Should Student-Athletes Get Paid?
The National Collegiate Athletic Association (NCAA) is a non-profit organization that encompasses nearly 1,200 institutions in the United States and Canada. In regards to population, that rounds up to be about half a million student-athletes under the watchful eyes of NCAA representatives. The main reason for NCAA’s existence is to regulate what student-athletes and those working in collegiate athletics can and cannot do in terms of academics, well-being, governance, and, most relevant for this paper, fairness.[1]
Since college athletics have become increasingly popular among athletes and non-athletes alike, there has been issues in various forms of media, specifically in the form of video games. In 2009, former University of California, Los Angeles (UCLA) basketball player Ed O’Bannon, Jr. sued the NCAA and the Collegiate Licensing Company (CLC) because of such issues. He argued against the NCAA’s ability to use his name and likeness without receiving his permission and without receiving any compensation for it, specifically in the Electronic Arts (EA) Sports’ NCAA basketball video game.[2]
When professional athletes appear in video games like this, they receive at least some portion of the media income from the respective gaming company whether it be through a direct contract with the company or from their professional team. NCAA athletes, especially in sports that produce profit like FBS football and Division I basketball, should be treated no different than professionals in regards to their right of publicity.
This paper will discuss some relevant cases preceding O’Bannon v. NCAA, the case itself, the NCAA’s related regulations, and why student-athletes participating in profit-producing sports should be able to reap the financial benefits of their athletic success.
Preceding Cases
O’Bannon v. NCAA followed similar cases filed by Ryan Hart, a former quarterback at Rutgers University, and by Sam Keller, a former quarterback at Arizona State University and University of Nebraska. Each preceding case involved a class action lawsuit against the gaming company, Electronic Arts, Inc., that was virtually reproducing NCAA teams and the use of student-athlete likenesses in its video games. The main difference in the O’Bannon case is that O’Bannon was standing to represent both former and current student-athletes and argued mainly for antitrust violations against the NCAA itself, while the others were claiming personality right violations by Electronic Arts, Inc.[3]
In the Hart v. Electronic Arts, Inc. case in 2009, Hart argued against violation of his right of publicity. According to the California Celebrities Rights Act, and specific to this case, anyone who uses another’s likeness in any manner in products or services without consent is liable for any of the damages caused—which can include the profit that was received on the celebrity’s behalf.[4] According to the case, although the case was held in New Jersey, the court saw no issue in applying California’s reasoning as it wholly related to the issue at hand.[5] To prove the point even further, the court sought reasoning from the copyright-based Transformative Use Test to see if the Hart look-alike proved to be transformative enough to classify as non-infringing.[6] Since the game avatar had such similar features including hair color, skin tone, and even the number on his back, the court concluded that the resemblance was extensively apparent. Electronic Arts, Inc. did violate Hart’s right of publicity and did not transform his likeness enough for it to be considered an acceptable derivative work.[7]
Similarly, in the Keller v. Electronic Arts, Inc. case in 2009, the court ruled that Electronic Arts, Inc. had no right to virtually reproduce an athlete in the very setting that they gained fame without first getting permission. Simply omitting the name on the jersey and altering the players’ hometown is not enough to prove substantial transformation.[8]
Following his success against EA, Keller, around the same time as O’Bannon, filed suit against the NCAA and the CLC for “turning a blind eye to EA’s misappropriation of these NILs” by the sale of jerseys, photos, and video games.[9] The two cases by Keller and O’Bannon were shortly after combined by U.S. District Court Judge Claudia Wilken.[10]
O’Bannon v. NCAA
The preceding rulings in Hart v. Electronic Arts, Inc. and Keller v. Electronic Arts, Inc. should allow for what O’Bannon proposed in 2009—to receive compensation for such commercial use of player likeness. As stated previously, O’Bannon’s main “complaint was that the NCAA’s amateurism rules, insofar as they prevented student-athletes from being compensated for the use of their NILs, were an illegal restraint of trade under Section 1 of the Sherman Act.”[11]
Specifically, the Sherman Act states, “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce … is declared to be illegal.”[12] By withholding the ability of NCAA-affiliated schools to compensate student-athletes based on their name and likeness being used, the NCAA surely seemed to be violating the Sherman Act.
