🏈 O'Bannon vs. NCAA gets under way on Monday (Trial updates and commentary)

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In trying to make a point, the defense fumbled at a key juncture on day six of O'Bannon v. NCAA.

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The NCAA began making its case for keeping the current model for college sports, with the women's athletic director at the University of Texas testifying Tuesday that paying basketball and football players would tear apart the very foundation the school's athletics are based upon. Christine Plonsky said she couldn't imagine a scenario where some of her university's athletes were able to make money from their appearances in televised games, at the same time hundreds of athletes in other sports only get tuition and room and board for their efforts. ''I know we strongly believe our student-athletes should not be professionalized in any way.'' Taking the stand after six days of witnesses called by plaintiffs in the antitrust trial brought by former UCLA basketball star Ed O'Bannon and others, Plonsky said Texas regards athletes as students first, even for those in the high profile football and basketball programs that bring in tens of millions of dollars a year. Students do a variety of things on campuses like UT and others,'' she said, adding later: ''The progress toward a degree is emphasized as much as excellence on the playing field.'' Plonsky's testimony came after a Drexel University professor and author of a book on the influence of money on college sports gave the opposite viewpoint on the stand, saying the NCAA's contention that athletes in big money sports are students first is self-serving and designed only to perpetuate a myth of amateurism.

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Attorney Bill Isaacson stood in front of the federal courthouse on a sunny Tuesday afternoon and smiled as he thought about the performance of the witness who had taken the stand a few hours earlier. "I found her very truthful," Isaacson said, referring to the testimony of Texas women's athletic director Chris Plonsky.

This would be great news for Plonsky and her side of the argument if Isaacson represented the NCAA. Unfortunately, he represents former UCLA basketball player Ed O'Bannon and a class of recent football players in an antitrust suit against the NCAA, which accuses the association and schools of engaging in a scheme -- through the NCAA's rules -- to fix the price of names, images and likenesses of FBS football players and Division I men's basketball players at $0. I apologize in advance for the continuous use of sports metaphors while covering this trial, but I'm a sportswriter, and the one in the next sentence seemed especially appropriate. By calling Plonsky as a witness, the NCAA legal team served the plaintiffs a hanging curveball that their attorneys clubbed into San Francisco Bay.

It wasn't necessarily anything Plonsky said Tuesday. She forcefully defended the NCAA's version of amateurism and described quite accurately how the effectively Texas athletic department not only rolls up hefty revenue ($165.7 million in the 2012-13 school year) but also plows a nice chunk ($9 million for the same period) back into the university to help fund academic programs. This is exactly why the NCAA's legal team called upon her to testify. But it was what Plonsky's presence on the stand allowed the plaintiffs to push into the record that harmed the NCAA's case. It gave the plaintiffs' attorneys an opportunity to easily introduce evidence that proved NCAA and school officials have long been worried about the athlete name, image and likeness market that the NCAA's legal team is now claiming doesn't exist.

A few years ago during discovery, the plaintiffs' attorneys came across two sets of e-mails in which various school, conference and NCAA officials discussed the issue of name and likeness rights for college athletes. One was from 2008, and it involved an NCAA task force on commercialization issues on which Plonsky served. The other was from 2009, and it involved a chain that included Plonsky, then-Big 12 commissioner Dan Beebe and Nebraska chancellor Harvey Perlman. Some of the contents of those e-mails leaked during the run-up to the trial as plaintiffs included snippets in various motions and depositions, but they wanted those entire e-mails included at trial so Judge Claudia Wilken could see them in full.

Without Plonsky on the stand, plaintiffs' attorneys would have had to find a more creative way to introduce those e-mails into evidence. By calling Plonsky, the NCAA gave those e-mails an express ticket into the court record. They'll be readily available in the transcript when this case gets appealed to the circuit court -- no matter which side wins. One set didn't actually have much to do with Plonsky, but the fact that she was copied on the original e-mail gave the plaintiffs' attorneys an opening that they exploited to score another hit on the NCAA's credibility.

We'll start with Plonsky's e-mail to Beebe on Aug. 1, 2009. The O'Bannon case had been filed, but it was in its infancy. When she wrote them, Plonsky probably had no idea her words would wind up on a video board in the courtroom.

