Meanwhile, down to the wire on O'Bannon v. NCAA

[swood1000]

If you think that there wouldn't be Title IX ramifications you live in a different world than I do.

It seems that male coaches get paid more than female, and this has not so far been declared sex discrimination.

[swood1000]

So here we are July 29, 2015, with the injunction allowing $5,000 per athlete payments into a trust fund set to go into effect August 1. The NCAA has requested that the Court of Appeals stay the injunction until it has issued its decision on the appeal. The other side has, of course, denied that a stay is warranted. In order to stay an injunction four factors are considered:

1. whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
2. whether the applicant will be irreparably injured absent a stay;
3. whether issuance of the stay will substantially injure the other parties interested in the proceeding; and
4. where the public interest lies.

If the Court of Appeals grants the stay, then, it will mean that the court believes that the NCAA is likely to win its appeal. It would be kind of like the situation last year when federal courts were ordering states to allow same-sex marriages and the Supreme Court refused to stay those orders, giving us a forecast of its eventual ruling that laws against same-sex marriage were unconstitutional.

So in the next few days the Court of Appeals will grant or deny the request for a stay of the injunction and we will discover the likely outcome of the appeal (although it could then be appealed to the Supreme Court).

[swood1000]

So here we are July 29, 2015, with the injunction allowing $5,000 per athlete payments into a trust fund set to go into effect August 1. The NCAA has requested that the Court of Appeals stay the injunction until it has issued its decision on the appeal. The other side has, of course, denied that a stay is warranted. In order to stay an injunction four factors are considered:

1. whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
2. whether the applicant will be irreparably injured absent a stay;
3. whether issuance of the stay will substantially injure the other parties interested in the proceeding; and
4. where the public interest lies.

If the Court of Appeals grants the stay, then, it will mean that the court believes that the NCAA is likely to win its appeal. It would be kind of like the situation last year when federal courts were ordering states to allow same-sex marriages and the Supreme Court refused to stay those orders, giving us a forecast of its eventual ruling that laws against same-sex marriage were unconstitutional.

So in the next few days the Court of Appeals will grant or deny the request for a stay of the injunction and we will discover the likely outcome of the appeal (although it could then be appealed to the Supreme Court).

The legal briefs are still flying. For those of you who are glad you didn't become lawyers I'll just provide one more detail in order to reassure you of the correctness of your decision. The NCAA claims that making a "strong showing" that it is likely to succeed on the merits can be accomplished even when it has less than a 50% chance of success, so its burden is lower than the other side might suggest, and that the Court of Appeals should grant the stay because it just maintains the status quo, which has been in place for decades. The other side argues that the NCAA has a 'heavy burden.' Maybe all we can say is that the refusal to grant a stay would indicate that the NCAA is likely to lose its appeal.

[swood1000]

There apparently are many who believe that most “amateur” athletes take money surreptitiously and avoid penalties. In a recent nationally syndicated cartoon, "The Small Society," one character is asked, "What is the difference between an amateur and professional athlete?" His reply was that "the pros get paid by check."

How many posters here believe that in Division I MBB today there is a significant amount of money, beyond the officially approved benefits, finding its way into the pockets of players or their families (including payments to be delivered after the athlete turns pro)? The argument is that it's happening anyway and we might as well be honest about it.

[-jk]

There apparently are many who believe that most “amateur” athletes take money surreptitiously and avoid penalties. In a recent nationally syndicated cartoon, "The Small Society," one character is asked, "What is the difference between an amateur and professional athlete?" His reply was that "the pros get paid by check."

How many posters here believe that in Division I MBB today there is a significant amount of money, beyond the officially approved benefits, finding its way into the pockets of players or their families (including payments to be delivered after the athlete turns pro)? The argument is that it's happening anyway and we might as well be honest about it.

I suspect it's still the exception in D1 and pretty much non-existent in the rest of the ncaa. There are some schools where it might not be, though.

-jk

[Lar77]

I suspect it's still the exception in D1 and pretty much non-existent in the rest of the ncaa. There are some schools where it might not be, though.

-jk

I agree.

Differing perceptions have a lot to do with it. $60k tuition is a lot of money for the right to go to class, but an 18 year old might not appreciate the difference between that and free public high school. But give that same kid $5,000 in cash - that can be big.

[swood1000]

I agree.

Differing perceptions have a lot to do with it. $60k tuition is a lot of money for the right to go to class, but an 18 year old might not appreciate the difference between that and free public high school. But give that same kid $5,000 in cash - that can be big.

