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O'Bannon v NCAA


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The O'Bannon trial is scheduled to start today. The judge has scheduled three weeks for the trial. Expect it to last less than the full three weeks. 

 

The case is an anti-trust case where the plaintiff's are claiming the NCAA is a cartel which unfairly restricts the marketplace for endorsements by college athletes. The NCAA is claiming that the amateurism rules are an essential part of maintaining fan interest in college sports and not an unfair restriction of the rights of players. If the NCAA prevails, college players would reasonably be entitled to retain agents to negotiate fees from the schools, broadcasters and the NCAA for use of their names and likenesses on merchandise, during live broadcasts and residuals from showing archival recordings and repeat broadcasts. 

 

This will be interesting. A number of former players are expected to testify as are a number of others, including NCAA President Mark Emmert. The main point of contention for the judge to sort out will probably be the testimony of economists who will try to convince the court college sports would have much less appeal to fans if the players were allowed to be come celebrity endorsers instead of "amateur" college athletes. The NCAA will claim the restrictions on players receiving endorsement income are an essential part of college sports, not an unfair cartel activity intended to unfairly enrich NCAA member institutions to the detriment of the athletes. 

 

My bet is that the NCAA loses. 

 

Here is Mike McCann's write up on the situation. 

http://sportsillustrated.cnn.com/college-football/news/20140605/ed-obannon-ncaa-trial-primer/

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The NCAA will claim the restrictions on players receiving endorsement income are an essential part of college sports, not an unfair cartel activity intended to unfairly enrich NCAA member institutions to the detriment of the athletes. 

 

 

Floodgates will open for the bagmen if "endorsement income" isn't restricted for college athletes.  Expect the $EC schools to take full advantage.  "You can make $20k annually signing autographs at Bama".

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My bet is that the NCAA loses in some form too. The hardest part about that is that if the NCAA does lose, college sports will look really different in 5 years. While I think it is the right thing to do by the athletes who put in the hard work and are the burden bearer for the cash, I'm 'iffy' on my favorite sports changing.

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My bet is that the NCAA loses in some form too. The hardest part about that is that if the NCAA does lose, college sports will look really different in 5 years. While I think it is the right thing to do by the athletes who put in the hard work and are the burden bearer for the cash, I'm 'iffy' on my favorite sports changing.

 

Aren't the fans/donors the ultimate "burden bearer" for  the cash?

 

This should be interesting to follow. I suspect whatever happens the loser appeals and this drags on for another 3-4 yrs.

 

 

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My bet is that the NCAA loses in some form too. The hardest part about that is that if the NCAA does lose, college sports will look really different in 5 years. While I think it is the right thing to do by the athletes who put in the hard work and are the burden bearer for the cash, I'm 'iffy' on my favorite sports changing.

 

There is nothing that can be done to stall the change that is happening to college sports. A lot of the change is being driven by economics. The change from analog broadcasting to digital meant the cost of broadcasting a television channel dropped precipitously and made niche broadcasting (like conference networks) affordable (if you don't believe me, look at the local PBS stations that now have two and three broadcast streams. No PBS station has enough money to triple its content output if it costs more than a few hundred thousand to add a another channel to their broadcasts). The advent of the DVR put a premium on live sports programming. In the past, the rights such as the ones being argued in the O'Bannon suit weren't sizable enough to fight over. That has changed and the fight is on. A number of interests want their slice of the pie. 

 

I still think the Aereo decision from the Supreme Court will have a much greater impact on college sports if the technology is allowed. If I can pick up WNBC and/or KNBC from my television anywhere in the country at essentially no cost, why do I need a regional NBC affiliate in my home city? Regional network affiliates essentially become unnecessary in an Aereo world. In their place will be NBC Sports 1.0, 2.0, 3.0, etc. NBC then encrypts those channels, Aereo rebroadcasts them and individuals pay NBC for a decoder under a subscription basis. Bundled programming goes out the window and business models such as SECN and LHN that are based on everyone in a cable provider's footprint paying a set fee get blown up. Once the broadcasters have their economic interests change and the NCAA member schools have their revenue models change, both sides have reasons to tear up existing contracts and build new models. I expect realignment to happen along economic considerations and not geographic considerations. Alabama can't sell national subscribers on a diet of beating Mississippi State and Georgia Southern. Texas will need to be playing major programs much more often. Little guys get left out and FCS schools that depended on getting $1.0 mil paydays for playing FBC schools will be in trouble. 

 

At the end of the day, the convergence of economics and technology is changing college sports and nothing anyone does can keep the change from happening. 

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Aren't the fans/donors the ultimate "burden bearer" for  the cash?

 

This should be interesting to follow. I suspect whatever happens the loser appeals and this drags on for another 3-4 yrs.