"This is how I feel: if a [student-athlete] can sue the ncaa for these two things -- one of which (the ea sports [video] game) only uses school marks and names, not s-a names, then what's to prevent all players from suing us to get a piece of every broadcast rights fee -- since clearly we use their names and images in those telecasts?" Plonsky wrote. "If I were cbs and espn, I'd be staring hard at these cases and maybe not being too excited about a media rights re-up w[ith] the ncaa."

There's nothing necessarily wrong with the first part of that statement. It's actually quite prescient. That's pretty much exactly what happened. Of course, it's quite inconvenient since it acknowledges a market that the NCAA claims doesn't exist. The second part merely shows a lack of understanding of the network side of the media rights purchase equation. CBS and ESPN will pay what they will pay; it's up to the NCAA and schools to decide how they allocate the money after that.

Plonsky plowed ahead. Later in the e-mail, she wrote this: "Has our ncaa board decided not to defend the notion that playing ncaa sports is not forced. (sic) It is a voluntary signup. We're like a version of the army."

Except for the fact that no one gets bombed, she's correct. Of course, Plonsky volunteers every day to serve as the Texas women's AD. No one forces her to do that, either. It hasn't stopped her from getting raises. In 2011, Plonsky's salary package rose from $305,848 to $355,848 -- not including a $62,500 bonus she would receive every year the Longhorns didn't commit a major NCAA infraction.

She wasn't done. Here's another passage: "I view these cases as a result of the entitlement attitude we've created in our revenue sports. We now have threatening s-a's (student athletes) -- many of whom, based on grad rates in the 80s and 90s, sucked a whole lot off the college athletics pipe -- and now want to buckle the system at the expense of today's s-a's."

Apparently, this entitlement attitude exists only in the revenue sports of football and men's basketball. Perhaps this is because the people who play those sports now realize they generate the money that pays for all the other sports and also the money that allows Texas to, as Plonsky put it on the stand, purchase the services of football coach Charlie Strong from Louisville in the form of a $4.375 million buyout. This might also be a good time to mention that the Texas athletic department has its own cable channel to help the Longhorns in the fight to protect their athletes from the evils of commercialization.

As tone deaf as Plonsky's e-mail was, it didn't really address the issues of this case other than acknowledging the market. What makes it more useful to the plaintiffs is the fact that Beebe forwarded it to Perlman, and both men then acknowledged the existence of the same market. Beebe and Perlman each tried to divine how athletes could be used to shill products without paying them for it. "If we mean an ad that features an SA that says: 'The NCAA and Coca Cola want you to know that 95% of the student athletes will go pro in something other than sports,' I'd probably be fine," Perlman wrote. "That, in my view, is public service advertising like done on public television."

Except for the fact that it would be an ad for Coke. And the star of said ad wouldn't be compensated for his role in it. But other than that, it's exactly like a PBS pledge drive.
The second set of e-mails began with a missive sent to the members of the NCAA's commercialism task force on Dec. 8, 2008 by Iowa professor Elizabeth Altmaier, who at the time served as the Hawkeyes' NCAA faculty athletic representative. Altmaier's e-mail discussed the format of the task force's report and made some content suggestions. It gets interesting near the end.

"I also think the likelihood of a student-athlete not approving his or her own image use is low. Student-athletes don't have much discretion as it is, and they sign these 'release' forms in a single meeting with literally a stack in front of them," Altmaier wrote. "Also, if competition footage is used, the release isn't as clear a question as if a single image is used.
"And I remain committed to the idea of having some return (financial) to the student athletes themselves. Falling short of at least suggesting that, especially since we are 'running up the flagpole' some other ideas, is a mistake, I believe."

So a member of an NCAA task force suggested that the idea of paying athletes for using their likenesses should be presented to the membership at large. What happened? At 3:10 the next morning, then-Penn State president Graham Spanier, the task force's chairman, fired off an e-mail to NCAA president David Berst. "For the record, Dave, I disagree strongly with her idea that we compensate athletes for the use of their images," wrote Spanier, who is currently awaiting trial on perjury charges in connection with the Jerry Sandusky case. "I wouldn't put this in the report at all -- not even a hint of the possibility."