The trial court in O'Bannon believed that by putting the $5,000 in trust and not making it available until the student-athlete is no longer a student, it no longer has the same feel as an in-hand $5,000 payment, and that this insulates the transaction from some of the issues that come with professionalism. But no doubt SAs will receive periodic financial reports showing interest earned, etc. I don't know how others feel, but when I look at financial statements showing the contents of my savings accounts it feels like real money to me, even if I can't get at it immediately. Also, if the student-athlete is certain to receive an amount in no more than X years there would be many people willing to pay him the discounted present value in exchange for transferring the right to receive the money in the future.

[bob blue devil]

The trial court in O'Bannon believed that by putting the $5,000 in trust and not making it available until the student-athlete is no longer a student, it no longer has the same feel as an in-hand $5,000 payment, and that this insulates the transaction from some of the issues that come with professionalism. But no doubt SAs will receive periodic financial reports showing interest earned, etc. I don't know how others feel, but when I look at financial statements showing the contents of my savings accounts it feels like real money to me, even if I can't get at it immediately. Also, if the student-athlete is certain to receive an amount in no more than X years there would be many people willing to pay him the discounted present value in exchange for transferring the right to receive the money in the future.

Right. And imagine the outcry with the first hardship story.

[grad_devil]

I think I just saw that the NCAA stay was granted.

It was from bleacher report, so take it for what you will.

Edit:

Here is a slightly more reputable source reporting that the courts have granted a 1 week stay of the injunction.

[swood1000]

Here is the language the court used:

Without expressing a view as to either party’s likelihood of success on the merits, the court grants a stay of the district court’s injunction in this case, dated August 8, 2014, to preserve the status quo until this court’s mandate has issued.

Not sure where the "one week" came from. Maybe they misread it to say that there was a stay until August 8, 2015.

[swood1000]

They said they were not expressing a view as to either party's likelihood of success on the merits. Nevertheless, to grant the stay the court had to find that the NCAA

made a strong showing that [it] is likely to succeed on the merits...All of these formulations indicate that, "at a minimum," a petitioner must show that there is a "substantial case for relief on the merits." ...The standard does not require the petitioners to show that "it is more likely than not that they will win on the merits." http://www.leagle.com/decision/In%20...0v.%20BULLOCK;

[lotusland]

There apparently are many who believe that most “amateur” athletes take money surreptitiously and avoid penalties. In a recent nationally syndicated cartoon, "The Small Society," one character is asked, "What is the difference between an amateur and professional athlete?" His reply was that "the pros get paid by check."

How many posters here believe that in Division I MBB today there is a significant amount of money, beyond the officially approved benefits, finding its way into the pockets of players or their families (including payments to be delivered after the athlete turns pro)? The argument is that it's happening anyway and we might as well be honest about it.

http://www.sbnation.com/college-foot...-man-interview

This article about and unamed SEC "bag man" is over a year old but I found it illuminating. I'm inclined to believe that nearly all, if not all, SEC football programs have boosters who perform this role. Ditto for any program that has a rabid fan base including some boosters who's identity is a little too tied up in the ball team. Boosters with cash-intensive businesse who are willing to part with $5K-$25K a year in exchange for feeling like part of the team. I think we've seen glimpses of this at UNC with Fat's cars, the mouth guards, etc.

After ruminatig on this article for a few months I decided that it's not entirely bad. Because the payments are made so that there can never be any evidence other than one person's word against another, you're not talking about millions or even hundreds of thousands of dollars over the course of a player's career.

Rather than dole out large sums of money, the bag man usually prefers to hand over frequent payments of $200 to $500. It prevents the player from overspending, losing the money or getting robbed, and ...

"I don't like to run around with thousands in cash on my person, either. This isn't 'Scarface.'"

So I'd be in favor of player stipends but not allowing players to go to the highest bidder whether it be a booster or endorsement company. I'd prefer the bag man to either.

[cspan37421]

Just a reminder ...

every person, whether athlete or laborer, cheats our country - and by extension, all of us - if they don't pay taxes on their income.

And I'm guessing that money from "bag men" etc. isn't declared as income.

Perhaps not all, or even many, are bothered by this. But I am.

And I expect cheating on taxes has other corrosive effects on character and behavior. It's not a victimless crime.

