It is clear that Judge Wilken has had no trouble making decisions or ruling against the NCAA. She presided over both O’Bannon v. NCAA and Alston v. NCAA, both cases resulting in losses for the NCAA. Friday’s decision is a major victory for Grant House and the other plaintiffs in the case. Any time that a party can stack decisions in their favor throughout the litigation process, the more likely that they can expect a final decision to go their way.
With the Court granting the three damage classes, denying the NCAA’s motion to exclude two of the plaintiff’s expert witnesses (University of San Francisco sports management professor, Daniel Rasher, and media consultant Ed Desser) and granting the plaintiff’s motion to exclude NCAA’s expert witness, Barbara Osborne’s opinion from the class certification proceedings, the plaintiffs must be feeling good about their chances moving forward.
It’s important to understand that the three classes moving forward are not all seeking the same damages. The plaintiffs submitted testimony from two experts who argued that football and basketball players provide at least 10 percent of the value in television broadcast rights contracts (broadcast NIL). Without the NCAA’s rules, plaintiffs argue, the Power Five conferences would have competed with each other for FBS football and Division I basketball student-athletes by offering them payments for their NIL in broadcasts, creating a free market.
The football and men’s basketball class is seeking broadcast NIL compensation, video game compensation as well as third-party NIL compensation. The women’s basketball class is seeking broadcast NIL compensation as well as third-party NIL compensation. The additional sports class is seeking third-party NIL compensation and some members of the class, athletes who played FBS football or D-I men’s basketball in a Group of Five school and received a full grant-in-aid scholarship allege to have suffered video game injury and damages.
For plaintiffs in the additional sports class, third-party NIL compensation could include potential brand deals and sponsorship opportunities that were prohibited before the NCAA’s interim NIL policy. For example, Grant House is not seeking a portion of broadcast NIL compensation that is generated by college football and basketball.
It will be interesting to see if the NCAA makes a larger effort to settle this case, and save face, after Friday’s decisions. A loss in the House case could result in the NCAA having to pay over $4 billion in damages to the plaintiffs, an amount that could cripple the governing body of college sports.
At the same time, there may not be a desire to accept a settlement offer from the NCAA. The plaintiffs have a lot of momentum right now. NIL is an extremely hot topic. Generally, public opinion favors the stance of the plaintiffs in that the athletes should be entitled to the revenue that they largely help generate. According to a joint survey conducted in August by Sportico and The Harris Poll, two-thirds of U.S. adults believe college athletes should be able to receive direct compensation from their school. Courts have not been persuaded by the NCAA’s crutch argument of amateurism in either O’Bannon and Alston.
While the NCAA does not appear to be ready to accept the new age of college sports, a loss in House could render them completely irrelevant. If the NCAA loses, the damages would exceed $4 billion. According to the NCAA’s consolidated financial reports for 2022 and 2021, the NCAA had net assets of $457 million at the end of 2022. Where would the rest of the money come from? Would the NCAA’s member schools have to pay the rest? Do they want to?
One possible solution that the leaders in college sports should consider is deeming college athletes employees of their respective schools. By doing so, schools could directly negotiate with the athletes on an athlete compensation model that would be reasonable for both entities. While there are drawbacks and potential consequences for such a model, it is one way that colleges and universities could avoid the constant litigation due to the current model.