 

Federal appellate courts are usually pretty efficient. Even if it does get appealed, this is an anti-trust case. An appeal would have to be that the district court did not  properly apply the law. It will be an appeal that takes much less than a year to get settled. My guess is that even if it does get appealed, the appeal decision is rendered before the end of the college football bowl season. The only thing that could get protracted is the trial on damages owed the players for previous years. That trial would not stop a decision in favor of the players from being implemented and players immediately signing with agents and receiving cash. 

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 I'm 'iffy' on my favorite sports changing.

 

This is my first, second and third thought about the trial. I tend to favor the players' argument, but until I see a decent solution for how payment (above a scholarship) will be regulated, it makes me extremely nervous. I'd rather keep the playing field somewhat level and not pay players than have unfair advantages "given" to those that bend the rules.

 

 

Addiotionally, I think it's somewhat absurd that our legal system is so twisted that this case of "does the NCAA endanger it's mission by paying players" is being argued by using a player's likeness on TV. So much for doing what is right versus doing what is wrong. (Yes, I know I'm naive.)

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There is nothing that can be done to stall the change that is happening to college sports. A lot of the change is being driven by economics. The change from analog broadcasting to digital meant the cost of broadcasting a television channel dropped precipitously and made niche broadcasting (like conference networks) affordable (if you don't believe me, look at the local PBS stations that now have two and three broadcast streams. No PBS station has enough money to triple its content output if it costs more than a few hundred thousand to add a another channel to their broadcasts). The advent of the DVR put a premium on live sports programming. In the past, the rights such as the ones being argued in the O'Bannon suit weren't sizable enough to fight over. That has changed and the fight is on. A number of interests want their slice of the pie.

 

I still think the Aereo decision from the Supreme Court will have a much greater impact on college sports if the technology is allowed. If I can pick up WNBC and/or KNBC from my television anywhere in the country at essentially no cost, why do I need a regional NBC affiliate in my home city? Regional network affiliates essentially become unnecessary in an Aereo world. In their place will be NBC Sports 1.0, 2.0, 3.0, etc. NBC then encrypts those channels, Aereo rebroadcasts them and individuals pay NBC for a decoder under a subscription basis. Bundled programming goes out the window and business models such as SECN and LHN that are based on everyone in a cable provider's footprint paying a set fee get blown up. Once the broadcasters have their economic interests change and the NCAA member schools have their revenue models change, both sides have reasons to tear up existing contracts and build new models. I expect realignment to happen along economic considerations and not geographic considerations. Alabama can't sell national subscribers on a diet of beating Mississippi State and Georgia Southern. Texas will need to be playing major programs much more often. Little guys get left out and FCS schools that depended on getting $1.0 mil paydays for playing FBC schools will be in trouble.

 

At the end of the day, the convergence of economics and technology is changing college sports and nothing anyone does can keep the change from happening.

This is where the rubber meets the road. In a situation like this, it is good to have cold, hard cash on-hand. For those that have depended on the 'big boys' to support them, I hope that they have put some of that cash in the bank. If they haven't, shame on them. Everyone with any sense knew this was coming. For programs leveraged up to their hairline, they had better hope that their donors make good on those pledges. If not, it's going to get ugly. If they can only issue an IOU to former players, they can forget about 5 stars and it may be difficult to attract 2 stars.

 

Just imagine what the Ags would owe Johnny Football. Even one of the regents acknowledged the stadium renovation is "the house that Johnny built". That will turn into a serious payday, and according to the financials that Duke linked, the Ags were subsidized by over $5,000,000 for the most recent reporting period.

 

In fact, looking at the financials revealed that very few of the Division I programs were NOT subsidized. I am proud to say that the Texas Longhorns were not subsidized and in recent years athletics contributed to the academic side of The University. That is something to be proud of.

 

I have one more point to make. If it is determined that Universities are going to start paying athletes in addition to their scholarships, the Universities who meet the criteria must become self-governing (no NCAA), with an oversight committee that has subpoena power for cases of suspected fraud. In other words, they need to have enforcement power, with teeth. You break the rules, you suffer the consequences.

 

Hook em!

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Aren't the fans/donors the ultimate "burden bearer" for  the cash?

 

This should be interesting to follow. I suspect whatever happens the loser appeals and this drags on for another 3-4 yrs.

 

Yes but they play to see the players between the chalk. The players are the entertainment and the fans pay for that.

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I think this case ends up being thrown out.... players should not be paid... they get a full ride to and a education to play football and represent the university. Now I know some will say will they deserve their cut for all the money they make the university well I say playing football is not a right it's a privilege . They knew coming into it that they were going to get a free education to play and a chance to develop there skills where some could go to the NFL someday. .. Now if I'm paying my donation to the LHF for entertainment. .. then crap the Longhorns owe me a damn refund for the last 4 years. So if they want to get paid... them fine go play pro or go play semi pro or something. ... but my donations are paying for an education. .. not a college football student salary.