These were some awfully high-level discussions about a market that supposedly doesn't exist. The fact that Spanier, long one of the NCAA's pet presidents before his ouster in the wake of the Sandusky scandal, scuttled any further discussion of paying for likenesses seems awfully defensive considering the NCAA now contends those likenesses have no value whatsoever.

Without Plonsky's appearance Thursday, Wilken and the other federal judges who will pick up the case after she rules might never have known all those discussions took place. Thanks to the NCAA legal team's decision to call Plonsky, they will. And they'll probably wonder why everyone seemed so darn worried about an allegedly non-existent market.



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Think O'Bannon is trouble for the NCAA? The fallout of Jenkins vs. NCAA could be even more crippling.

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Skeptical, the lawyer for the plaintiffs read Pilson a quote from the writings of the late Paul "Bear" Bryant, in which the legendary University of Alabama coach observed in retirement, "I used to go along with the idea that football players on scholarship were student athletes, which is what the NCAA calls them, meaning student first and athlete second. We were kidding ourselves, trying to make it more palatable to the academicians. We don't have to say that, and we shouldn't. At the level we play, the boy is really an athlete first and a student second."

 

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The head of the Big Ten painted a dire picture Friday of what college sports would look like if players were paid. Jim Delany said the idea of paying players goes against the entire college experience and he couldn't see league members agreeing to it. The longtime commissioner said it also would bring about the end of the Rose Bowl as a traditional New Year's Day game between Big Ten and Pac-12 teams. Delany followed NCAA President Mark Emmert to the witness stand in a landmark antitrust suit brought by former UCLA basketball star Ed O'Bannon and others.

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The last week of the O'Bannon v. NCAA trial began with a debate over math: Do Division I colleges make or lose money on sports? Answering this seemingly straightforward question proved impossible during Monday's hearing. Two witnesses for the NCAA, NCAA research director Todd Petr and Conference USA commissioner Britton Banowsky, testified. Both sparred with O'Bannon's attorneys over how revenue should be defined.

According to the NCAA calculations, Division I colleges spend about $12 billion a year on sports, but only receive about $6 billion in revenue. Per the calculations, the average annual deficit of a DI program is approximately $12 million. NCAA calculations indicate that merely a couple dozen schools are profitable; the rest are in the red. The central theme was clear: College sports may be lucrative, but they are not profitable. This is an important legal point, because one core factor to the NCAA's antitrust thesis is that academics and athletics are intertwined. If colleges lose money on sports, it would suggest that sports do not drive institutional decisions by college presidents and that student-athletes are not more important to schools than other students.

O'Bannon's attorneys raised two key arguments against the NCAA's definition of revenue. First was to question the underlying data. While Petr vouched for the NCAA's data on revenue and expenses, he admitted during cross-examination that the NCAA relies on reporting by individual schools and interpretation by Transylvania University professor Dan Fulks, whom the NCAA retains for computation of data. O'Bannon's lawyers attempted to undermine the NCAA's data by asserting that the NCAA does not verify -- or even fully understand -- the financial numbers it shares with the public.

The O'Bannon attorneys' second argument was to question why the NCAA excludes "institutional subsidies" from its revenue calculations. These subsidies usually refer to universities transferring general budget money into their athletic programs and student service athletic fees. Exclusion of institutional subsidies from revenue is a major exclusion.

Banowsky testified that Conference USA schools fund their athletic programs mainly through those subsidies, in some cases 75 percent of funding. To question the NCAA's exclusion of institutional subsidies, O'Bannon's lawyers introduced as evidence a letter the NCAA wrote to the Ways and Means Committee of the U.S. House of Representatives in 2003. In that letter, the NCAA did not exclude institutional subsidies from calculation of revenue. The letter also indicated that 92 DI athletic programs either broke even or were profitable. Yet in the O'Bannon case, O'Bannon's lawyers stressed, the NCAA has removed institutional subsidies from revenue. O'Bannon's lawyers hope that U.S. District Judge Claudia Wilken will find the NCAA's change of calculation to be suggestive of manipulation.

NCAA: Student athletes view themselves as part of the academic environment

Throughout the trial, the NCAA has pledged that athletics and academics are inextricably intertwined. In today's hearing the NCAA focused on how the vast majority of student-athletes view themselves as part of the university experience. According to recent NCAA survey data, 87 percent of men's basketball and 77 percent of football players agreed with the statement, "I see myself as part of the campus community." Virtually the same percent of student-athletes on basketball and football teams agreed with the statement, "I have a sense of belonging to this campus." These surveys may sound hokey, but are actually quite important: the NCAA's legal case is strengthened if men's basketball and football players are members of the same academic community as their classmates.

