The Ninth U.S. Circuit Court of Appeals on Wednesday issued a long-awaited ruling in the closely watched O’Bannon v. NCAA class-action antitrust lawsuit.
In a split decision, the three-judge panel ruled that the Northern District of California’s injunction allowing schools to pay athletes as much as $5,000 annually beyond the cost of attendance was "erroneous." But it found that giving student-athletes scholarships up to the full cost of attendance is permissible.
“The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap," Judge Jay Bybee wrote for the appeals court. “Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point.”
“There will be various legal interpretations of today’s decision by the Ninth Circuit,” ACE President Molly Corbett Broad noted in a statement. “But we are pleased to see that a key element of the ruling aligns with the principle we emphasized in our amicus brief filed last year: Student-athletes are first and foremost students, and transforming them into paid professionals would harm the quality of their overall educational experience. We believe the decision fundamentally reaffirms the NCAA’s interest in maintaining a tradition of amateurism among intercollegiate student-athletes.”
The O’Bannon case originated in 2009 when two former NCAA student-athletes filed class action suits against the NCAA, Electronic Arts, Inc. and Collegiate Licensing Co., alleging that these groups profited from student-athlete likenesses on television, in video games and on merchandise while athletes were prohibited from receiving payment.
The NCAA maintains that rules banning compensation for student-athletes’ likenesses are the same as the prohibition on being paid to play and therefore should be allowed under the U.S. Supreme Court’s amateurism precedent set in the 1983 case, NCAA v. Board of Regents of the University of Oklahoma.