Student-athlete class suit against NCAA struggling to move forward

OAKLAND, Calif. (CN) — After nearly a year, student-athletes are still waiting for approval to proceed with class action claims that the National Collegiate Athletic Association blocked their ability to earn commercial revenue.

The student-athletes are seeking to move forward as a class in federal court, challenging a subset of the association’s rules that “prohibit student-athletes from receiving anything of value in exchange for the commercial use” of their names, images and likenesses.

The rules at issue block student-athletes from endorsing any commercial product or service while in school. They also ban student-athletes from receiving compensation for their name from outside employment and from using their name to promote business ventures or engage in self-employment. 

That precludes student-athletes from benefiting financially from social media posts, personal brands and viral videos depicting their athletic performances. The plaintiffs also say the association’s member conferences and schools are blocked from sharing revenue earned from broadcasting contracts with networks, marketing contracts with sports apparel companies, social media sponsorships and other commercial activities which use student-athletes’ name or image. 

In their motion to certify class filed in October 2022, the student-athletes said they are seeking damages for people in the Football and Men’s Basketball Class, the Women’s Basketball Class and the Additional Sports Class. They are represented by Hagens Berman Sobol Shapiro LLP and Winston & Strawn LLP.

“Since the NCAA implemented its Interim NIL Rules on July 1, 2021, thousands of athletes from a variety of Division I sports at hundreds of NCAA schools have received third party payments for their NILs,” the athletes said. “These real world transactions demonstrate the significant pent-up demand for college athlete NILs and the substantial harm that the prior rules caused to class members.”

The NCAA's attorneys told U.S. Senior District Judge Claudia Wilken in a hearing Thursday that some student-athletes might stay in school longer if they have a form of commercial revenue. When Wilken said the plaintiffs were all similarly situated, attorney Rakesh Kilaru disagreed, saying it is a core problem with how the plaintiffs define the classes of people who can seek damages for injury.

“The class is defined in a certain way and it’s pretty straight forward. It’s not hard to prove who’s on the teams. It’s not like some of the other cases where this sort of issue has come up," Wilken said in response.

Steve Berman, attorney for the plaintiffs, said, “All we have to do is say these people were subject to the restraint.” He cited three other cases which he said refuted Kilaru’s points, including that a move for class certification can’t be defeated by the argument that different class members may face different consequences. 

Kilaru said he thought it necessary to find out who in the classes are injured, and that the plaintiffs need a working economic model to do so.

“There’s no way they’re going to value a starting quarterback just as much as an offensive linebacker who’s going to play on a different team,” Kilaru said.

The defendants also contested the idea that athletes should get disproportionate compensation based on their sex. Wilken suggested that schools find ways to pay women athletes higher shares of revenue connected to their likeness, and noted that the NCAA has made it impossible to know exactly what the value of an athlete’s name under them is worth.

Kilaru said there is no way to know how much an athlete would have earned or if it would be the same amount each year, if the challenged rules did not exist. When Wilken asked “If John Doe got X this year, why isn't it reasonable to say he probably would have gotten that amount in previous years?” Kilaru said some recorded 2021 payments may have never been made, or vary.

Plaintiffs’ attorney Jeffrey Kessler defended his side’s calculation of the value of each student-athlete's name or likeness based on revenue from broadcasts. 

“Regrettably, the broadcast contracts are much larger for men’s basketball than for women’s basketball, for example," he said of the pay discrepancy between men and women. "There may be real deficiencies in the NCAA in how they promote women’s basketball.”

The judge did not indicate when she will rule. The case is scheduled for trial in January 2025. 

Wilken partially denied the NCAA’s motion to dismiss claims for damages in her July 2021 order, ruling that the reliance on non-binding authorities that suggest that student-athletes may not have a legal entitlement to broadcasts under the laws of some states is “misplaced.” However, she granted the motion to dismiss the plaintiffs’ attempt at injunctive relief.

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