[swood1000]

http://www.sbnation.com/college-foot...-man-interview

This article about and unamed SEC "bag man" is over a year old but I found it illuminating. I'm inclined to believe that nearly all, if not all, SEC football programs have boosters who perform this role. Ditto for any program that has a rabid fan base including some boosters who's identity is a little too tied up in the ball team. Boosters with cash-intensive businesse who are willing to part with $5K-$25K a year in exchange for feeling like part of the team. I think we've seen glimpses of this at UNC with Fat's cars, the mouth guards, etc.

After ruminatig on this article for a few months I decided that it's not entirely bad. Because the payments are made so that there can never be any evidence other than one person's word against another, you're not talking about millions or even hundreds of thousands of dollars over the course of a player's career.

So I'd be in favor of player stipends but not allowing players to go to the highest bidder whether it be a booster or endorsement company. I'd prefer the bag man to either.

By 'stipends' do you mean the $2,000-4,000 cost-of-attendance payments? (The amount of the payment for each school can be found by going to http://www.collegedata.com/ and typing in the name of the school. After hitting enter put the cursor over the school name and select Money Matters. The COA figure is apparently the 'Other Expenses' amount.) I guess that one problem with this is that it doesn't put a stop to the "bag man" but only supplements that source. From a university cost standpoint it seems pretty clear that Title IX would require equal COA amounts to be paid to all student-athletes, whereas the O'Bannon-type payments into trust would seem to have a decent chance of being considered of the type that could be limited to the sports that generate a profit.

[swood1000]

From a university cost standpoint it seems pretty clear that Title IX would require equal COA amounts to be paid to all student-athletes, whereas the O'Bannon-type payments into trust would seem to have a decent chance of being considered of the type that could be limited to the sports that generate a profit.

Maybe this is one reason that NCAA Division I board of directors chairman Harris Pastides said he is not inclined to have the NCAA try to get the US Supreme Court to hear the Ed O'Bannon case if the 9th US Circuit Court of Appeals rules unfavorably against the association. If they really only want to supplement the athletes in the revenue sports the O'Bannon-type payments could give them some cover for that whereas COA payments probably couldn't be so restricted because of Title IX. Maybe they think that they could keep the O'Bannon payment amounts under control, and somewhere near the amount that COA payments would be. Maybe some of the schools that begin making COA payments this coming year will stop doing that if O'Bannon is finally confirmed.

Edit: On the other hand, the schools that continue making the COA payments would then have an advantage with the revenue sport athletes, especially since COA payments are in-hand now.

[swood1000]

The 9th Circuit Court of Appeals finally came out with their opinion today, which reversed the trial court on the question of whether schools could pay student-athletes up to $5,000 per year in deferred compensation, to be held in trust until after they leave college. They affirmed the trial court on the question of allowing schools to give scholarships up to the full cost of attendance. The court's summary:

After a bench trial and in a thorough opinion, the district court concluded that the NCAA’s compensation rules were an unlawful restraint of trade. It then enjoined the NCAA from prohibiting its member schools from giving student-athletes scholarships up to the full cost of attendance at their respective schools and up to $5,000 per year in deferred compensation, to be held in trust for student-athletes until after they leave college. As far as we are aware, the district court’s decision is the first by any federal court to hold that any aspect of the NCAA’s amateurism rules violate the antitrust laws, let alone to mandate by injunction that the NCAA change its practices.

We conclude that the district court’s decision was largely correct. Although we agree with the Supreme Court and our sister circuits that many of the NCAA’s amateurism rules are likely to be procompetitive, we hold that those rules are not exempt from antitrust scrutiny; rather, they must be analyzed under the Rule of Reason. Applying the Rule of Reason, we conclude that the district court correctly identified one proper alternative to the current NCAA compensation rules—i.e., allowing NCAA members to give scholarships up to the full cost of attendance—but that the district court’s other remedy, allowing students to be paid cash compensation of up to $5,000 per year, was erroneous. We therefore affirm in part and reverse in part.

Still reading the opinion...

[swood1000]

The Court of Appeals on the payments into trust that had been allowed by the district (trial) court:

Both we and the district court agree that the NCAA's amateurism rule has procompetitive benefits. But in finding that paying students cash compensation would promote amateurism as effectively as not paying them, the district court ignored that not paying student-athletes is precisely what makes them amateurs. ...

The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point; we have little doubt that plaintiffs will continue to challenge the arbitrary limit imposed by the district court until they have captured the full value of their NIL [names, images, and likenesses]. At that point the NCAA will have surrendered its amateurism principles entirely and transitioned from its "particular brand of football" to minor league status.

[TampaDuke]

Interesting decision. At first blush, I'd imagine that the NCAA is more pleased than the plaintiffs, even though the Court rejected the NCAA's argument that the antitrust laws essentially don't apply to it.

