NCAA Fails to Stop Licensing Lawsuit

On February 8, a district court judge in San Francisco on Monday denied the N.C.A.A.’s motion for dismissal in a class-action lawsuit headed by the former U.C.L.A. basketball star Ed O’Bannon. The ruling leaves the N.C.A.A.’s licensing contracts open to discovery. O’Bannon’s lawyers filed the antitrust suit in July, claiming that former athletes should be compensated for the use of their images and likenesses in television advertisements, video games and on apparel. They said Monday’s ruling was an important first step. O’Bannon, who led U.C.L.A. to the 1995 national title, brought the lawsuit after he kept seeing his likeness used each year around N.C.A.A. tournament time.

In October 2008, the Knight Commission on Intercollegiate Athletics met to discuss the emerging conflict between new forms of media and long-standing NCAA rules designed to protect athletes from commercial exploitation. R. Gerald Turner, co-chairman of the Commission and president of Southern Methodist University, stated: “We continue to believe that universities need to treat athletes fairly and equitably, and for third parties to use them in commercial products and advertisements violates that principle.”

According to an article in the New York Times, the N.C.A.A.’s licensing deals are estimated at more than $4 billion, although all of those deals may not be made public in this case. The N.C.A.A. said in a statement that it was confident in its case. “We’re pleased that the court recognized defects in some of the claims made by plaintiffs and dismissed those,” said a statement provided by the N.C.A.A. spokesman Erik Christianson. “The court’s other rulings at this preliminary stage of the cases do not diminish the N.C.A.A.’s confidence that we will ultimately prevail on all of the claims.”

The significance of this case appears to transcend financial reward, as its cuts to the core of the N.C.A.A.’s amateurism ideals.

Michael McCann, a professor at Vermont Law School who specializes in sports law, called Monday’s ruling a “setback” for the N.C.A.A. He said that the case would probably be followed closely by members of Congress who were interested in the N.C.A.A.’s tax-exempt status. “I think it’s an important case because it gets at the core of the student-athlete mission and the issue that new players have in terms of waving away potential benefits they may enjoy when they’re out of college,” McCann said.