For similar reasons, the NCAA hoped to gain traction by data on rising graduation rates. Petr presented a number of findings, including that the graduation rate for FBS schools rose from 63 percent in 1995 to 71 percent in 2006 and that African-American student-athletes, in particular, have graduated at higher rates. He also asserted that the NCAA has evolved to meet changes in academic requirements at schools. Again, the focus was on linking the NCAA to academic integrity as it bolsters the NCAA's legal contention that amateurism rules are essential.

Banowsky: Student-athletes negotiating could lead to a "horrible place"

Toward the end of today's hearing, NCAA attorneys hypothesized a potential future world where O'Bannon has won the trial and student-athletes can freely negotiate their name, image and likeness. Banowsky expressed serious concern about such a world. He feared that a "corrupting influence of money" would materialize and dominate college sports. He spoke of student-athletes and prospective student-athletes potentially represented by passionate but unscrupulous boosters and how this could give rise to a "horrible place."

These boosters, Banowsky worried, could prove "exploitative" of 18 and 19-year olds, especially without restriction on their contractual arrangements with student-athletes and their families.

As an example of the type of nefarious conduct that might proliferate in a world where O'Bannon wins, Banowsky referenced the Nevin Shapiro controversy at the University of Miami. Shapiro, who is currently imprisoned for his role in a Ponzi scheme, was a wealthy Hurricanes booster that purportedly provided various benefits to Miami players. Those "benefits" included cash and access to prostitutes, among other items and services that were clearly in contravention of NCAA rules and in some cases the law. For NCAA attorneys, Banowsky's reference to Shapiro may have caused some discomfort. The NCAA received sharp criticism last year over paying Shapiro's attorney in order to obtain documents used to punish Miami. Still, Banowsky's testimony could help the NCAA establish that
O'Bannon's proposed injunction might damage the integration of academics and athletics.
Keep in mind, it is expected that if O'Bannon wins, most if not all DI men's basketball and football players would negotiate their name, image and likeness through a trade
association, rather than individually. This collective arrangement would presumably diminish or even eliminate any possible "corrupting" influence of crooked boosters, opportunistic sports agents and other third parties. However, in fairness to Banowsky, there would likely be nothing that bars an individual athlete from entering into a negotiation contract with a booster or agent.

Banowsky also stressed that if O'Bannon wins, "teams with the best players would win more consistently than they do now." Competitive balance is core part of the NCAA's antitrust defense. According to the NCAA, amateurism rules prevent college sports from waging a spending war that would advantage a relatively small number of schools and conferences but also make sports too expensive for many schools. In the absence of these rules, a small number of teams would dominate whereas many colleges would downsize or outright eliminate sports. Banowsky went so far as to say football programs could be cut at Conference USA schools if student-athletes could negotiate their name, image and likeness.
O'Bannon's attorneys rejected Banowsky's conclusions. They emphasized that Banowsky bases his concerns not on any data, but rather personal beliefs and internal reasoning. Banowsky was also asked to explain why colleges continue to seek joining Division I if doing so would cause them to lose money. Banowsky explained their desire as varied, but often based on uniting a university and bringing alums back to campus. Banowsky, in other words, returned to the NCAA's contention that athletics and academics run together.

NCAA may have found one possible ground to appeal

If Judge Wilken issues an injunction against NCAA amateurism rules, the NCAA will surely appeal the order to the U.S. Court of Appeals for the Ninth Circuit. In an appeal, the NCAA could not merely argue that Wilken "got it wrong." The NCAA must instead assert that Wilken made specific mistakes. A classic ground for an appeal is when a trial judge prevents the defendant from raising evidence, or bars the defendant from obtaining witness testimony, and the defendant insists the judge's denial was both erronenous and materially harmful to the case.

