O'Bannon v. NCAA Suit Could Be a Game Changer in College Athletics

NEW YORK (TheStreet) -- The landscape and future of big-time collegiate athletics continues to be played out in an Oakland courtroom where former UCLA Bruin basketball star Ed O'Bannon took the stand Monday on the first day of the class-action antitrust lawsuit he brought on behalf of former players against the NCAA in 2009.

The suit charges the NCAA has been profiting from the names and images of its players in its television broadcasts as well as other commercial purposes while unlawfully restricting the players' ability to do the same. The outcome will have a major impact on the business of pro and college sports.

While past players stand to be compensated if the NCAA loses this case, the decision will have an impact on future players in Division 1 basketball and Football Bowl Subdivision (FBS) programs and their ability to claim a piece of the bountiful pie that comes from fat television deals the NCAA makes.

March Madness, one of the most popular events on the sports calendar, is aired by CBS (CBS) and Time Warner's (TWXTurner Networks under a decidedly non-amateur $10.8 billion agreement that stretches to 2024.

It was announced at the beginning of the trial that the NCAA had settled a related case brought by former Arizona State quarterback Sam Keller involving the likeness of players in video games. The NCAA agreed to pay $20 million ($4,000 per player approx.) to certain players whose photos were used for avatars in video games produced by Electronic Arts (EA) and Collegiate Licensing Company, which is owned as a subdivision by IMG Worldwide, a private company.

While the Keller settlement is in no way connected to the O'Bannon case, the case narrows the scope strictly to the television issue, according to NCAA attorney Glenn Pomerantz. Pomerantz looked to draw U.S. District Judge Claudia Wilken's attention just after the settlement was announced.

"This will allow us now to focus on the issues of live broadcasts and rebroadcasts," he said in the courtroom.

Judge Wilken listened as O'Bannon took the stand and said he'd spend as many as 40 to 45 hours a week during his time at UCLA from 1991-1995 focused on basketball and less than a quarter of that time on his studies.

"I was an athlete masquerading as a student," O'Bannon said. "I was there strictly to play basketball. I did basically the minimum to make sure I kept my eligibility academically so I could continue to play."

After leaving UCLA without graduating, O?Bannon played two seasons in the National Basketball Association with the New Jersey Nets and Dallas Mavericks before spending seven seasons playing professionally in Europe. He currently lives in Nevada and works at a local car dealership.

Stanford economics professor Richard Noll also testified on the first day on behalf of the plaintiffs to illustrate the antitrust violations and financial growth of college athletics.

"Since NCAA rules prohibit payment to players, the money flows to lavish coach salaries, etc. It's called 'inefficient substitution,'" he said from the stand.

Noll, who will continue testifying today, said head football coaching salaries have increased over 500% and schools spend large sums of money on facilities in order to attract student athletes -- but the schools should just give the money directly to the players.

The case is just one in a series of cases that will have a hand in shaping the business of pro and college sports in the years to come. The football team at Northwestern University is currently waiting on approval from the National Labor Relations Board after it became the first team to vote to unionize in collegiate history last April.

Major League Baseball is preparing for a trial that challenges the nature of its television deals and the internet blackout of local teams that Comcast (CMCSA) and Direct TV (DTVclaim is collusion that forces fans to subscribe in order to watch their local teams.

Meanwhile, over in the National Football League, another class-action suit is working its way through the courts as hundreds of players are looking to hold the NFL accountable for knowing about the effects of head trauma but keeping that information from the players while continuing to allow them to play, even sending them out in the field numbed with painkillers.

At the time of publication the author had no position in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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