Of note, as summarized by the court, at p. 63 of the opinion:

The [antitrust law] requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.

So, essentially the NCAA must continue to allow what it already implemented awhile back (full cost grant in aid scholarships), but it can prohibit schools from paying additional cash payments.

I would think the plaintiffs will ask for either a rehearing by the full Ninth Circuit or will seek to appeal to the Supreme Court, or both.

I'm not sure the NCAA would want to appeal, since they can likely live with the result and any appeal might result in the original trial court decision being upheld in full. That said, there is some language in the opinion which seems (to me at least) to suggest that the NCAA might have a more difficult time prohibiting certain other benefits, such as cash payments made by someone other than the school itself.

[Nugget]

Interesting decision. At first blush, I'd imagine that the NCAA is more pleased than the plaintiffs, even though the Court rejected the NCAA's argument that the antitrust laws essentially don't apply to it.

Having read it, I tend to agree that the NCAA would view this decision as very favorable to them -- much "less bad" than it could have been.

The Ninth Circuit adopted/applied/reaffirmed the continuing validity of the Supreme Court's decision 30 years ago in Board of Regents that the restraints are subject to the Rule of Reason, rather the rule of "per se" illegality generally applicable to this type of price-fixing between horizontal competitors.

The Ninth Circuit also reaffirmed Board of Regents acceptance of promoting amateurism as a "pro-competitive justification" under the Rule of Reason (and that much of the value of the collegiate sports market is exactly because the players aren't paid and that this is not the equivalent of MLB's minor leagues).

And, the heart of the rationale for the ruling overturning the decision allowing a $5,000 trust payment for name/likeness rights for video games would, seemingly, apply to the far more threatening to the NCAA question of whether in a subsequent suit players could challenge for a right to a share of the TV contracts, which I'll quote at length (taking out the case citations):

“The third step in the Rule of Reason analysis is whether there are substantially less restrictive alternatives to the NCAA’s current rules. We bear in mind that—to be viable under the Rule of Reason—an alternative must be ‘virtually as effective’ in serving the procompetitive purposes of the NCAA’s current rules, and ‘without significantly increased cost.’

In our judgment, however, the district court clearly erred in finding it a viable alternative to allow students to receive NIL cash payments untethered to their education expenses. . . . The question is whether the alternative of allowing students to be paid NIL compensation unrelated to their education expenses, is “virtually as effective” in preserving amateurism as not allowing compensation. . . .

Having found that amateurism is integral to the NCAA’s market, the district court cannot plausibly conclude that being a poorly-paid professional collegiate athlete is “virtually as effective” for that market as being as amateur. Or, to borrow the Supreme Court’s analogy, the market for college football is distinct from other sports markets and must be ‘differentiate[d]’ from professional sports lest it become ‘minor league [football].’ . . .

Aside from the self-evident fact that paying students for their NIL rights will vitiate their amateur status as collegiate athletes, the court relied on threadbare evidence in finding that small payments of cash compensation will preserve amateurism as well the NCAA’s rule forbidding such payments. Most of the evidence elicited merely indicates that paying students large compensation payments would harm consumer demand more than smaller payments would—not that small cash payments will preserve amateurism. Thus, the evidence was addressed to the wrong question. Instead of asking whether making small payments to student-athletes served the same procompetitive purposes as making no payments, the evidence before the district court went to a different question: Would the collegiate sports market be better off if the NCAA made small payments or big payments? . . .

But there is a stark difference between finding that small payments are less harmful to the market than large payments—and finding that paying students small sums is virtually as effective in promoting amateurism as not paying them.”


Bybee has a reputation of being a bit of an "out there" judge, but if this stands, I think the NCAA would (at least internally) be breathing a big sigh of relief.

[swood1000]

I would think the plaintiffs will ask for either a rehearing by the full Ninth Circuit or will seek to appeal to the Supreme Court, or both.

The conditions exist for the Supreme Court to accept an appeal, since there is now a conflict between the Ninth Circuit and the Seventh Circuit Court of Appeals, over how to interpret the NCAA v Board of Regents case, which was the Supreme Court's statement on the applicability of antitrust law to the NCAA's activities. The decision of the Seventh Circuit in Agnew v NCAA was a lot closer to what the NCAA was asking for in this case, basically exempting the NCAA from antitrust scrutiny, but here the Ninth Circuit rejected that, saying that they didn't think that was what the Supreme Court had meant in Board of Regents.