In today's hearing, an attorney for the NCAA tried to ask Banowsky about his experience negotiating media rights contracts with television broadcast companies. The attorney hoped that Banowsky would express that broadcast companies never mentioned name, image and likeness rights for student-athletes in negotiations. Such a statement would have advanced the NCAA's legal argument that name, images and likenesses are not distinct from the broadcast of college games. But before Banowsky could answer, O'Bannon attorney Seth Rosenthal objected, saying the topic was beyond the scope of the allowable topics for Banowsky's testimony. Wilken agreed and sustained the motion, reasoning that she previously excluded the issue of media rights negotiation from Banowksy's testimony. Further protests by NCAA attorneys that Wilken misinterpreted her previous ruling were to no avail.

In any appeal by the NCAA, expect them to argue that Wilken prevented NCAA attorneys from waging an effective defense. Today's exchange is one possible example the NCAA would cite in an appeal.



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What do surveys really mean when the public says it doesn't want college athletes to be paid? That was the focus of Wednesday's early testimony at the Ed O'Bannon trial as the NCAA presented an expert's survey that the plaintiffs complained didn't ask the right questions.

At stake over how U.S. District Judge Claudia Wilken views the survey: Are the results used by NCAA economic expert Daniel Rubinfeld legitimate in his consumer market arguments as they relate to antitrust law? Rubinfeld will testify this week and is one of the NCAA's key witnesses in the lawsuit over whether football and men's basketball players should be paid for use of their names, images and likenesses, otherwise known as NILs.

[xtable=300x@]
{tbody}
{tr}
{td=colspan:2}SURVEY QUESTION{/td}
{/tr}
{tr}
{td=colspan:2}There has been some discussion of paying money to college football and basketball student-athletes in addition to providing scholarships that cover college expenses. Some people are in favor of paying money to student-athletes who are on college football or men's basketball teams. Some people are opposed to paying these student-athletes. Which of these statements comes closest to your opinion?{/td}
{/tr}
{tr}
{td}31%{/td}
{td}I am in favor of paying money to student-athletes on college football and men's basketball teams in addition to covering their college expenses{/td}
{/tr}
{tr}
{td}69%{/td}
{td}I am opposed to paying money to student-athletes on college football and men's basketball teams in addition to covering their college expenses.{/td}
{/tr}
{/tbody}
[/xtable]

NCAA survey expert John Dennis presented a number of findings from his October 2013 survey:

• 69 percent of the public and 61 percent of sports fans oppose paying college athletes.
• 38 percent of respondents are less likely to watch or attend games if athletes are paid $20,000; 47 percent if athletes are paid $50,000; and 53 percent if athletes are paid $200,000. The fact that four out of 10 people are less likely to watch or attend college games is potentially "a huge loss of market share," Dennis testified.
• 53 percent of the public and 62 percent of sports are less likely to watch or attend games if star players are paid more than non-stars.

The O'Bannon plaintiffs pressed Dennis hard on why he phrased the questions with words such as "paying money" to players, instead of identifying specific issues related to the trial, such as athletes' NILs and the idea of deferred compensation after players graduate. NILs refer to the right of an individual to control the commercial use of his or her identity.

Dennis said he didn't think NIL questions needed to be asked and that respondents could interpret his pay questions however they wanted. Also, Dennis said NIL-related questions could be "very complicated" with legal jargon that would be difficult for survey respondents to understand.

O'Bannon survey expert Hal Poret acknowledged the difficulties of NIL survey questions, but said the complexity of the issue is why those questions should be asked. Poret gave examples of questions that could have been asked, such as whether people favor or oppose players being paid from use of their NILs from video games, jerseys and TV broadcasts.

In one open-ended question near the start of Dennis' survey, the plaintiffs' lawyers showed that only 14 of the 2,455 respondents specifically said they heard of NILs as the concept relates to paying players. Because no distinctions were drawn in the questions over what paying players means, Poret said Rubinfeld shouldn't have used the survey and implied the answers relate to paying players for use of their NILs.

The plaintiffs also argued that Dennis' survey implies that the questions refer to illicit or illegitimate payments to players. More than 200 respondents indicated they thought of the issue that way.

Dennis said his survey results were consistent with others by the Gallup Poll and media outlets over the past decade. Dennis said adding more information to the questions would not have substantially changed the rules because so much of the public opposes players being paid.

