O'Bannon vs. NCAA, Day 2: Economic expert spars with NCAA
What happened and what was was significant on the second day of the Ed O'Bannon trial over the use of college athletes' names, images and likenesses.
OAKLAND, Calif. -- Roger Noll, a professor of economics emeritus at Stanford, is a pro as an antitrust witness. When the defense attacks him, he shows no reluctance in dodging the punch and countering with feisty exchanges.
“You realize that the NCAA only makes rules with the agreement of the colleges?” NCAA attorney Rohit Singla said early on during his cross-examination of Noll at the Ed O’Bannon vs. NCAA trial on Tuesday.
“That’s called a cartel,” Noll responded.
At a rate of $800 per hour, Noll is one of the key witnesses for the O’Bannon plaintiffs in their antitrust case seeking to end the NCAA’s ban against athletes being paid for use of their names, images and likenesses. Noll has testified for about seven and a half hours over two days so far. He returns Wednesday for what’s expected to be at least two more hours.
Tuesday was all Noll on the stand. He is not the only economic expert for the O’Bannon plaintiffs, and the NCAA will later put up its own experts to counter Noll’s testimony.
But make no mistake: Noll has been at the heart of the O’Bannon case’s antitrust theories for several years. What Noll says -- and how U.S. District Judge Claudia Wilken interprets his theories in relation to the law -- figure to go a long way in deciding this case.
So naturally, the exchanges from Noll got testy and sarcastic quite often. Noll is the type of witness who has no problem telling the opposing attorney he’s engaging in a “long and relatively pointless discussion.” Nor does Noll mind stating that a supposed error by NCAA economic expert Daniel Rubinfeld over the difference between costs and benefits is the kind of mistake he expects from his college students.
When Singla tried to get Noll to say he has no empirical analysis of a market for college athlete endorsements, Noll replied, “I have never analyzed nonexistent transactions.”
There were more than just one-liners at court on Tuesday. Five things that happened in the O’Bannon trial on Day 2:
1. Do college athletes have individual names, images and likeness rights? This goes to a key issue for the O’Bannon plaintiffs. For college athletes to get a cut of TV money moving forward, the plaintiffs have to prove those rights exist in the first place and can be negotiated.
The NCAA contends that individual licensing rights that have allegedly been violated don’t exist. Attorneys for the O’Bannon plaintiffs have suggested in interviews that the recent video-game damage settlements -- although there’s no stated admission by the NCAA and it might not even be admissible in court if there was -- suggest otherwise.
Video games are one thing for licensing rights. Proving it for live broadcasts, where billions of dollars exist, is quite another challenge.
Singla repeatedly hit on the point that even professional sports leagues’ TV contracts don’t include licenses for players’ images. Noll countered that pro athlete TV rights are collectively bargained for by players and that the question was more a legal question than an antitrust economics question, which is his expertise.
Singla pressed Noll on whether he has ever found or cited any sport in the history of the world in which an athlete is paid for names, images or likenesses for appearing as part of a league. Noll provided the example of boxing.
The NCAA revisited its position that because schools control access to stadiums, they have the ability to control TV rights to games. Singla gave the example that if Stanford and Cal played a game at Golden Gate Park, TV could come and the schools wouldn’t get paid for it.
“What does controlled access mean?” Noll said. “Nobody can fly a hot air balloon over the stadium and take pictures? Please be specific.” Even Wilken became amused at this line of questioning, and eventually Singla moved on from stadium access.
2. Judge interested in Keller settlement terms. During discussions about athletes’ rights in video games, Wilken asked the NCAA if it would be willing to state settlement terms in the Sam Keller video game case. The two sides announced a $20 million settlement on Monday and still must formally file the proposed deal to the court.
“I’m getting the picture it’s something more than money and could be relevant to this (O’Bannon) case,” Wilken said. “I don’t want to intrude upon your plan. If it was related, that might be useful for me to know.”
Replied Singla: “Let us take that under advisement.”
Rob Carey, an attorney for the Keller plaintiffs, said in an interview afterward the settlement was strictly for a damages case and he’s not sure exactly what Wilken had in mind.
“I think part of the issue in the Keller settlement is there will be a release of claims that may or may not affect damage claims of the O’Bannon antitrust class,” Carey said. “I don’t know how that would affect anything in the (O’Bannon) trial. We want them to be able to put their case on.”
Carey said the intent is to file the proposed settlement before the Keller plaintiffs’ preliminary appproval hearing on July 3 for their settlement with Electronic Arts and Collegiate Licensing Company.
3. NCAA: Former athletes can profit off their image. The NCAA wants to show that its rules have never restricted former college athletes from marketing their rights. It’s a point Noll somewhat reluctantly agreed with on Tuesday.
Singla gave the example that if AT&T wanted to use the image of a famous basket by O’Bannon in an advertisement, there’s no NCAA rule stopping AT&T from paying him. Noll said that’s unclear since UCLA could violate NCAA rules if it promised O’Bannon the chance for such a payment.
Noll acknowledged seeing emails in which NCAA officials told advertisers they must go to former players to license material from them. He also said a player obtaining the rights to his video also depended on the rebroadcasts rights initially acquired by the broadcaster.
In an attempt to show that publicity is a significant appeal for athletes to participate in college sports, Singla used the example of football players appearing in game programs. (This being Noll, of course, Singla had to first get around Noll saying that he doesn’t get a program at Stanford games because “I don’t need it.”) Singla’s point: “Part of the joy” of playing college sports is the attention athletes receive.
Replied Noll: “Of course there are a lot of great things to being an athlete. There are also great things to being a professor. That doesn’t mean the market wage is zero.”
4. Noll: NCAA autonomy is another form of cartel
It doesn’t figure to factor into the verdict, but O’Bannon attorney Michael Hausfeld attempted to introduce documents related to the Power Five conferences’ attempt for NCAA autonomy to make their own rules to benefit athletes.
Noll was shown a report by Florida president Bernie Machen and Nebraska chancellor Harvey Perlman on potential NCAA restructuring, and a recent letter by Pac-12 presidents calling for change. Noll said autonomy is an example of a disagreement within the “cartel” of what’s the best set of restraints.
The NCAA objected, citing a rule that when measures are taken that would have made an earlier injury or harm less likely to occur, evidence of the subsequent measures is not admissible to prove. Wilken agreed and ended the autonomy questioning.
5. Who’s next on the stand? Once Noll’s testimony is done, the plaintiffs will call former Alabama football player Tyrone Prothro, a named plaintiff in the suit. The order of witnesses after Prothro: economic expert Daniel Rascher, former Vanderbilt football player Chase Garnham, TV consultants Edwin Desser and Neal Pilson, and professor Ellen Staurowsky to discuss the integration of academics and athletics.
EA executive Joel Linzner is scheduled to testify June 18. At this rate, NCAA President Mark Emmert may take the stand in the middle of next week. Hausfeld said he has asked for NCAA replacement witnesses in direct testimony since NCAA vice president David Berst and former NCAA vice president Wally Renfro won’t be called by the NCAA.
For now, the witness stand still belongs to Noll and his testy exchanges with Singla. The banter got so contentious on Tuesday that the court reporter twice blurted out, “You both can’t talk at once!”
They’ll keep talking Wednesday.
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