Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: December 29, 2014
The Firm
201-896-4100 info@sh-law.comIf you are a D-I student-athlete or hope to be one soon, this ruling may have an effect on the offers that you receive from your institution. I’ll be exploring this ruling, the anti-trust laws behind it and how it will affect student-athletes.
The decision applied specifically to NCAA rules that disallow student-athletes from receiving revenues from the sale of licenses for so-called “NIL’s”, or Name, Images and Likenesses. Currently, schools often sell these licenses to third parties and keep the profits under the agreement between them and the student. Students are barred from selling these licenses independently or accepting anything of value under NCAA amateurism rules.
Wilkens ruled against O’Bannon on several counts. She held that the plaintiffs failed to show how the NCAA policy forbids the sharing of these revenues with student-athletes actually being caused harm, that NCAA restraints are preventing competition between students to sell group licenses or that the restraints have an anti-competitive effect on the buyers’ market for group licenses.
Where Wilkens did rule in O’Bannon’s favor was in regards to the college education market. She found that schools with elite athletics programs are the only supplier of college education in this specific market – that is, high level student-athletes – and that they act in concert with the NCAA to fix the price of their product. In this case, the price of their product is not the nominal cost of tuition, but rather the recruit’s athletic services and the use of his or her name, image and likeness. In the absence of this restraint, Wilkens opined that schools would compete against each other for the best recruits by using more attractive scholarships and licensing stipends.
In simple terms, Wilkens ruled that colleges and the NCAA are working together to keep the “cost” of a student-athlete’s services and licensing rights down. As of now, the cost is only the price of a college education – the maximum allowed under NCAA amateurism rules.
Under the Sherman Act, the first anti-trust law established in the United States, “every contract, combination or conspiracy in restraint of trade” is forbidden, though this has long been interpreted to mean only unreasonable restraints of trade. Those practices that are almost always considered to be unlawful under the Sherman Act include things like bid rigging, dividing markets and fixing prices.
By agreeing together not to offer licensing rights or payment in excess of the cost of attendance, colleges and the NCAA are effectively fixing the price of the student’s athletic services, according to Wilkens’ ruling. Insofar as this constitutes a violation of the Sherman Act, it is therefore unlawful.
Students in D-1 athletics programs shouldn’t start selling licensing rights yet. The results of Wilkens’ ruling seem likely to be fairly limited in scope.
First, Wilkens ruled that any collusion not to pay for NILs was enjoined, but that she might accept a plan for deferred payments for costs above the full cost of attendance. Further, she said that she would strike down a cap on deferred payments below $5,000, implicitly opening the door to a $5,000 cap.
Perhaps more importantly, Wilkens is not mandating $5,000 worth of compensation, nor even the full cost of attendance. The only thing that this ruling does is to ban schools from agreeing together not to increase their compensation.
The NCAA has already appealed the ruling, but it may well hold. If so, expect to see offers of deferred compensation for licensing rights within a few years.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
Author: Robert L. Baker, Jr.
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
Author: Brian D. Spector
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Author: Dan Brecher
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
Author: Brian D. Spector
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!