NCAA gets a nod in O'Bannon trial
Judge turns on NCAA, then asks questions that could lead it to court victory
OAKLAND, Calif. -- It started out as a bad moment on Wednesday morning for the NCAA lawyers who are defending the organization against the antitrust lawsuit brought by Ed O'Bannon.
One of the lawyers, Rohit Singla, was well into the fifth hour of a cross examination of Stanford economist Roger Noll that began on Tuesday, and U.S. District Judge Claudia Wilken was not happy. Impatient with his methodical and repetitive questions, she told Singla to move faster on three occasions. When Singla attempted to start through a detailed history of the NCAA and the restraints that it began to put on athletes in the late 19th century, it was too much for the judge.
"You told me earlier you had two hours, and now you're into another hour," she said, clearly annoyed and demanding that he submit the history material in a written brief. After a conference with the other NCAA lawyers that lasted less than a minute, Singla told Wilken that he was finished with his cross examination even though it was clear that he had more questions to ask the players' most important witness.
As Singla sat down, Noll and his critical testimony remained untouched. A veteran of numerous courtroom battles on antitrust issues, including the historic trial in Minneapolis in 1992 that established free agency for NFL players, Noll had offered convincing evidence for O'Bannon and the other players on the three required elements of their case against the NCAA. He had shown the NCAA's monopoly powers over the college football and basketball markets, had shown how the refusal to pay players for use of their names, images and likenesses was a form of price fixing, and had shown that there was no justification for the NCAA's fixing the price of players' names, images and likenesses at zero.
If it happened anywhere but in a courtroom, the lawyers for the players would have been high-fiving when Singla suddenly abandoned his cross examination.
But then Wilken began to put questions to Noll. For the next 12 minutes, she asked him about what are known in the complicated world of antitrust law as "procompetitive benefits."
When an organization like the NCAA faces a charge of price fixing, it is limited in what it can offer in explanation. The NCAA lawyers won't admit it, but the NCAA is an obvious cartel. Again, the NCAA won't admit it, but it is equally obvious that it has fixed the price of players' names, images and likenesses at zero. Its only real chance to escape from what could be a court order at the end of this trial that would transform the organization is to show that its price-fixing actually produces a benefit.
Under antitrust law, if a monopoly can show that price-fixing is merely a technical violation that is the basis for something good, then the monopoly can continue to do what it has been doing. The good that the price fixing accomplishes is known as "procompetitive benefits."
There is a benefit, the NCAA will argue at the end of the trial, in fixing the price of the names, images and likenesses at zero. In a brief filed last week, the NCAA lawyers explained that preventing players from collecting on that or on television broadcasts "ensures that [the athletes] involvement in intercollegiate athletics is as students and not as professional." The rules, the NCAA argued in its brief, focus the athletes "on doing what students do rather than trying to make as much money as possible, which is what professionals do."
The idea, according to the NCAA, is that the names, images and likenesses rules and the other rules that prevent compensation of athletes help to "integrate athletics and education."
And that very same integration of athletics and education was the focus of Wilken's questions to Noll. Using four examples, the judge asked Noll whether any of them helped integrate the athletes into the academic program of the university and would qualify as "procompetitive benefits."
As a witness for the players, Noll fought off the judge's first three examples. He denied that college athletes would benefit from contact with other students. The judge thought integration of unpaid athletes with "theater majors might offer a procompetitive benefit." But Noll said that the athletes typically lived separate lives in separate dorms and did not integrate with other students.
When Wilken asked Noll whether money from names, images and likenesses would make the athletes into an elite group that would not integrate with other students, Noll explained that elites based on relative wealth were already a reality on college campuses. Restraining the players from collecting on their names, images and likenesses may eliminate one more elite but was not a procompetitive benefit
Integrating the basketball and football players with other athletes in other sports was next on the judge's list, but Noll said the other sports featured only partial and not full scholarships. The kind of integration the judge was suggesting did not happen, Noll said. "Field hockey players may go to football games, and football players may go to a field hockey game, but the difference is that the football players at a field hockey game would be the only people at the game," he said somewhat mysteriously.The judge did not ask him to explain.
But when Wilken asked whether the names, images and likenesses restrictions could be a factor in integrating the athletes generally with other students, Noll admitted that, yes, this could be a procompetitive benefit. A university must help its athletes as students, Noll said, and helping students is a benefit. A school must, for example, allow its athlete to pursue his major of choice and not push him into a major that fits the team's practice schedule. A payment of $100,000 to a star quarterback for his name, image and likeness would, Noll said, tend to separate him from other students.
The judge is not likely to forget that as the result of her questions, she learned that barring the payment could be a procompetitive benefit and an avenue of escape for the NCAA from the O'Bannon lawsuit.
After the trial adjourned on Wednesday, Donald Remy, the executive vice president and chief legal officer of the NCAA, said that the NCAA would offer additional evidence on the procompetitive benefit that the judge identified with her questions to Noll. In their trial brief, the NCAA lawyers promised that "numerous college and university administrators will testify based on their many decades of experience in higher education that permitting [athletes] to participate in a bidding war would undermine their ability to be effective students."
If the NCAA emerges from this trial with a victory, the turning point may have come on Tuesday at 11:24 a.m. on Wednesday when Wilken badgered the NCAA attorney into concluding his cross examination and began asking her own questions about procompetitive benefits.
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