O'Bannon plaintiffs try to make their case in NCAA post-trial brief
Before U.S. District Judge Claudia Wilken decides if the NCAA's rules restricting players from being paid are illegal, she will read the post-trial arguments by both sides.
The Ed O'Bannon trial may be over, but critical elements remain before a bench ruling that could allow college athletes to be paid: Post-trial briefs.
As scheduled by the court, the O'Bannon plaintiffs went first Wednesday with their post-trial conclusions in the antitrust lawsuit against the NCAA over the use of college football and men's basketball players' names, images and likenesses (NILs). The plaintiffs wrote that no matter who the buyer or seller is in the antitrust theory, there is a restraint of trade that outweighs the NCAA’s arguments for restricting players from being paid.
The roughly 25-page briefs are an attempt to answer questions raised by US District Judge Claudia Wilken and highlight areas that each side wants Wilken to consider. As Wilken said last week at the end of the three-week trial, she is not deciding whether the NCAA's policies are good or bad. She is determining whether the plaintiffs have proven antitrust violations occurred given the necessary requirements.
Last week, Wilken expressed difficulty distinguishing between a market and a product in the plaintiffs' claim. Before anything else, the plaintiffs have the burden to prove that one of their two claimed markets -- the college education market for recruiting athletes or the group licensing market -- has been harmed.
Wilken asked the plaintiffs' lawyers if they wanted to switch their theory from a monopoly (a market structure with a single seller) to a monopsony (a market with only one buyer). She also asked the plaintiffs for case precedent in the "complicated" buyer/seller arrangement in this antitrust case. The plaintiffs tried to do that in their brief, often by citing their economic expert, Roger Noll, and past case law.
"In this market, regardless of who is buyer or seller, the restraint prevents Players from receiving any compensation for use of their NILs as part of the transaction for obtaining their athletic services," the plaintiffs wrote. "Noll testified that how one views the higher education market is unimportant; under either characterization, the (players) are the ‘harmed party.' "
The plaintiffs' brief goes hard after NCAA economic expert Lauren Stiroh, who testified that monopsony cases differ from monopoly cases. NCAA lawyer Glenn Pomerantz said last week the NCAA would have tried the case differently under a monopsony case. The plaintiffs cited Supreme Court record from 2007 that states "the kinship between monopoly and monopsony suggests that similar legal standards should apply to claims of monopolization and to claims of monopsonization."
Stiroh testified that for an antitrust violation to occur, there must be an effect on the market that eventually impacts consumers. Wilken later said she thinks Stiroh's theories are "actually wrong."
The plaintiffs wrote that Stiroh's views are at odds with many cases involving "buyer-side price fixing." They cited a 1948 Supreme Court ruling from Mandeville Island Farms v. American Crystal Sugar.
The plaintiffs challenged Stiroh's testimony that if college athletes are meaningfully restricted under antitrust law from being paid, universities outside the NCAA -- especially those in the NAIA -- would attempt to "fill in the gap" by paying players. The plaintiffs said Stiroh's testimony is inconsistent with case law. They cited court record from 1983 in Association for Intercollegiate Athletics for Women v. NCAA that said "it is only from [the] NCAA that necessary services and benefits for conduct of a Division I men’s intercollegiate athletic program are available to institutions. … NAIA is not a realistic option."
The plaintiffs cited old testimony from former NCAA executive director Walter Byers that athletic scholarships are contracts for performance. The point they're trying to make: The education market is not a zero-price market, as the NCAA contends, because athletic scholarships don’t cover the cost of attendance for four years or additional years needed to graduate.
How much restraint needs to be shown for an antitrust violation? The NCAA now acknowledges it has a restraint. But Pomerantz, the NCAA's lead attorney, argued last week that for there to be an antitrust violation the restraint "needs to be unreasonable, not just a restraint."
In their post-trial brief, the plaintiffs reiterated that NCAA economic expert Daniel Rubinfeld described in his own textbook for more than 25 years that the NCAA is a cartel that reduces the bargaining power of athletes through eligibility and compensation rules. Rubinfeld testified last week he now views the NCAA as a "joint venture," a term he said may or may not involve antitrust violations.