As the investigation proceeded, the court found two markets that were affected by NCAA rules and related directly to the Sherman Act—the group licensing market and the college education market. The group licensing market is affected since, if it were not for the NCAA’s rules, profit-producing FBS football and Division I basketball student-athletes would be able to make money off of telecasts, advertisements, and video games. The college education market is affected as schools often compete amongst each other to offer student-athletes the best amenities since they cannot offer any additional compensation outside of the cost of scholarships. These two markets directly show how the NCAA is causing a restraint of trade, with the main issue being price-fixing despite the amount of success and publicity that an athlete may bring to their respective school.[13]
The NCAA justifies these actions through its attempt to preserve amateurism in college sports, by integrating academics with athletics, and by the fact that each player was being shown as a member of a team, not individually. Amateurism, according to the most recent edition of the NCAA Division I Manual, means that participation in sport is motivated primarily by education and the physical, mental, and social benefits derived from playing the sport. It also states that “student athletes should be protected from exploitation by professional and commercial enterprises.”[14] The NCAA’s principle of amateurism almost directly states how their deal with Electronic Arts, Inc. was inappropriate, how it is exploiting student-athletes and withholding them from receiving any compensation for their success.
Despite this fact, the Supreme Court held that amateurism is a valid reasoning for the NCAA’s actions, there is no regulation of commercial activity by the NCAA, and O’Bannon did not suffer from any anti-trust injury.[15] The court came to this conclusion not by the Sherman Act, but instead by the Rule of Reason, which limits the restraint of trade on an ad hoc basis instead of fully prohibiting it like the Sherman Act.[16] The ultimate holding of O’Bannon v. NCAA consists of the current NCAA rule which allows schools to only compensate student-athletes up to the full cost of attendance, nothing more.
NCAA Related Regulations
In terms of a student-athlete’s name or likeness, a student-athlete must read and sign the NCAA-approved policy written by the school in which they are attending prior to such use. This policy applies to both the institutional and other commercial entities that may wish to use the name or likeness of an individual. Any nonprofit organization or institution may use the name or likeness of a student-athlete if selling informational items like media guides and schedules, other commercial, promotional items like jerseys and bobble-heads are not permitted to be sold.[17]
Amateurism, according to the NCAA, is the integral part of being a student-athlete. Amateurs are enrolled in school and receiving an education without a paycheck, while a professional is someone who does receive payment and must be classified as “professional.” However, in the NCAA Division I Manual, all of the following are listed under the criteria of a “professional athletics team:”
“a) Meals;
b) Lodging;
c) Apparel, equipment and supplies;
d) Coaching and instruction;
e) Health/medical insurance;
f) Transportation (expenses to and from practice and competition, cost of transportation from
home to training/practice site at the beginning of the season/preparation for an event and from training/practice/event site);
g) Medical treatment and physical therapy;
h) Facility usage;
i) Entry fees; and
j) Other reasonable expenses.”
This criterion aligns exactly with expenses paid for by collegiate athletic programs for amateur student-athletes, with various exceptions that may be made for health/medical insurance and medical treatment depending on the school. The NCAA simply labels this criterion as “actual and necessary expenses” for student-athletes to try to negate the fact that a student-athlete and a professional are the same. Although amateur student-athletes and professional athletes align in many ways, the NCAA goes on to rule that athletes lose their amateur status and eligibility if they were to receive any pay, directly or indirectly, for playing their respective sport.
In terms of compensation and scholarship, a student-athlete may not receive more compensation than the value of the cost of attendance. Specifically, the NCAA says, “a student-athlete may receive athletically related financial aid administered by the institution without violating the principle of amateurism…however, such aid as defined by the Association shall not exceed the cost of attendance as published by each institution.”[18] With the cost depending on the given institution a student-athlete is attending, scholarships can vary widely with each school’s size and athletics budget.
Discussion
Overall, it seems that the use of student-athletes’ name and likeness is widely discouraged without some sort of contract in place. Through the Hart and Keller cases, it has been proven that it is illegal to copy and use someone’s name or likeness without permission or compensation, regardless of their amateur status. According to the NCAA, this is especially true when names and likenesses are being used for commercial reasons like on jerseys, bobble-heads, or any other type of profit-producing entity in which video games fall under. This fact proves that the NCAA deal with Electronic Arts, Inc.’ misused the student-athletes’ names and likenesses, and the question of further ignorance is at stake.
Per the O’Bannon case, the NCAA is seemingly withholding student-athletes’ ability to receive extra compensation through restraint of trade in the Sherman Act and the Rule of Reason, just so they can be considered “amateurs” and eligible to play in its association. However, in the NCAA Division I Manual, these amateurs have very similar attributes to those of professionals in that they do not have to pay out-of-pocket for team lodging, apparel, coaching, and transportation, to name a few.[19] The only thing that they lack to be considered professional is extra pay for performance and the classification as “professional.” Professionals sign contracts to receive a portion of the profit when their name or likeness is used, so student-athletes should too since it is proven they are doing very similar things. This, again, poses the question of NCAA’s ignorance in terms of athletic status.