Now I will say this I'm not opposed to a stipend that is reasonable. .. but as soon as student athletes start making more money than me .... then I'm out of the donations game and I bet I'm not the only donor that feels this way....

OK I'm done now....

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I think this case ends up being thrown out.... players should not be paid... they get a full ride to and a education to play football and represent the university. Now I know some will say will they deserve their cut for all the money they make the university well I say playing football is not a right it's a privilege . They knew coming into it that they were going to get a free education to play and a chance to develop there skills where some could go to the NFL someday. .. Now if I'm paying my donation to the LHF for entertainment. .. then crap the Longhorns owe me a damn refund for the last 4 years. So if they want to get paid... them fine go play pro or go play semi pro or something. ... but my donations are paying for an education. .. not a college football student salary.

Now I will say this I'm not opposed to a stipend that is reasonable. .. but as soon as student athletes start making more money than me .... then I'm out of the donations game and I bet I'm not the only donor that feels this way....

OK I'm done now....

 

The problem with paying athletes a stipend is you'll have to do it for all sports, including the non-revenue generating ones.  The last girl on the women's rowing team gets the same allowance as the starting QB?  How is that equitable?

 

Blame Title IX for this quandary.  For every VY and JFF, there's 1000 guys that don't mean diddly to their athletic departments and/or boosters.  Less than 2% of CFB players will ever see the field in the NFL, too.

 

These guys are supposed to be student-athletes.  Let's not lose sight of that.

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The problem with paying athletes a stipend is you'll have to do it for all sports, including the non-revenue generating ones. The last girl on the women's rowing team gets the same allowance as the starting QB? How is that equitable?

 

Blame Title IX for this quandary. For every VY and JFF, there's 1000 guys that don't mean diddly to their athletic departments and/or boosters. Less than 2% of CFB players will ever see the field in the NFL, too.

 

These guys are supposed to be student-athletes. Let's not lose sight of that.

JB that's what I was saying.... reasonable stipend ....like a little extra spending money... not a load of cash $50-100 week ... and unfortunately this will be the minimum that will happen....

But who knows...

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Dobbs, I'm in favor of a set stipend per athlete, as well. I'm not in favor of free market compensation, which would be impossible to monitor. When I think of stipends, I think of players like Earl. I believe he came to UT with one or two pairs of cut offs, a couple of tee shirts, and a pair of jeans. I am aware of other players in the recent past that were a little better off, but not much. Some didn't have winter coats or sheets and blankets until teammates chipped in to buy them. That's absurd.

 

I think a $1000 to $1500 per month stipend is reasonable. It even allows for the purchase of a computer, if needed.

 

Edit: 10 years ago The Terry Foundation was providing a $800/month stipend for scholarship recipients. In addition, they provided for a computer after enrollment and a replacement after 2 years. That was in addition to tuition, fees, books, and I believe room and board. I could be mistaken on parts of this, if anyone cares to look it up, please feel free to do so. It's a four year scholarship. Finish in less than four, apply the remaining time to grad, law, or med school.

 

That's where I'm getting my numbers.

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Dobbs, I'm in favor of a set stipend per athlete, as well. I'm not in favor of free market compensation, which would be impossible to monitor. When I think of stipends, I think of players like Earl. I believe he came to UT with one or two pairs of cut offs, a couple of tee shirts, and a pair of jeans. I am aware of other players in the recent past that were a little better off, but not much. Some didn't have winter coats or sheets and blankets until teammates chipped in to buy them. That's absurd.

 

I think a $1000 to $1500 per month stipend is reasonable. It even allows for the purchase of a computer, if needed.

I think about $500 a month is reasonable ..... but I get what your saying...

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The problem with paying athletes a stipend is you'll have to do it for all sports, including the non-revenue generating ones. The last girl on the women's rowing team gets the same allowance as the starting QB? How is that equitable?

 

Blame Title IX for this quandary. For every VY and JFF, there's 1000 guys that don't mean diddly to their athletic departments and/or boosters. Less than 2% of CFB players will ever see the field in the NFL, too.

 

These guys are supposed to be student-athletes. Let's not lose sight of that.

JB,

 

Title IX does complicate the issue and so are the lawsuits. If O'Bannon prevails and the judge goes with a stipend, rather than a totally unenforceable athlete commission of some sort, the article I linked suggested it would be several years before other sports become an issue.

 

Since the case is tied to revenue, football is the big revenue producer and basketball is next. That sounds like the reasoning, doesn't it? Women's rowing is a drain and simply an easy way to give out a large number of scholarships to women. File a lawsuit and get the program disbanded.

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