video game for one year. And possibly for good. It’s come a long way.
The NCAA, the main defendant in the O’Bannon suit, has not settled, and on Thursday its chief legal counsel, Donald Remy, told USA Today that “we’re prepared to take this all the way to the Supreme Court if we have to. We are not prepared to compromise on the case.” If the current college players receive money in the settlement, their eligibility could be compromised: extra benefits are a no-no under NCAA rules. When asked whether or not current players could receive payments and remain eligible, an NCAA spokesman passed along a statement from Remy: “We learned of this notional settlement today. We have asked for, but have not yet received, the terms so we cannot comment further.”
The NCAA may now be facing some tough options. If it denies eligibility to current players receiving settlement funds in a legal case that moved fairly through the court system, the backlash will be huge. But if the NCAA allows these players to keep money from EA, how can it justify denying access to other third-party revenue streams, like corporate sponsorships and payments for an autograph?
“If the NCAA lets current players keep the settlement money, it appears that they would be acknowledging players have rights of publicity,” says Warren Zola, assistant dean at the Carroll School of Management at Boston College and an expert in sports law and business. “Maybe the NCAA would define any settlement money as an exception to their extra benefits rule, but I suspect college athletes whose rights of publicity have been squashed would challenge this artificial drawing of a line. The flood gates could open.”
Even if the settlement payments are small, this is a key moment in college sports, and marks yet another shift in the ongoing debate about the fairness of the NCAA’s amateurism model, which limits the pay-for-play compensation available to athletes to the value of a scholarship. “This isn’t just some fringe group shouting for change,” says Zola. “A group of athletes came up with a well-thought out legal argument that had a clear impact.” A settlement, at the very least, sends a formal signal that amateurism solely for players — in a billion-dollar professionalized college sport world where the NCAA and schools and EA Sports and countless other entities profit from players — is fishy. For pay-for-play champions, it’s a huge stamp of approval. “This is further evidence that change is coming to college sports,” says Zola.
For current and former college basketball and football players, only the white whale remains in the O’Bannon case — the NCAA, and the millions in licensing and broadcasting revenues that they’re seeking to access. “The spotlight is now entirely on the NCAA,” says Zola. “They’re the last defendant standing.” Fighting a movement, all alone.