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Court Settlement Threatens To Rock College Sports As We Know It

On Behalf of | Jul 24, 2014 | Firm News |

By: Bernard Pellegrino, Jr.
September 27, 2013
The Pellegrino Law Firm
New Haven, Connecticut

Yesterday’s reported settlement in a high profile lawsuit against the NCAA and various business affiliates could change the face of collegiate athletics. The lawsuit entitled Edward C. O’Bannon, Jr. v. National Collegiate Athletic Association et al., 4:09-cv-03329-CW was brought by former UCLA basketball player Ed O’Bannon, and other former NCAA athletes, against the NCAA and others claiming the right to compensation for the defendants use of the players’ likenesses in various marketing and other commercial enterprises.

Media reports from persons close to the case report that video game producer EA Sports and Collegiate Licensing Company will pay around $40 million to settle lawsuits brought by former players whose likenesses were used without compensation.

It has been reported that the number of players to benefit from the settlement in the case, which was certified as a class action is between 200,000 and 300,000, and includes both former and current NCAA athletes, including last year’s Heisman Trophy winner Johnny Manziel.

It was also announced that EA Sports would discontinue its popular NCAA video football game.

The settlement now leaves the NCAA as the lone defendant in the litigation. The college sports behemoth has stated that is has no intention to compromise its position in the case. With the stakes so high, it remains to be seen if the NCAA will continue along the path to a trial in the matter.

A settlement by the NCAA or an adverse judgment against it in the case would forever alter the face of college athletics. In the event that the Plaintiffs prevail on their claim that they are entitled to compensation for the use of their likeness by the NCAA, and their affiliate members-the colleges and universities across the country who field teams in intercollegiate athletics, would be entitled to royalties from the NCAA’s vast treasure trove. Such a result would have a significant impact on the amount of money those universities receive from television revenues, merchandise sales and other income streams derived from highly profitable football and basketball programs, many of which support the less profitable minor sports.

Players on the other hand, most of whom attend these schools on athletic scholarships, would receive additional compensation for participation. Fears of an adverse judgment have purportedly led to internal discussions among member institutions of adopting “play for pay” options with current and future student athletes.

The entire college sports world nervously awaits future developments arising out of this landmark case.