Commentary

Challenges for change in the NCAA

Three separate lawsuits just might break down its long resistance to reform

Originally Published: December 2, 2011
By Lester Munson | ESPN.com

As with most train wrecks, it's hard to turn away from the pile-ups across college sports these days. That's especially true when the vantage point is from our Courtside Seat. Yes, there are plenty of legal problems in other places that demand our attention, too; but for now, let's just focus on a handful of looming court battles that might recast the games being played at dear old alma maters throughout the land. Maybe something good will come from them, and wouldn't that be something? So today, we start (and finish) with …

The shapes of things to come

Could the NCAA be teetering on the edge of reform?

With an operating budget of nearly $800 million and more than five acres of office space at its headquarters in Indianapolis, the NCAA is a colossus in which change has been difficult. Neither public disgust over multiple scandals nor threats of action in Congress has done much to move it away from its longstanding principles and positions.

But now, it's possible that a growing mass of litigation just might do to Big College Sports what a critical mass of litigation did to Big Tobacco.

[+] EnlargeNCAA Headquarters
AP Photo/Michael ConroyThe NCAA moved its headquarters from Overland Park, Kan., to these offices in Indianapolis in 1999, but it hasn't budged much on anything else.

The organization is facing three major lawsuits, and they could lead to a disclosure of enormous NCAA income, a new structure for athletic scholarships that includes payments to players, a new system for preventing and treating concussions, and more. Despite massive and expensive resistance from NCAA officials and their growing cadre of $500-per-hour, big-firm lawyers, the pressure from these lawsuits and others that are sure to follow might lead to the same kind of settlement discussions and court decisions that transformed the tobacco industry in the late 20th century.

If change is to come through litigation, it will not be quick and it will not be easy. Already in these three cases -- each of which is in the early stages of the litigation process -- the NCAA and its legal team have demonstrated their willingness to try to wear down the athletes and their attorneys with legalistic attacks and endless resistance to document exchanges and pre-trial depositions that are routine in most litigation.

Even the seemingly simple matter of obtaining testimony from NCAA leaders becomes a major issue in these cases. Asked for a routine pre-trial deposition (taking testimony under oath on the issues of the case) of the organization's current president, Mark Emmert, the NCAA's lawyers are resisting.

They are demanding in court papers that Emmert's deposition come only after they take the depositions of the athletes suing the NCAA. And that's just the beginning of their efforts to delay the pre-trial processes. The NCAA lawyers, according to court papers, also made "a total of approximately two thousand document requests" of the former athletes and served subpoenas on 20 of their associates.

And even that was not enough. In a written, sworn statement of their intentions, one NCAA lawyer told the court that he intended to serve subpoenas on the athletes' "parents and grandparents."

[+] EnlargeOscar Robertson
AP PhotoThis is what Oscar Robertson looked like at the University of Cincinnati in 1959. He isn't receiving any money from licensed images of his time there.

The word that describes these legal tactics is "dilatory." It's a word that lawyers toss around with some frequency when they cannot think of anything else to say about their opponents. It describes deliberate intentions to delay. For the NCAA lawyers, however, it appears to be a method of operation and a protocol. They seem to think they can grind the athletes and their attorneys into submission.

The problem for the NCAA attorneys using these dilatory tactics is that they are trying to grind down people such as Bill Russell and Oscar Robertson, two of a growing group of former collegiate stars who are leading the lawsuit that has made the most progress. It is known as the Ed O'Bannon class action lawsuit because O'Bannon, the star of UCLA's 1995 national championship basketball team and the winner of the John Wooden Award that year, has been in the forefront of the litigation since it was first filed.

These athletes are demanding their share of what has become a major profit center for the NCAA: the sale of video games, DVDs, trading cards, game films and other products that feature the heroics of the athletes during their college years. The NCAA resists efforts from the outside to obtain information about its revenues from these products, but numerous experts have concluded that the college licensing business takes in $4.5 billion annually.

The O'Bannon-Russell-Robertson group and its lawyers are in the process of digging deep into NCAA financial records to determine the size of what appears to be a small industry. They will then demand their share of the proceeds, arguing that the NCAA's right to use their likenesses and their exploits expired when they played their last college game.

Robertson, the only NBA player ever to average a triple-double (30.8 points, 12.5 rebounds and 11.4 assists per game for the Cincinnati Royals in the 1961-62 season), is featured on a "Legends" trading card and, like all other former college stars on these products, receives nothing for it. Some of the cards even include pieces of the uniforms Robertson wore when he starred at the University of Cincinnati from 1957-60. The profits from the Robertson card, like the profits from all other products featuring college players, go to the NCAA and to the player's university.

[+] EnlargeBill Russell
AP PhotoBill Russell, shown here at the University of San Francisco in 1956, has joined the legal fight to profit from the licensing of his images.

Assisting the former players in their quest for information about the NCAA's profits from these products is Sonny Vaccaro, 71, the notorious former shoe peddler who essentially invented "Air Jordan" for Nike and scored mammoth contracts with numerous universities for Nike, adidas and Reebok before he awakened to the monster he had built and now seeks to instill some measure of reform in college sports. Vacccaro's extensive knowledge of the budgets and the financial operations of college football and basketball programs will be a formidable weapon as the athletes' lawyers try to drill through the barriers built around access to the NCAA's finances.