Continuing this trend, since NCAA schools are not permitted to give more money than allotted through scholarships, they often end up using the money on their facilities or promotional materials to entice prospects, and that cycle continues as more revenue comes in. Sometimes, the money may even go back to the NCAA executives and kept for salary raises. With all of the extra revenue that student-athletes bring in to schools and their athletics programs, it is unreasonable to allow the school and the NCAA to use the money and withhold it from the ones who earned it.
Without sports and its scholarships, a lot of successful student-athletes would not be able to afford college. But, the NCAA has admitted, “scholarships fall $2,000 per year short of what athletes need to get by,” leaving many student-athletes below the poverty line even with a scholarship.[20] Due to the demanding schedule of most NCAA athletic programs, it is almost impossible to obtain a part-time job or earn any extra money—some student-athletes are forbidden from earning extra cash even if they wanted to. The NCAA manual specifically states, “Any other financial assistance, except that received from one upon whom the student-athlete is naturally or legally dependent, shall be prohibited unless specifically authorized by the Association.”[21] With that, many student-athletes are forced to rely on their families to get by and for some that may not be feasible.[22]
If the NCAA and its schools are racking in such a large amount of money, they should be able to care for their student-athletes and compensate those who have earned it enough so that they can live comfortably. Some student-athletes may end up earning more than others, but this is already normal within the college bubble as scholarship and financial aid already vary depending on each school’s size and budget. The complicated system that would need to be created to calculate such compensation should not be a valid excuse to withhold such income.
Conclusion
Since student-athletes seem to have every qualification to earn money and to be a professional, the NCAA should have no right to withhold those playing in profit-producing sports, like FBS football and Division I basketball, from receiving rightfully-earned pay. Student-athletes have a duty to their school’s athletics program and should be compensated for that duty especially if that compensation exceeds the amount of attendance. One of the NCAA’s main regulations has to do with fairness, so they should not be turning a blind eye to the unfairness that continues to go on every day within their association. The NCAA is monopolizing the college athletics industry by forbidding compensation and this is not fair for student-athletes, no matter what their financial background. No matter how difficult it may be to create such a system, the NCAA should take steps towards compensating student-athletes in profit-producing sports.
Endnotes
[1] What is the NCAA?, NCAA at http://www.ncaa.org/about/resources/media-center/ncaa-101/what-ncaa [Last accessed April 19, 2017]
[2] O’Bannon v. NCAA 7 F. Supp. 3d 955, 2014 U.S. Dist. [hereinafter O’Bannon v. NCAA]
[3] William D. Jr. Holthaus, Ed O'Bannon v. NCAA: Do Former NCAA Athletes Have a Case against the NCAA for Its Use of Their Likenesses, 55 St. Louis U. L.J. 369, 394 (2010) [hereinafter Athletes Have a Case]
[4] Cal. Civil Code §3344
[5] Hart v. Electronic Arts, Inc., 717 F.3d 141 (3d Cir. 2013) [hereinafter Hart v. EA]
[6] 17 U.S.C. §§ 101-107
[7] Hart v. EA
[8] Keller v. Electronic Arts, Inc., 724 F.3d 1268 (9 Cir. 2013)
[9] O’Bannon v. NCAA, p. 7
[10] Athletes Have a Case
[11] O’Bannon v. NCAA, p. 6
[12] Sherman Anti-Trust Act 15 U.S.C. § 1
[13] O’Bannon v. NCAA, p. 7-8
[14] NCAA Division I Manual (August 2016-2017) [hereinafter NCAA Manual]
[15] O’Bannon v. NCAA, p. 12
[16] Lee Loevinger, The Rule of Reason in Antitrust Law, 19 A.B.A. Antitrust Section 245, 251 (1961)
[17] NCAA Manual
[18] id
[19] id
[20] i (2002) Challenges facing amateur athletics : hearing before the Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce, House of Representatives, One Hundred Seventh Congress, second session, February 13, 2002.
[21] NCAA Manual
[22] i (2015) Big Labor on College Campuses: Examining the Consequences of Unionizing Student Athletes: Hearing before the Committee on Education and the Workforce, U.S. House of Representatives, One Hundred Thirteenth Congress, Second Session, May 8, 2014.