At one point, NCAA attorney Carolyn Hoecker Luedtke tried to introduce a survey from AL.com, an Alabama-based news website, from last week that asked readers whether they would lose interest if college football players were compensated. Luedtke asked Poret if that was the type of question he would use in relation to NILs.

"No, that's an embarrassing, junk science question," Poret responded with disdain.

Wilken soon shut down the AL.com portion of the questions without the online results being shown. The trial took a rare afternoon break due to Wilken's schedule and resumes Wednesday afternoon with NCAA economic expert Lauren Stiorh on the stand.

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Why doesn't the NAIA try to compete for NCAA players by paying them? That was the crux of one argument by an NCAA expert who said Wednesday the Ed O'Bannon plaintiffs have not proven they are harmed by NCAA rules preventing them from being paid.

NCAA economic expert Lauren Stiroh testified that if, as the plaintiffs allege, college athletes are meaningfully restricted under antitrust law from being paid for their names, images and likenesses, universities outside the NCAA would be attempting to “fill in the gap” by paying players.

“So some rival NCAA would try to round up other schools not in the NCAA?” U.S. District Judge Claudia Wilken asked, sounding skeptical.

Stiroh explained that numerous college athletic associations could pay players, starting with the National Association of Intercollegiate Athletics (NAIA). Since O'Bannon economic expert Roger Noll previously said the NCAA doesn't compete with these associations, the market should correct itself if there's an NCAA restriction based on antitrust analysis, Stiroh said.

The early portion of Day 13 of the O'Bannon trial focused on consumer surveys. The afternoon hit on the complicated and difficult world of antitrust analysis. As evidenced by Wilken's repeated questions during Stiroh's testimony, which will resume Thursday, that's the area where the case ultimately figures to be decided.

The O'Bannon plaintiffs have alleged the NCAA's rules against being paid hurts two markets: the “college education” market, in which schools compete to recruit the best players; and the “group licensing market,” in which broadcasters and video game developers compete for group licenses to use names, images and likenesses of players.
Stiroh said the NCAA rules don't restrict the education market because, for instance, there are no allegations of too few players or too few games. Stiroh agreed there's an alleged harmed market for use of athletes' names, images and likenesses (NILs), but believes the plaintiffs haven't proven the harm.

According to Stiroh, for there to be an antitrust issue there has to be an affect on the market that eventually impacts consumers. For instance, Stiroh said the plaintiffs haven't examined what happens to the price and output in the video-game market by withholding college athletes' names. In other words, Stiroh said, EA could make other video games unrelated to college sports.

Wilken remarked that would be a market for video games of college football and basketball players that can't be filled by dancers.

Stiroh said professional sports agreements show broadcast payments are used for athletes' salaries for playing in games, not NIL transactions. The plaintiffs are trying to get a share of TV revenue moving forward. Jerseys being sold with player numbers is a royalties or intellectual property dispute, not an antitrust issue, she said.

O'Bannon attorney Bill Isaacson pressed Stiroh on her reasoning that other college athletic associations could pay players.

He showed some rules in the National Christian Athletic Association, which is one of the alternatives listed in Stiroh's expert report. Among the rules for that association: coaches and players can't use profanity or abusive language, and schools must sign and comply with a statement of religious faith. The unspoken message by the plaintiffs: NCAA players aren't going to want to play in an association with less resources and rules such as those.
“Did you even investigate any of these rules, doctor?” Isaacson asked. Stiroh said she had reviewed some of them, not all.

Grand View University in Iowa, the NAIA football champion last season, reported athletic department revenue of $6.3 million in 2012-13. Florida State, the national champion in major college football, listed its revenue at $89.1 million.

NCAA chief legal officer Donald Remy said it's not a question of whether the NAIA or others have the finances to be competitive. Rather, Remy said, Stiroh's point is that within the context of antitrust analysis, other organizations that don't have the NCAA's alleged restraints could compete in that space by paying players. Remy cited as an example the USFL's entry into professional football to compete with the NFL.

“There's no restraint on the rest of the world from developing the product that the plaintiffs' lawyers want and competing against the collegiate model of athletics that the NCAA has had for 100 years, and say ours is better,” Remy said.

After Stiroh's testimony ends, the NCAA has two more witnesses to call before the trial ends Friday: economic expert Daniel Rubinfeld and NCAA executive vice president for championships and alliances Mark Lewis

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