A federal appeals court’s ruling on Wednesday will fuel and potentially complicate a national debate about whether college athletes are entitled to a bigger slice of the dizzying revenues that they help to generate for top-tier athletics programs.
A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit rejected a district court’s ruling that said members of the National Collegiate Athletic Association should be permitted to pay players $5,000 a year for the use of their names and likenesses. The panel contended that the figure was arbitrary and that even small payments to athletes threatened the NCAA’s amateurism model.
But the court affirmed that the NCAA had violated antitrust rules by restricting players’ ability to trade on their images and likenesses, including jersey sales and video games.
The case was brought by Edward C. O’Bannon Jr., a former basketball standout at the University of California at Los Angeles.
The decision gave both plaintiffs and defendants some cause for optimism. Mr. O’Bannon and his lawyers celebrated the court’s assertion that "the NCAA is not above the antitrust laws" and that the association had been overly restrictive of payments to players in the name of preserving its tradition of amateurism.
Mark A. Emmert, the NCAA’s president, said the association agreed with the court’s finding that it was "erroneous" to suggest, as the district court had, that athletes be paid $5,000 on top of the full cost of attendance. The expanded payments go beyond tuition, room, board, and textbooks to cover additional expenses, such as gasoline, groceries, and travel home.
The appeals court’s ruling, which agreed that the NCAA must allow its members to cover the full cost of attendance for athletes, has little practical effect at this point because recent rule changes already allow for that.
The court’s decision, however, could affect other legal challenges to the NCAA, whose wealthiest members have been criticized for paying coaches millions of dollars while some athletes struggle to get by. Among the most closely watched cases is one brought by Martin Jenkins, a former Clemson University football player who seeks a "free market" for college athletes to be paid. A hearing to decide whether the lawsuit may proceed as a class action is scheduled for Thursday.
Mr. Emmert on Wednesday gave no indication of whether the NCAA might appeal the decision, but he bristled at challenges to the group’s autonomy.
"Since August 1," Mr. Emmert said, "the NCAA has allowed member schools to provide up to full cost of attendance; however, we disagree that it should be mandated by the courts."
‘Real Money at Issue’
The NCAA has argued that its amateur model is part of its market appeal, suggesting that college-sports fans are drawn to competition among students who are not paid professionals. The court affirmed that amateurism does have value, but it rejected arguments that small payments beyond educational expenses, specifically $5,000 a year, would not threaten the amateur status of athletes.
"Having found that amateurism is integral to the NCAA’s market," the judges ruled, "the district court cannot plausibly conclude that being a poorly paid professional collegiate athlete is ‘virtually as effective’ for that market as being" an amateur.
Michael A. Carrier, a professor of law at Rutgers University at Camden, said that aspect of the ruling has far-reaching implications for future legal battles.
"If this court is rejecting an amount of even as small as $5,000, then it’s tough to see how players will do better going forward," Mr. Carrier said.
Others saw it differently. Exavier B. Pope, a sports-law analyst, said the ruling was a "Pandora’s box" because it affirmed that the NCAA had violated antitrust laws with its restrictions on player compensation.
"This opens the door ultimately for athletes to get paid," Mr. Pope said.
Indeed, the court did poke holes in some core NCAA arguments. The panel found wanting, for example, the association’s claim that its regulations limiting compensation for athletes amounted to "eligibility" rules, rather than restrictions on commercial activity that should be subject to scrutiny under antitrust laws. That argument, the court found, is "but sleight of hand."
"There is real money at issue here," the decision says.
Wednesday’s ruling adds fodder to an increasingly heated discussion about the welfare of college athletes, who are often perceived as an exploited class in what has become a big-money enterprise.
Gene A. Marsh, who served for nine years on the NCAA’s Division I Committee on Infractions, said he had seen a marked shift in public opinion about compensation for players. There may be disagreements about how much athletes deserve, he said, but there is eroding tolerance for the disparities that exist between wealthy coaches and the economically disadvantaged students who often play for them.
"Now very well educated, thoughtful people, who are not necessarily crazy fans, think that a lot — not all, but a lot — of the NCAA model is nuts and indefensible," said Mr. Marsh, an emeritus professor of sports law at the University of Alabama at Tuscaloosa.
In an interview on Wednesday, Mr. O’Bannon described the ruling as just one step in a long march toward fairer treatment of players.
"It’s a good day for the college athlete," he said. "I think it’s a victory in that we can move forward and take a step forward, but by no means are we done."