When the NCAA lawyers' top-of-the-line stalling maneuvers finally come to an end, the organization will then respond to player demands for compensation with cries of "amateurism," and rely on their professed idea of the "student-athlete." The NCAA pleas will come in the form of what are known as "affirmative defenses," legal papers that are part of a response to a lawsuit. They will say that paying the athletes whose images and heroics produce large profits would commercialize college sports. Then they will say that must not happen.

Can you imagine? Commercializing college sports? Where to start? There is the estimated $4.5 billion in annual licensing revenue. There is the $2.25 billion, 15-year deal between the SEC and ESPN for broadcasts of football, men's and women's basketball, Olympic sports and SEC championships. There is the $2.8 billion projected in revenue during the next 25 years for the Big Ten Network. And there is the new Pac-12 television deal that is expected to produce $3 billion over the next 12 years.

Perhaps a more pertinent issue is whether it is possible that college sports could be any more commercialized than they already are.

In addition to the commercialization defense, the NCAA claims in court papers that the players had no rights in their own athletic accomplishment and, if they ever did have those rights, they signed them away.

It isn't easy to say that (A) the athletes had no rights; and then (B) they signed away their rights. (Tough to do B if A is true, right?) That, however, is the argument that the NCAA's lawyers are trying to sell in well-written and handsomely presented legal briefs.

[+] EnlargeEd O'Bannon
AP Photo/Isaac BrekkenFormer UCLA star Ed O'Bannon has lent his name to the lawsuit challenging the NCAA's licensing practices.

If none of these arguments succeed in stopping the athletes from collecting a share of licensing profits, then there is this total denial of everything by Erik Christianson, a spokesman for the NCAA: "The NCAA does not license student-athlete likenesses or prevent former student-athletes from attempting to do so. Likewise, to claim the NCAA profits from student-athlete likenesses is pure fiction."

No profits? Pure fiction? We'll see. The official licensing representative of the NCAA is the Collegiate Licensing Co. (CLC), a division of IMG. Like all of IMG, it is in business to make money, and its website states that the market for collegiate licensed merchandise is more than $4 billion annually.

The U.S. Department of Justice has now joined the O'Bannon group in its inquiry into CLC, its contracts with NCAA institutions, and their royalty rates.

While the O'Bannon group fights through legal obstacles to discovery of NCAA finances and profits, other groups of former college stars are attacking the organization's rules on athletic scholarships and demanding action from the NCAA on concussions.

In a class action led by former Rice football player Joseph Agnew, a group of athletes is challenging NCAA rules that can lead to the terminations of scholarships before the athletes can graduate.

An NCAA-imposed one-year limit on scholarships allows coaches to discard student-athletes who are injured, the lawsuit asserts, and replace them with more promising prospects. Relying on antitrust laws that prevent monopolies and cartels from using their powers to exploit consumers (in this case, students), the Agnew group wants new rules and triple the amount of scholarship money its members lost.

The NCAA's first response to the Agnew litigation was to insist that the suit be transferred from federal court in San Francisco to Indianapolis, the home court for the NCAA. And, sure enough, federal district judge Jane Magnus-Stinson in Indianapolis dismissed the case, forcing the Agnew group to appeal her decision to a higher court in Chicago.

[+] EnlargeJoseph Agnew
AP Photo/Matt SlocumJoseph Agnew (No. 25) played in the 2005 Texas state championship game. He is suing the NCAA over its one-year scholarship system after his college career at Rice was ended by injury.

As the judge in Indianapolis was ruling, however, Emmert, the NCAA president, indicated that he is interested in changing the rules that the Agnew group attacked. Was Emmert responding to the lawsuit? Was he responding to the recent scandals? Was he responding to the monumental Taylor Branch article in "The Atlantic" describing "The Shame of College Sports?" It might have been a bit of all three, but it was clearly an encouraging development.

In the third major case now pending against the NCAA, three football players and a soccer player contend that the NCAA has failed to set standards for awareness, diagnosis, and treatment of concussions. The class action lawsuit, filed in federal court in Chicago, comes in the wake of NFL actions on concussions and committee hearings on the issue in the U.S. House of Representatives.

In a creative twist to the typical courthouse demand for money damages, the concussion group wants the NCAA to establish a trust fund and a monitoring program that will provide treatment for them and other concussion victims as they continue to suffer after their college years.

They cite a series of NCAA-financed studies into the problems of concussions and returning to competition too early after a concussion, and assert that the NCAA has ignored its own research in failing to set appropriate standards for concussion treatment. In a New York Times article this week, the four athletes describe the ordeals they have endured since they suffered their injuries.

Responding to the lawsuit, which is in its early stages, Donald Remy, executive vice president and general counsel of the NCAA, said in a statement that the suit's claims are "misguided and off base." Remy references a "long history of action" on concussions and promises that the NCAA "will not let this litigation serve as a distraction to our commitment to student-athlete safety in all sports."

There will be much more to come in the concussion litigation, as well as in the two other class action lawsuits. And there will be more lawsuits. The NCAA is clearly the flavor of the month among class action lawyers. One target of possible new litigation is the NCAA's decades-long refusal to consider workers' compensation protection (payment for medical bills and disabilities) for injured student-athletes.

It will take a while; but as the lawsuits multiply and progress through the courts, they may reach the point of critical mass that forces the NCAA, like Big Tobacco, to consider major changes. That might seem unlikely to some, but remember: Reform in the tobacco industry seemed unlikely in the early stages of that litigation, too.

Instead of teetering and then falling into an abyss of court decisions, injunctions, and money damages, the NCAA might want to step back and consider the positive possibilities in transformation.

Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.

MORE COMMENTARY