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College Football Players Sue NCAA, EA Sports for Royalties

The NCAA, which proclaims itself the guardian of amateur athletics in this country and the protector of the rights of the student athlete, has been called to account once again. This time by student athletes, several of whom have filed class action lawsuits against the NCAA and Electronic Arts for appropriating their likenesses for commercial use without their consent and without compensation. Two of the more popular video games produced by EA Sports are NCAA Football and NCAA Basketball (along with its spinoff, March Madness). Both games use characters that so closely resemble their live counterparts as to be virtually indistinguishable despite the lack of names used in the games.

While it's true that NCAA athletes sign a waiver as freshmen stating that they will not benefit from their names or their athletic success, all that does is prevent the athletes from competing with the NCAA and its member schools, which don't want any competition in the market for licensed apparel, games or other items. The field is too valuable to the schools, which make a considerable amount of money selling jerseys and other items featuring the jersey numbers (but not the names) of their most popular athletes.

So, what are the plaintiffs chances here? I would think the NCAA and EA Sports have a real problem on their hands. For one thing, as pointed out in the New York Times article, the NFL players association recently settled for $26.25 million, a similar case with its retired players, following a US District Court Judge's award of $28.1 million following the trial of the retired players' claim that the NFLPA failed to include the retired players in its licensing agreement with EA Sports for the Madden NFL Football franchise. While this case is somewhat different, it is, if anything, even more egregious. Not only is it a blatant appropriation of the student athletes likenesses without compensation, but it violates the NCAA's own rules and regulations. NCAA Bylaw 12.5 specifically prohibits the commercial licensing of a student athlete's "name, picture and likeness."

A loss by the NCAA in this case will have reverberations throughout the entire commercial licensing scheme currently employed by the NCAA. A win will certainly mean that in addition to determining the value of damages to student athletes from EA Sports, the court should also be involved in calculating the damages the student athletes have suffered from the sale of the licensed merchandise carrying the jersey number or other identifying characteristics of a student athlete. After that comes the nightmarish problem of determining who, and for how much, student athletes are entitled to receive under a judgement or settlement. If I were representing the NCAA, based on what I know now, I would not want to see this case go to trial and would actively pursue a settlement. You don't want to see an adverse judgement entered - it would be just too expensive.

Full post as published by Sports Biz on July 06, 2009 (boomark / email).