Playing Hardball: NCAA Lawsuits Question Image Rights

As the New Year opens, March Madness excitement builds; however, so does the drama surrounding the lawsuits filed by current and former NCAA athletes about the rights to use (and be compensated for the use of) their likenesses for profit.

The Lawsuits: Players vs. the NCAA & Electronic Arts (EA)

In the last few years, a number of athletes in a variety of college sports have filed lawsuits against the National College Athletic Association (NCAA) and Electronic Arts (EA), a video game company. Many of these lawsuits have been certified as class action suits, i.e., lawsuits brought by a few individual plaintiffs on behalf of a much larger class of affected individuals. One of these plaintiffs is Ed O’Bannon, a former UCLA basketball star, who initiated litigation after seeing his likeness used in a video game.[1]

The lawsuits involve, among other things, claims by student-athletes that the NCAA and EA violated their legal rights by participating in the licensing, use, and/or sale of athletes’ names, images, and likenesses in EA’s NCAA-branded videogames. The NCAA and EA have made substantial profits from selling recordings of games and memorabilia, advertising, and promotional products, as well as incorporating representations of popular players into EA’s video games. The suits claim that prohibiting NCAA athletes from sharing in the profits of those uses constitutes a violation of federal antitrust laws, as well as an improper use of the players’ likenesses.[2]

Who Gets to Use an Athlete’s Likeness?

The rules about using someone’s likeness (as a pictorial, photographic, or other graphic representation) can be complicated and vary greatly by location. California state law, which applies to the cases brought in California federal court and to other actions where California law applies, protects an individual’s “Right to Publicity” – or, more accurately, the right to prevent or control the publicity of one’s own likeness.

Under California statute, using another person’s “name, voice, signature, photograph, or likeness, in any manner on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of products, merchandise, goods or services, without such person’s prior consent” is prohibited.[3] Violators may be found liable for a statutory minimum and any actual damages to the person whose likeness is used. A successful plaintiff can also recover any additional profits from the unauthorized use that are attributable to the use and are not included in those calculations, as well as punitive damages, attorney’s fees and costs.

Oregon, however, does not recognize a right to publicity either by statute or at common law. The preeminent case law holds that the use of someone’s likeness for a public-interest purpose is permissible without permission, although the court in that case distinguished this kind of use from unauthorized use for commercial purposes or profit.[4]

NCAA Rules, Contracts and Waivers

Although the NCAA was originally established to address student football safety issues, it is now the largest organization in the United States related to the regulation of amateur athletes. When a student athlete agrees to play college athletics at one of the 1200-plus NCAA member schools, he or she customarily signs first a “Letter of Intent” and then a “student-athlete statement” each season. These documents form a contract that waives a number of rights. For example, each player agrees to regular drug testing for both recreational and performance-enhancing substances, conduct restrictions, academic requirements, and other eligibility issues. Central to the current cases, each athlete also agrees to remain an “amateur” and not receive compensation for his or her athletic performance. Thus, although the agreements include payment of the athlete’s tuition and fees, room and board, and cost of class materials, they bar an athlete from receiving any additional athletic-related compensation (including endorsements or payment for use of their likenesses).[5]

The litigation has highlighted the distinction expressed by the Oregon courts between the right to publicly broadcast socially relevant information and the rights of publicity, placing broadcasts of NCAA games in the same hallowed category as news media and emphasizing free speech rights. The NCAA AND EA claim that, because of free speech rights, the waivers aren’t necessary or applicable to the games themselves – that is, the players don’t have the right to prevent their images from being used in such a manner (where the public’s “right to know” trumps individual rights to privacy or to control their own publicity). Possibly as a result of this distinction, EA has settled out of some pending cases (including the O’Bannon case) for its use of likenesses in NCAA-based videogames.

But college sports broadcasts themselves generate billions of dollars in TV contracts and merchandise sales each year, including contracts for post-season football bowl championships. The media deal for March Madness alone (the NCAA Division I Men’s Basketball Tournament) is worth $771 million a year – exponentially more than the NCAA distributed to its student-athletes.[6] The athletes argue that prohibiting them from participating in or benefiting from any part of this revenue amounts to an unfair restriction on economic competition, in violation of U.S. law.

And although the NCAA has defended the waiver clauses, in July 2015 it began issuing Letters of Intent that did not contain the disputed provisions.

Verdicts Come in, but the Battles Rage On

On August 8, 2014, the California district court in the O’Bannon suit ruled that the NCAA’s restrictions on payments to athletes do, in fact, violate federal antitrust laws. The decision made clear that schools should be allowed to offer full cost-of-attendance scholarships to athletes, including cost-of-living expenses, which were previously excluded from NCAA scholarships. The court also ordered that colleges should be permitted to place as much as $5,000 into a trust for each athlete per year of eligibility, and awarded $46 million to the plaintiffs for attorneys’ fees and costs.

On appeal, the Ninth Circuit upheld much of the ruling, but reversed the trust provision. The Appellate Court affirmed the lower court’s position that the NCAA’s amateurism requirements violate the antitrust provisions of the Sherman Act, unlawfully preventing member schools and conferences from competing to compensate players. It also refused to accept the idea that the unique nature of amateur sports would be destroyed if players were compensated, instead holding them to the legal standard of any other commercial industry. However, it struck down the $5,000 trust provision as arbitrary and groundless. The plaintiffs’ request for a rehearing on the appeal was denied in December 2015.

Both the O’Bannon plaintiff class and the defendant NCAA have publically expressed a desire to petition the U.S. Supreme Court to hear an appeal of the Ninth Circuit’s ruling, a request that must be filed by March 14, 2016. Because previous case law from the Seventh Circuit held that the Sherman Act did not apply because of the unique nature of “amateur” sports,[7] the U.S. Supreme Court may be interested in resolving the circuit split and standardizing the law of the land. If it accepts the case, other pending class actions, as well as future classes of student-athletes, may see a very different playing field.

 

The content of this legal blog is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. This blog is not legal advice and no attorney-client relationship created between you and Bristow-Ford Law or Susan Bristow-Ford. You should not act upon this information without seeking advice from a lawyer licensed in your own state or jurisdiction. No information herein should be used as a substitute for competent legal advice from a licensed professional attorney in your state or jurisdiction and your use of this information is at your own risk. The information herein may not reflect the most current legal developments, verdicts or settlements and may be changed, improved, or updated without notice. Bristow-Ford Law or Susan Bristow-Ford is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances.

Written with the assistance of attorney Jamie Pfeiffer.



[1] O’Bannon v. NCAA, No. 14-16601, 2015 WL 5712106 (9th Cir. Sept. 30, 2015). Appealed from O’Bannon v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal. 2014).

[2] Sherman Antitrust Act, 26 Stat. 209, 15 U.S.C. §§ 1–7.

[4] Anderson v. Fisher Broadcasting Cos., 300 Or.. 452, 712 .2d 803 (1986).

[5]Summary of NCAA Regulations – NCAA Division I.” NCAA. NCAA.org, 2011. Web. 29 Dec 2015.

[6] Keilman, John and Hopkins, Jared. “College athletes routinely sign away rights to be paid for names, images.” Chicago Tribune. Tribune Company, Inc., 26 Mar 2015. Web. 29 Dec 2015.

[7] Agnew v. NCAA, 683 F.3d 328 (7th Cir. 2012).

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