NCAA Asks Court to Delay Aug. 1 Payment Offers to Players

By CBS | July 17, 2015


The NCAA asked the US 9th Circuit Court of Appeals on Friday to delay an injunction that starting Aug. 1 would allow schools to offer future payments to football and men’s basketball players.

The Ed O’Bannon case has been before this same appellate court for many months and a hearing was heard on March 17. The court has yet to issue its opinion on whether US District Judge Claudia Wilken erred in ruling the NCAA violated antitrust law, and the clock is ticking.

Under Wilken’s injunction, starting Aug. 1 the NCAA must allow each school to pay football and men’s basketball players up to the federally-defined cost of attendance plus as much as $5,000 per year for the licensing use of players names, images and likenesses (NILs). On Aug. 1, schools can begin sending written offers to recruits who are scheduled to enroll after July 1, 2016. The actual payments would start in the 2016-17 academic year.

Wilken has previously said she would not delay the injunction pending appeal, so it’s up to the US 9th Circuit Court of Appeals to stay the injunction, issue its decision or do nothing by Aug. 1. The NCAA said the O’Bannon injunction would cause “irrevocable harm” even if it’s later vacated by the 9th Circuit or the Supreme Court — an indication the NCAA might try to take the O’Bannon case to the country’s highest court if the 9th Circuit decision is unfavorable.

The consequences for the NCAA could be significant if offers to payments are permitted to begin on Aug. 1. If the marketplace shows how such offers could manageably work, it could further damage the NCAA’s amateurism model. The NCAA has had a committee working behind the scenes on how to change its bylaws if the injunction goes into effect on Aug. 1.

“If allowed to take effect, the injunction would radically alter an essential quality of college sports, amateurism,” the NCAA wrote in its motion Friday. “It would also fundamentally alter the way in which colleges recruit high school students, and thus redefine the process by which those students make one of the most momentous choices of their lives: which college to attend. And, to remain competitive in football and men’s basketball, schools may be forced to make NIL payments by cutting participation opportunities, and perhaps even cutting some teams entirely.”

Michael Hausfeld, the lead attorney for the O’Bannon plaintiffs, said the NCAA’s motion for a stay was expected.

“I think there are many schools and many conferences and many athletic directors that are prepared for the injunction,” Hausfeld said. “I think the NCAA as a hypocritical organization is not. This is an organization clearly in chaos. The NCAA obviously doesn’t speak for its member schools. The member schools don’t speak for the NCAA. Neither speaks for the athletic directors. The conferences believe they have their own choice. And none of the above speaks for the athletes.”

An example of the mixed opinions within college sports occurred in May, when Division I Board of Directors chairman Harris Pastides told he is not inclined to have the NCAA try to appeal O’Bannon to the Supreme Court. Soon after, NCAA Board of Governors chairman Kirk Schulz put out a statement saying board members may have varying views and that the NCAA has not ruled out any further appellate options.

In its motion Friday, the NCAA said the injunction would force the association and its members to “devote substantial resources to overcoming an array of complex legal problems created by the injunction.” The NCAA said it’s unclear whether Title IX would mean that schools that offer NIL payments to football and men’s basketball players must offer comparable payments to an equal number of female athletes. Also, the NCAA said, it’s unclear how NIL payments would be treated for tax purposes and whether the IRS would consider these payments, like athletic scholarships, to be exempt from taxable income to athletes.

The NCAA argued that allowing the injunction to occur would “distort the recruiting process — with effects that similarly could not be undone by a later vacatur. In the face of such promises, some students would make decisions about what college to attend … not based on how they would fit into a school’s academic, athletic and social communities, but based simply on how much money they would be paid. This would undoubtedly result in some student-athletes’ having diminished undergraduate experiences and diminished success afterward.”

In addition, the NCAA wrote that promises of deferred shared licensing revenue would “damage the legitimate of the athletic contests, as some schools would field teams that adhered to the traditional amateur model while others would not. Even if just one class were recruited with promises of such payments, those students could remain on NCAA teams for years, causing the injunction’s effects to linger long after vacatur. Even if the injunction is later vacated, these fundamental changes would irreparably tarnish the NCAA and the goodwill associated with its role in promoting amateur college athletics.”

In another argument, the NCAA said schools that chose to promise NIL payments might get the money but cut funding other parts of their football and men’s basketball teams, “such as the overall number of scholarships, coaching staffs, facilities, equipment, and other support, which contribute to the overall student-athlete experience.” Other schools might eliminate sports programs altogether, the NCAA wrote.

Finally, the NCAA wrote, it’s in the public’s interest to “continue permitting rules that have long protected student-athletes from commercial pressures, and to ensure that the nation’s colleges and universities need not unnecessarily divert their resources and attention away from their educational mission.”

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