Antitrust Trial Asks if NCAA Is a Monopoly or a Monopsony
OAKLAND, Calif. (CN) - Testimony in the NCAA antitrust trial ended Friday with U.S. District Judge Claudia Wilken questioning plaintiffs' and NCAA attorneys on the antitrust theory that could decide the future of college sports.
Wilken opened the afternoon session on Friday, the fifteenth day of the trial, saying, "The question is only whether an antitrust situation has happened."
She then asked what was the product and what was the market in this situation.
At issue are the value of the names, images and likenesses rights of student athletes, which are appropriated by the NCAA and the colleges, and broadcast on TV, presumably in exchange for a college education and the opportunity to play.
Former UCLA basketball player Ed O'Bannon is lead plaintiff for the class.
"This is a complicated transaction, depending on who is the buyer and who is the seller," Wilken said. "There are elements in which the student is buyer and the student is seller."
She postulated that the price of the educational service is not reduced by the value the athlete brings to the transaction.
"The athlete is paying the full cost of tuition, in essence. The athlete is saying, 'That is not really enough to cover what I am bringing in exchange.'"
This led to a complicated exchange between Wilken and NCAA attorney Glenn Pomerantz, and Michael Hausfeld and Bill Isaacson for the student athletes.
Wilken asked if this was a case of a monopoly or its opposite, a monopsony, in which a single buyer can choose between multiple sellers.
"What do you want your theory to be?" she asked Hausfeld.
He replied: "It is difficult to unbundle both forces together. We would assert it is both a monopoly and a monopsony."
The NCAA's Pomerantz asked: "What is the antitrust injury or impact?"
Isaacson replied: "The label does not matter, the result is the same, the impact is the same."
Pomerantz rebutted that it would be inappropriate to allow the plaintiffs to change their theory to a monopsony case.
"Their claim is monopoly, it is not connected to the restraint, which is NIL [name, image and likeness]," he said.
When Pomerantz asked what the remedy would be if the case were a monopsony, the judge's response that "it could be remedied with a new trial" drew groans from seat-weary observers.
Hausfeld said again that the name of the market does not matter, the restraint is the same.
"One restraint is on the student going to college and the opportunity to participate in athletics," he said in an apparent reference to Isaacson's earlier remark that "if you want to play professional sports you must go to an NCAA school."
Wilken's question: "Why did you go with the NIL thing instead of saying, 'Why don't you pay us more,'" sent a light ripple of laughter through the courtroom that quickly died as the questions of law continued to fly.
Pomerantz wanted to know if the plaintiffs had proven there had been an anticompetitive effect. He maintained that if there had been no effect on the consumer, the plaintiffs had not proven the anticompetitive effect.
"It's too bad for them because they aren't getting paid, but it's not too bad for the TV viewers because they are getting plenty of broadcasts," Wilken said.
She then returned to questions of who was being harmed, the sellers or the consumers, and whether the injury could be traced to less output and less choice for the consumer.
"If the market is the group license, is the product the video game?" Wilken asked.
"The group license does not exist in a vacuum; it goes along with the product," Hausfeld said.
Wilken then postulated less-restrictive possibilities, such as putting name, image and likeness revenue into a trust for students after graduation, putting a cap on it, revenue sharing, or negotiating with the students for what would happen to their NILs after they graduate.
"The less-restrictive alternatives are only relevant if they allow the pro-competition benefits to be achieved, and they must also not themselves be antitrust violations," Pomerantz replied.
Wilken gave both parties until July 10 to file closing briefings. She is expected to rule in mid-August.
Outside the courthouse, NCAA chief legal officer Donald Remy said: "It's day 15 and we're way ahead. ... The NCAA has put forth a case that sustains its policies."
Lead plaintiff O'Bannon was also upbeat, saying: "I think it went great. We took a huge step forward. Players, athletes, students, whatever anyone wants to call them, we took a step forward in a positive direction. Whether you play, used to play or will play in the future, players will be taken care of, and I think that's the biggest thing."