Jeffrey Kessler files against NCAA
In the most direct challenge yet to the NCAA's longstanding economic model, high-profile sports labor attorney Jeffrey Kessler filed an antitrust claim Monday in a New Jersey federal court on behalf of a group of college basketball and football players, arguing the association has unlawfully capped player compensation at the value of an athletic scholarship.
"The main objective is to strike down permanently the restrictions that prevent athletes in Division I basketball and the top tier of college football from being fairly compensated for the billions of dollars in revenues that they help generate," Kessler told ESPN. "In no other business -- and college sports is big business -- would it ever be suggested that the people who are providing the essential services work for free. Only in big-time college sports is that line drawn."
The lawsuit names the NCAA and the five largest conferences (the Southeastern, Big Ten, Pacific-12, Atlantic Coast and Big 12) as defendants and effectively asks for an end to NCAA-style amateurism. The players listed as plaintiffs include Clemson defensive back Martin Jenkins, Rutgers basketball player J.J. Moore, UTEP tight end Kevin Perry and Cal tight end Bill Tyndall, though the claim is a class action and proposes to represent all scholarship players in FBS football and Division I basketball. Jenkins is a junior, while the other three are seniors who recently completed their NCAA eligibility.
The move comes on the heels of a similar, if less aggressive, claim filed earlier this month by a Seattle firm on behalf of former West Virginia running back Shawne Alston. In that suit, which does not include current players, the same defendants that Kessler's group is targeting are asked to pay damages for the difference in the value of an athletic scholarship and the full cost of attendance -- an amount equivalent to several thousand dollars annually.
By contrast, the Kessler suit dispenses with the cost-of-attendance argument and does not ask for damages as a group. It simply states that no cap is legal in a free market and asks the judge to issue an injunction against the NCAA ending the practice. It contends that NCAA member universities are acting as a cartel by fixing the prices paid to athletes, who presumably would receive offers well in excess of tuition, room, board and books if not restricted by NCAA rules.
"We're looking to change the system. That's the main goal," Kessler said. "We want the market for players to emerge."
Antitrust Claim Filed Against NCAA
Jeffrey Kessler is claiming that the NCAA is fixing the prices paid for athletes. With his lawsuit, he wants a market for players to emerge. PDF
An NCAA spokeswoman declined comment. But in other public and legal venues, officials of the governing body have contended that the agreed-upon financial constraint is necessary to preserve its notion of amateurism, which the officials argue is significantly tied to the educational mission of universities and the commercial success of college sports.
Kessler said he disagrees with that contention.
"Do fans care that the coaches on these teams are making millions of dollars?" he said. "Do fans care that these programs [collectively] are generating billions of dollars in revenue? I don't think it will be an issue for fans if some reasonable, fair portion of the revenue goes to the athletes, many of whom never graduate or most of whom never have a pro career but along the way contribute to the revenue pie of college sports."
The suit highlights the willingness of players to challenge the once-feared NCAA. In February, senior quarterback Kain Colter led the launch of a union movement at Northwestern, asking the National Labor Relations Board to declare them employees of the college. While his eligibility has expired, many of his teammates who signed on will return next season. Before the Northwestern move, players at Arizona and other universities joined a suit challenging the NCAA on its licensing of their names and images without compensation.
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Yet for the embattled NCAA, the most significant aspect of the new lawsuit may be the entry of Kessler, a litigator with a history of victories against sports leagues reaching to the 1970s. Kessler helped bring free agency to the NFL, winning a key jury verdict for the NFL Players Association in 1992. He remains outside counsel to the NFLPA and the NBA's player union, has taken on Major League Baseball and represented star athletes including Michael Jordan and Tom Brady. For municipal authorities, he forced the Raiders to honor their stadium lease and stay in Oakland.
Kessler also has a former NCAA insider riding shotgun in this effort: Tim Nevius, previously one of the organization's top investigators of rules violations and now co-chair of the college sports practice at their New York-based law firm. As an associate director of enforcement, Nevius worked on some of the NCAA's most high-profile investigations, including that of Ohio State football, whose former coach, Jim Tressel, lost his job after admitting to Nevius he had broken NCAA rules related to his knowledge of the sale of memorabilia by players.
