In dismissing a motion by the NCAA to prevent football and men's basketball players from legally pursuing a cut of live broadcast revenues, a federal court judge Tuesday raised the stakes for the governing body of college sports as it defends its economic model.
Judge Claudia Wilken issued her ruling Tuesday, rejecting the NCAA's motion that players in the antitrust suit led by former UCLA star Ed O'Bannon should be precluded from advancing their lawsuit on procedural grounds.
The NCAA had objected to the players amending their lawsuit last year to claim a share of all television game revenues, not just those from rebroadcasts.
"Now the (NCAA and its co-defendants) are facing potential liability that's based on the billions of dollars in revenue instead of tens or hundreds of millions," said Michael Hausfeld, interim lead counsel for the plaintiffs. "It's a more accurate context for what the players deserve."
Unlike NFL or NBA athletes, players lack a union or similar body to negotiate a share of revenues flowing from media and other licensing contracts. The NCAA does not legally treat athletes as employees, and players have not organized to represent their interests collectively.
The O'Bannon suit attacks that model through the means of class-action, the legal question now before Wilken. Former college stars such as Bill Russell and Oscar Robertson have joined O'Bannon on behalf of all Division I players in football and men's basketball, asking Wilken to declare that they are similarly situated and to certify the class.
Wilken on Tuesday set the hearing on that motion for June 20 and ordered the NCAA to make its arguments against class certification on the merits rather than procedural objections such as the one she just rejected. The NCAA was joined in that motion by its partner, Collegiate Licensing Company.
In a statement, NCAA general counsel Donald Remy characterized the ruling as a partial victory for the NCAA.
"Although our motion to strike was denied, the judge has signaled skepticism on plaintiff's class-certification motion and recognized the plaintiffs' radical change in their theory of the case," Remy said. "This is a step in the right direction toward allowing the NCAA to further demonstrate why this case is wrong on the law and that plaintiffs have failed to demonstrate that this case satisfies the criteria for class litigation."
The ruling was met with enthusiasm by Hausfeld, who leads a team that includes more than a dozen law firms that have invested more than $20 million in legal fees pursuing the lawsuit since 2009. The prospect of an award that recognizes live broadcast revenues helps support their efforts.
In the event that the plaintiffs prevail, Hausfeld has set up a mechanism for players to collect licensing revenues. The Former College Athletes Association (FCAA) would negotiate licenses with the NCAA, member colleges, video game and media companies, according to Jon King, a former Hausfeld LLC lawyer who worked on the case.
King disclosed the existence of the FCAA in a wrongful termination suit he filed against Hausfeld earlier this month. He was fired by Hausfeld for undisclosed reasons in October, after serving as one of the lead lawyers in developing the case for the plaintiffs.
Details about the FCAA are scant, but Hausfeld said it would not serve as a revenue stream for his firm. Overseeing formation of the FCAA are Sonny Vaccaro, an unpaid consultant who has worked with Hausfeld to build the anti-trust case; Ramogi Huma, president of the National College Players Association; and Ken Feinberg, a prominent Washington D.C. attorney who helped distribute nearly $7 billion to victims of the 9/11 terrorist attacks and has run other major victim compensation efforts.
"Current, former, and future athletes are one step closer to protections and freedoms that other American citizens are permitted," Huma said in a statement to ESPN. "It's great that the NCAA and its members have been able to capitalize monetarily on the publicity rights of their athletes, but there is no justification to deny them a portion of the benefits. The FCAA will be prepared to ensure that athletes ultimately receive what is rightfully theirs as Americans in a capitalistic, free market society."
Wilken has set a jury trial on the matter, if it gets that far, for June 2014.