The 5 biggest threats to the NCAA’s existence

4. The Ed O’Bannon Decision

It’s easy to look at the Ed O’Bannon class action suit against the NCAA as something far less profound than what it really is. On its surface, it is about using player likenesses in video games and whether college athletes deserve some part of the revenues those games make. But the decision reaches much further than that.

The ruling essentially said that players who have their likenesses used in video games do need to be paid for it. The NCAA and its members are to create a trust that will eventually pay out to the affected athletes (FBS football and Division I basketball), they may not collude with one another to fix the price of said payments and all payments will be rendered after a player’s eligibility expires or he leaves the school. The value of those payments may be no less than 5,000 dollars, so if a player was on a roster for four years he can expect to see at least 20,000 dollars upon leaving school.

The NCAA has already made clear it will appeal the decision and in the meantime all video games that carry the NCAA license have been mothballed. Frankly, considering what a profitable venture these games are (EA’s NCAA Football has earned over 1.3 billion dollars in its lifetime), the move is short-sighted and tone-deaf.

But the more pressing issue for the NCAA in the aftermath of the O’Bannon decision was how some of its biggest arguments — the staples upon which the NCAA’s defense of itself is built — were utterly demolished in US District judge Claudia Wilken’s 99-page decision.

For starters, the NCAA has alleged on many occasions that paying athletes would diminish fan interest, lower ratings and hurt profitability. That’s actually an interesting argument for an organization that supposedly champions amateurism to make, but what the NCAA was attempting to argue was that it’s the amateurism itself that serves as the captivating force that keeps fans interested and that its dissolution would be detrimental to the entire athletic landscape. Wilken didn’t buy it.

"Thus, the Court finds that the NCAA’s restrictions on student-athlete compensation are not the driving force behind consumer demand for FBS football and Division I basketball-related products. Rather, the evidence presented at trial suggests that consumers are interested in college sports for other reasons."

Wilken also cited the current distribution of revenues amongst NCAA institutions as evidence that claims about competitive balance being affected were baseless, essentially asking, ‘what competitive balance?‘

And while the NCAA will ultimately appeal — and any payment to athletes will be delayed for years to come — the foundation upon which the NCAA’s defense has been built was effectively undermined in the pages of Wilken’s decision.

With more and more litigation pending against it, Wilken’s arguments will become even more detrimental to the NCAA.