NCAA plays defense against business litigation

Balanced against record earnings of $1 billion, the National Collegiate Athletic Association is facing a multitude of legal actions that could change the way it has conducted college sports for decades, and change the definition of amateur athletics. Plaintiffs are seeking union representation and a larger financial portion of the NCAA’s profits. The NCAA spent $9 million on legal expenses in 2011-12 and these legal challenges may cause even further increases in these costs.

A trial is scheduled to commence on June 9 in a lawsuit filed by former UCLA basketball player Ed O’Bannon. He is seeking college athletes’ control over the use of their name, image and likeness instead of the NCAA. The ultimate result could impact production, advertising sales, DVDs, videogames and rebroadcasts of games.

On March 26, Northwestern University football players won an early round of a legal challenge seeking union representation. Better insurance and guaranteed multiyear scholarships instead of annual renewals are mentioned among the relief being sought in the suit. Lifetime scholarships so that players can finish their degrees and receive advanced degrees are other possible goals.

Amateur athletics without pay has not been absolute. Currently, athletes can obtain funding to buy clothing, travel home for a funeral, or buy a computer. Players also receive gifts from football bowl games, and basketball tournaments.

In April, former West Virginia football player Shawne Alston charged that the NCAA and major athletic conferences illegally capped the value of scholarships lower than the actual price of attending college. Another lawsuit filed by antitrust lawyer Jeffrey Kessler seeks to remove all restrictions on player compensation.

As these cases demonstrate, commercial and employment disputes are not limited to boardrooms and can spawn from athletic fields and all commercial activity. Celebrities and athletes, in addition to corporate officers, can end up in business litigation.

Source: Journal and Courier, “NCAA approaching $1 billion per year amid challenges by players,” Mark Alesia, March 28, 2014

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