Entertainment

What's Really at Stake in the Legal Assault on NCAA Inc.


What's Really at Stake in the Legal Assault on NCAA Inc.

Photograph by G Fiume/Getty Images

As we now wait a month or two for U.S. District Judge Claudia Wilken to rule on a closely watched antitrust lawsuit against the National Collegiate Athletic Association, it’s an apt moment to rethink what’s going on with the $16 billion-a-year college sports industry.

NCAA Inc. is under legal assault. Its moneymaking participants—universities, sports conferences, television networks, corporate sponsors, merchandise manufacturers, and countless individuals ranging from highly-paid coaches to anonymous staff tutors charged with keeping athletes academically eligible—face a courtroom challenge from Division 1 football and basketball players. The challenge boils down to this: All of you make a living—in some cases, a very lucrative living—from the sports-and-entertainment extravaganzas that big-time college football and basketball have become. We, the athletes, without whom the show cannot go on, want a share of the proceeds, or at least better treatment.

The NCAA’s response, as expressed in the O’Bannon case pending before Judge Wilken in federal court in Oakland, Calif., has two main elements. First, college athletes do receive something of value in exchange for their services: the scholarships that cover tuition, room, and board, as well as the intangible experience of being Big Men on Campus. (This fight concerns male athletes in the two sports that generate those billions of dollars in revenue, football and basketball). Second, the NCAA contends that if college sports surrendered the ideal that student athletes are “amateurs,” the whole enterprise would collapse, if for no other reason than alumni and other fans don’t want to watch greedy professionals fight, fight, fight for alma mater.

In O’Bannon, named for lead plaintiff Ed O’Bannon, a former stand-out basketball player for UCLA, the immediate target is the NCAA’s ban on athlete compensation for the broadcast use of their names and likenesses. In other suits lined up like a series of planes waiting to take off at LaGuardia Airport, heavyweight attorneys seek to get their athlete clients even bigger shares of the money. Separately, a player-unionization drive of uncertain dimension has gotten aloft, prompting NCAA protests that athletes aren’t employees and that organized labor would poison amateur competition.

It’s tempting to view this as a widening all-out war in which one side—the players or the NCAA and its business partners—will win and the other will lose. It’s also tempting to get caught up in the fine points of antitrust and labor law.

Another, more illuminating perspective would emphasize that one way or another big changes are coming to the college sports business. In this sense, the legal hostilities aren’t so much a fight over justice and “amateurism,” whatever the latter concept means in the thoroughly commercialized world of Division 1 sports, as they are a cumbersome, expensive form of negotiation over the nature and extent of changes that are definitely coming.

What seems like massive legal warfare often is best understood as bruising negotiation: a process of poking, prodding, and kidney-punching that allows the combatants time to sort out the terms of a compromise. Consider, for purposes of a very rough analogy, the seemingly interminable patent fights over mobile phones and tablet devices under way among tech giants Apple, Samsung, Google, et al. Once the companies have spent hundreds of millions of dollars in dozens of cases around the world, they will eventually resolve their differences out of court by means of cross-license agreements while their lawyers shop for vacation homes.

Back in college sports, it’s obvious to anyone with eyes and a brain that if amateurism ever meant something—and perhaps back through the mist of history it did, and perhaps over on the soccer and lacrosse fields it still does—things have changed in football and basketball. Top coaches receive multimillion-dollar annual salaries; schools spend hundreds of millions on luxurious stadiums; television contracts are tallied in the billions. Meanwhile, troubling questions persist about whether scholarship athletes really receive the serious college education they’re promised. And now, at least with football, there’s the added issue of whether head injuries set players up for premature dementia and other chronic ailments.

Having moved slowly to grapple with these challenges, the NCAA invited trouble. Since this is America, that trouble took the form of litigation. Since the NCAA has deep pockets, it can afford to fight back, and it will. Whoever wins at trial, the appeals could go on for years.

While the attorneys spit and fume, however, those inevitable changes and the outlines of an out-of-court resolution are already taking shape. In recent weeks, two of the largest college athletic conferences, the Pacific-12 and the Big Ten, which taken together represent 26 universities, have issued public letters urging reform. The presidents of these schools are advocating that the NCAA require all participating universities to provide lifetime guarantees that athletes who don’t finish their degrees in four years can come back and do so later. The Pac-12 and Big Ten also recommend guaranteed four-year scholarships so that college players who falter on the field don’t lose the ability to attend class and graduate. Improved and extended medical coverage is another proposal.

All of these are fine ideas, and it’s a little dismaying that they’re not already in place. All could be implemented without opening the door to lavish player salaries. And all could become elements of a master settlement agreement that resolves the lawsuits against the NCAA. Maybe there would be other elements as well. Judge Wilken is considering the possibility of trust funds that could collect a share of revenue from use of player images and make payments over time after graduation. There’s room, in other words, to negotiate.

The timing of reform proposals bubbling up within the NCAA is not coincidental. The lawsuits exerted pressure that has concentrated the thinking at NCAA headquarters in Indianapolis and in university administration buildings around the country. Litigation isn’t the best or most efficient way to change major institutions. But it doesn’t preclude compromise.

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, which tells the story of the Chevron oil pollution case in Ecuador, will be published by Crown in September 2014.

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