In October, Kessler's group announced its intention to begin pursuing lawsuits on behalf of college players with a focus on compensation related to the $16 billion in television contacts. That move came less than a week after the announcement of a proposed settlement in the Ed O'Bannon antitrust lawsuit -- the one the Arizona players had joined -- in which Electronic Arts and the Collegiate Licensing Company agreed to pay $40 million to be removed from the claim. The settlement left the NCAA as the lone remaining defendant, with NCAA chief legal officer Donald Remy vowing to take its argument to the Supreme Court if necessary.
In the O'Bannon lawsuit, current and former players allege that the NCAA and its member schools sold their images and likenesses to media companies in violation of antitrust laws. The federal judge presiding over the case has ruled that players as a group cannot receive damages for past wrongs but can challenge the NCAA's ban on them receiving a share of video game, media and licensing revenues. A trial is scheduled for June 9, five years after the suit was filed.
On Friday, the judge in the Alston case asked the judge in the O'Bannon case to review whether the two actions should be bundled together, as both address the compensation of players.
The lawsuit Kessler filed is broader in scope. It makes no claim on specific revenues, only that athletes should be treated like other students, who are not subject to educational or financial compensation caps by agreement among universities. High-value students in areas like physics receive whatever the market will bear, in some cases a full scholarship plus cash.
Ramogi Huma, a former UCLA linebacker and central figure in several recent actions against the NCAA, told ESPN's "Outside the Lines" he advised Kessler as the lawsuit was being assembled. Huma is both president of the National College Players Association, a longtime advocacy group, and the College Athletes Players Association, a newly created entity that submitted the union cards to the NLRB on behalf of Northwestern players.
"The players couldn't have secured better representation than Jeff Kessler," Huma said. "The NCPA endorsed this lawsuit in large part because Jeff is the lawyer and he's focusing on injunctive relief."
Huma was involved in a lawsuit several years ago that began to chip away at the NCAA's unquestioned control over player compensation. White v. NCAA asked a federal court to allow schools to cover the cost of attendance and scored a major victory when the judge certified the players as a class, raising the prospect of trebled damages if they prevailed at trial.
Lawyers settled the case, to the regret of Huma, who felt more progress could have been made if legal fees had not piled up. The NCAA agreed to make more funds available to athletes to cover miscellaneous expenses but did not commit to allowing cost of attendance, much less changing its compensation model.
Since then, NCAA president Mark Emmert and major-conference commissioners have expressed a desire to push the value of scholarships up to the cost of attendance but so far have been rebuffed by colleges with lesser resources. Emmert has said that any payment beyond that amount is not a move his constituents would ever support, and he has expressed his commitment to preserving a ban on outside athletics-related income as well.
Kessler said he is confident the courts will strip the NCAA of its ability to retain those controls, given the media revenues flowing into college sports. In 2010, CBS and Turner Sports agreed to a 14-year contract to televise the men's NCAA tournament worth $11 billion, a 41 percent bump. ESPN paid $5.64 billion over 12 years to create the College Football Playoff, which will be introduced with the 2014 season.
"I can't say enough about the courageous players standing up for the rights of current and future college athletes," Huma said. "America is a capitalist nation with laws to protect the free market. We've fought wars and lost soldiers to defend our economic system. The NCAA's cap on players' compensation is both un-American and illegal."
It's hard to predict how college sports might be affected if players are granted the equivalent of free agency, Kessler said. But he warned against assuming the worst and expressed confidence that if his players win their challenge, college sports will emerge in a better place.
"This will end up saving college sports," he said. "It will end up with fair treatment for athletes and a more sustainable, attractive product and system that everyone can get behind, just like in football, basketball, baseball and hockey at the pro level. The owners in the 1970s said free agency and competition for players would destroy those sports. All you have to do is look at those sports today -- just the opposite has happened."
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