As an artist I understand both sides. My paintings I have of the Duke football team (http://www.wagnerwatercolor.com/gallery3.html), I consider mine in every way. I was given permission by the university to be on the field to take the images, and the images themselves were my own. I didn't use anyone else's photos to work from. I do have problems when I see paintings and prints of such iconic moments such as "the shot". In my mind, unless the photographer gave the artist permission to use his photo, it's stealing. That's why when you go to the N&O's and Herald-Sun's sites, you have the option to buy the photo; they have the rights to them, they took the pictures.
What I don't agree with is the claim that the artist violated anything by painting the uniforms. If this were the case, then 1000's of news sites across the country could be sued every day. (Photo's are just as artistic as paintings, same policy applies in my opinion). ESPN doesn't pay Duke to post a picture of the team hoisting the ACC trophy at the end of the tournament. They pay the photographer. It's his image, his rights. I'm glad Alabama lost this fight, but if his paintings are done from someone else's photos he would lose that fight if the individual sued him.
Edit...when I asked permission to take the photos with the intention of painting them, I offered to leave off identifying marks from the uniform. That point was never addressed when I was given permission to be on the sidelines, so I take it as it is allowed.