O’Bannon Opinion – A Mixed Message to the World of College Sports

Seth Traub

Seth Traub

The Ninth Circuit Court of Appeals entered a landmark decision in the O’Bannon v. National Collegiate Athletic Association case on Wednesday, affirming the right of student-athletes to receive a full cost of attendance scholarship, but reversing a prior decision that allowed them to receive further compensation.

At first look, it appeared that the decision was a victory for student-athletes as headlines across the country decreed that the Ninth Circuit had ruled that a ban on pay to student athletes was illegal.  Upon further review, however, it seems the NCAA dodged yet another bullet shooting through its amateurism status.  A thorough review of the opinion shows that we really do not know what might be next as a result of the Ninth Circuit partially affirming and partially reversing the decision of the United States District Court.

For the NCAA, the ruling means they are subject to antitrust law.  The Ninth Circuit’s ruling upheld Judge Claudia Wilken’s decision that the NCAA violated antitrust rules by restricting what monetary compensation athletes can receive while playing collegiate athletics.  The panel—comprised of judges Sidney R. Thomas, Jay S. Bybee and Gordon J. Quist—was unanimous in finding that the NCAA’s rules violated antitrust laws, writing:

The NCAA is not above the antitrust laws, and courts cannot and must not shy away from requiring the NCAA to play by the Sherman Act’s rules.  In this case, the NCAA’s rules have been more restrictive than necessary to maintain its tradition of amateurism in support of the college sports market. The Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.

For college athletes, the ruling means they still cannot  receive  compensation  for use of their name, image, and likeness.  Full cost of attendance is permitted, but nothing more without affecting the student-athlete’s amateur status.  But full cost of attendance appears a moot point because the NCAA began permitting schools to pay full cost of attendance scholarships earlier this year.

As commentary continues to circulate regarding the decision, there is one common sentiment – the mixed message of the court most likely will lead to continued litigation over the NCAA model and what constitutes amateurism, and a potential trip the United States Supreme Court.

This article was co-authored by Seth Traub and Dana Drew Shaw.  For more information contact either Seth (straub@slk-law.com) or Dana (dshaw@slk-law.com).

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