The plaintiffs wrote that a district court in Board of Regents v. NCAA concluded in 1982 "the NCAA was not a joint venture for purposes of its television contracts, but was instead a cartel. … Indeed, the district court called the NCAA a 'classic cartel' with an 'almost absolute control over the supply of college football.' " The plaintiffs said the NCAA referred to itself as a cartel in its appellate brief to the Tenth Circuit in the Board of Regents case.
The big prize for the plaintiffs would be sharing billions of dollars of live television money with the NCAA and schools. The plaintiffs cited several examples in which they assert rights of publicity or NIL rights are explicitly referred to as part of the bundle of rights being licensed in TV contracts. Other contracts "implied conveyance of NIL rights, achieved through a combination of transfer, warranty, clearance and indemnification clauses," the plaintiffs wrote.
In his testimony, O'Bannon television expert Neal Pilson attempted to distinguish between broadcasts that convey players' NILs from players having NIL rights. The plaintiffs said that Pilson ignored contracts with specific language concerning NIL rights, such as a Fox contract with the Big 12.
The plaintiffs pointed out a Big Ten broadcast agreement was presented at trial that referred to clearances of the "names and likeness rights of all participants." Big Ten commissioner Jim Delany called this common "boilerplate" language. The plaintiffs cited an email in which Texas women's athletic director Christine Plonsky questioned when players would sue over broadcast rights fees "since clearly we use their names and images in those telecasts."
Testimony from NCAA president Mark Emmert was produced several times in the plaintiffs' brief, such as his statement that the Electronic Arts contract for NCAA-branded video games was not renewed because the alleged use of players' NILs came too close to the line of what he considered permissible. The plaintiffs also included Emmert's statement that the NCAA ended its website having a portal that let consumers buy jerseys searchable by the names of players because he determined that to be impermissible. The plaintiffs used those Emmert statements to argue the NCAA’s rules harmed competition and decreased output and consumer choice.
Plaintiffs: NCAA is 'patronizing'
If Wilken concludes that one or both of the plaintiffs' markets has been harmed, the next question is whether any of the NCAA’s pro-competitive defenses outweigh the anti-competitive effects. In other words, is there enough good to justify the bad?
The plaintiffs said the NCAA's defenses failed due to its own witnesses. For example, the plaintiffs cited Rubinfeld saying payments of $5,000 would not affect amateurism or competitive balance. They also used testimony from Pilson when he described his comfort level of individual payments to players as some range between $5,000 (comfortable) and $1 million (uncomfortable).
The plaintiffs cited the history of amateurism within the NCAA and argued the association has acted inconsistently with the term. Many internal emails and NCAA documents were again highlighted, as was some testimony.
Regarding the NCAA's defense through competitive balance, the plaintiffs said the NCAA provided no evidence that lifting the restraint would affect the chance to win or impact consumer demand.
The plaintiffs said that the NCAA's own witnesses provided help that the integration of academics and athletics is not a pro-competitive defense. They used testimony from Delany and Conference USA commissioner Britton Banowsky in which they said athletes have too much time demands in sports and, in Banowsky's words, need to have more time to "do regular student things."
The plaintiffs said testimony by Emmert and NCAA vice president Mark Lewis that schools may leave Division I if players are paid was undercut by other college sports officials. For instance, the plaintiffs' brief cited South Carolina president Harris Pastides saying his board of directors would replace him if the school dropped out of Division I, and Plonsky saying that even if Texas didn't want to pay players, it might face pressures from other colleges to do so.
The plaintiffs criticized the NCAA's argument against sharing commercial money as "patronizing." They contend that many players already come from low-income families and have difficulties integrating into academics and campus life.
NCAA expert James Heckman's testimony that college education is valuable to athletes was "irrelevant," the plaintiffs wrote. They argued Heckman established no causal inference between the NCAA restraint and positive social outcomes, and that even if Wilken rules in the plaintiffs' favor, college football and basketball players will still be students receiving the benefits outlined by Heckman.
"The NCAA neglected to acknowledge any current 'classification' issues between low-income and other students," the plaintiffs wrote, "and argued instead that providing NIL monies to athletes would create classification issues, as if to say, in effect, that the poor must remain poor in order to protect our campus life."
The NCAA gets its chance to respond with written conclusions that will be filed July 8. Both sides expect Wilken to provide a ruling by early August. Then comes the likely appeals process for one or both sides, a factor often taken into consideration when lawyers write post-trial briefs and judges issue their rulings.
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