Monday, July 15, 2013

B.A.F.F.L.E.D. Sports Law

Are College Athletes Being Exploited?

This question is not new at all, but with pending litigation, the spark has been reignited.  

The Latest
Former NBA players Ed O'Bannon, Oscar Robertson,and  Bill Russell are all parties to an antitrust suit against the NCAA regarding revenue from TV broadcasts, and merchandise licensing fees on video games and clothing. To explain a little, antitrust is the regulation and limitation of business organizations like monopolies or cartels, to ensure competition is promoted in an industry.  Many lawsuits have come up in the professional sports industry to keep the leagues from having a monopoly on talent, marketing, licensing, among other things making them so profitable.  2 years after filing, a California judge set a July 2014 trial date. 

A New Idea
The players claim they, and those following them should be compensated for use of their images in all media--but in a way limitedly discussed before.  Rather than directly paying student-athletes, who are technically amateurs, money will be put into a trust fund for payouts once they leave school.  This idea may also allow for teachable moments in money management--something players tend to struggle with upon going pro--or not.  This could also make way for athletes who may not be able to go pro as soon or at all to remain in college and get degrees which will be helpful to them afterwards--another common issue in the industry.  The NCAA makes millions of dollars in marketing, licensing, and other lucrative deals, all done because of the athletes attending their institutions.  Granted, they are attending these schools with the chance to make the most of their careers, in sports or otherwise.  Shouldn't the players, who typically are not allowed to work during the school year, be able to get a piece of the pie in some way?  In 2012 college merchandise revenue about 5 billion.  

NCAA says players waive marketing rights when entering college; they are not professional, and are fully aware of the business of college athletics.  This is more true these days because of the wide array of media outlets, but at a time, most notably when the Fab 5 at the University of Michigan were popular, this was not the case.  You might remember from their ESPN special, they all of a sudden realized they were struggling students, yet their style was making everyone else millions.  

Moving Forward
This case will be paramount in the way sports marketing and the business of sports moves forward in general.  The court could create a whole new way to define what determines "amateur" and could provide guidance for the use of likenesses when they belong to students.  

This case is also the perfect set-up for discussing entry age into professional sports.  Surely some of you recall the Maurice Clarett case.  We'll be diving into entry age soon.  

Tell us what you think and stay tuned!

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