NCAA O’Bannon appeal cites ’84 SCOTUS ruling

Opening arguments by the NCAA in its appeal of the Ed O’Bannon antitrust ruling argue heavily that a federal judge erred by not applying a 1984 Supreme Court ruling that the NCAA believes protects amateurism in college sports.

In a 72-page filing early Saturday morning with the 9th US Circuit Court of Appeals, the NCAA focuses on what it believes are three flaws by US District Judge Claudia Wilken:

• Wilken declined to follow the 1984 Oklahoma v. Board of Regents case that ended the NCAA’s monopoly on television broadcast. That Supreme Court ruling included language that “athletes must not be paid” and the NCAA argued other district courts have upheld Board of Regents.

• Antitrust laws don’t apply to the challenged rules “because they do not regulate ‘commercial’ activity,” the NCAA wrote. “Whatever economic consequences these rules may have, their purpose is to define who is eligible to play the sports that college sponsor.”

• The O’Bannon plaintiffs lack antitrust injury. The NCAA argues the players are seeking payments for use of their names, images and likenesses in live TV, archived footage and video games yet “no state recognizes such a right in telecast of games and other claimed non-commercial uses, and the First Amendment and the Copyright Act would bar enforcement of any such right regardless.”

For the first time, the NCAA placed a number on what Wilken’s injunction would cost schools. The NCAA wrote in the appeal that the decision would amount to “about $30,000 per student-athlete over four years” to football and men’s basketball players.

“In fact, the court’s decision vitiates amateurism,” the NCAA wrote. “Those who are paid to play are not amateurs, whether they are paid $30,000 or $300,000.”

In a landmark ruling Aug. 8, Wilken determined that the NCAA’s rules “unreasonably restrain trade in the market for certain educational and athletic opportunities offered by Division I schools.” Wilken’s injunction in part allows schools to provide deferred compensation to football and men’s basketball players, although the NCAA is permitted to cap the amount at no less than $5,000 per year in 2014 dollars.

The NCAA’s appeal spends significant time challenging Wilken’s interpretation of the Board of Regents ruling by the Supreme Court in 1984. During the O’Bannon case, Wilken concluded the Supreme Court’s ruling does not apply in this case.

Although Board of Regents “gives the NCAA ‘ample latitude’ to adopt rules preserving ‘the revered tradition of amateurism in college sports’ … it does not stand for the sweeping proposition that student-athletes must be barred, both during their college years and forever thereafter, from receiving any monetary compensation for the commercial use of their names, images and likenesses,” Wilken wrote in October 2013.

The NCAA argued in its appeal that the Supreme Court’s analysis of eligibility rules was central “to the analytical framework the Court adopted — and to its application of that framework to the television plan at issue.” The NCAA said the rule-of-reason analysis used to determine antitrust violations was misapplied in the O’Bannon case.

The NCAA said Board of Regents was recently affirmed by the Supreme Court ruling in the American Needle case. That ruling said in part, “[w]hen restraints on competition are essential if the product is to be available at all … the restraint must be judged according to the flexible Rule of Reason” and “is likely to survive — And depending upon the concerted activity in question, the Rule of Reason may not require a detailed analysis; it can sometimes be applied in the twinkling of an eye.”

Wilken dismissed the impact of Board of Regents in part because “the college sports industry has changed substantially in the thirty years since (the case) was decided.” The NCAA argued in its appeal that Wilken did not explain what precisely has changed and that “even if college sports has changed so dramatically,” Wilken would still be bound by the 1984 Supreme Court ruling.

“In any event, the district court yearned for what never was: commercialism and amateurism coexisted at the time of the Board of Regents just as they do today,” the NCAA wrote. “Although the revenue generated by FBS football and Division I men’s basketball has grown over the years, college sports was highly commercialized when Board of Regents was decided — a fact that could not have been lost on the Supreme Court, given that the agreements at issue there called for broadcasters to pay hundreds of millions of dollars to broadcast a limited number of college football games in light of college football’s ability to “generate an audience uniquely attractive to advertisers.”

The NCAA’s appeal will be before a three-judge panel that has yet to be identified. The NCAA continues to eye a larger end game. The association wrote in the appeal that it’s preserving one aspect of its argument for a full-panel review by the 9th Circuit or the Supreme Court.

The O’Bannon plaintiffs’ response to the NCAA appeal is due Jan. 21, and the NCAA can file a reply by Feb. 11. The NCAA has asked for oral arguments to be set in April or May. The 9th Circuit hasn’t set a date but agreed to handle the appeal in an expedited manner.

“As many courts have upheld, the NCAA and its members should be allowed to govern college athletics, and protecting that experience remains important to the nearly a half a million young men and women who compete at NCAA schools each year,” NCAA chief legal officer Donald Remy said in a statement. “Attempts by the plaintiffs and the district court to untether college athletics from the academic experience cut to the core of the student-athlete experience. We look forward to defending the college model on appeal, and in the meantime will continue to improve the student-athlete experience on the field and in the classroom.”

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