By Alexander Mac Green – Thompson Rivers University 2L JD Student
On July 17th 2013, the National Collegiate Athletic Association (NCAA) announced they would not be renewing their licensing agreement with Electronic Arts (EA). This was a direct reaction to the class action lawsuits that have been brought against the NCAA, EA and the CLC (Collegiate Licensing Company). The allegations cited in these lawsuits are that the listed defendants have profited from using college football athletes’ likenesses and as a result have been unjustly enriched. Over the last 20 years, EA has made 21 different versions of their NCAA football videogame featuring hundreds of thousands of student athletes and making more than $1.3 billion dollars since 1998. Following the NCAA’s announcement the Big Ten, Pac 12 and SEC also announced that they would not license EA to use their trademarks until these lawsuits had been resolved.As a result, on September 26th EA had no other choice but announce that they would not be making a college football videogame for 2014 and for the foreseeable future.
The lawsuits claim that the defendants have breached these former college athletes’ property rights. Personality property rights include the right to be compensated for the profitable use of one’s own likeness. Although EA never used any of these players’ names in their videogames, they used the players’ exact characteristics: jersey numbers, heights, weights, skin tones, hair colors, and home states.EA has never compensated or received permission from any of the athletes featured in their games. They have only paid the NCAA and the CLC over this time period for the licensing rights to use their trademarks.
Shortly after EA’s announcement, they notified the US District Court of Northern California that they had reached an agreement to settle with the former players. However, EA still refuses to admit any wrongdoing on their part. They claim that they just “follow rules that are set by the NCAA.” The NCAA, for their part, has made it clear that they are not willing to compromise and are prepared to proceed with litigation.
The managing partner of Hagens Berman and the co-lead counsel of the settlement negotiations, Steve Berman, claims that anywhere from 200,000 to 300,000 former players will be “substantially” compensated by this settlement. EA Sports and the CLC plan to settle these lawsuits for $40 million dollars. It has not yet been decided how this money will be divided, but $40 million dollars divided amongst potentially 300,000 will only result in a whopping $133.33 per athlete. I am not sure if this meets Berman’s “substantial” claim but this settlement carries much more weight as a symbolic victory.
This settlement is historic because college athletes have never been compensated in this fashion before. The NCAA forbids all of their student athletes from earning money by using their names or likenesses in, for example, endorsements. However, these settlements are being awarded retroactively to former students who are no longer restricted by the NCAA rules.This settlement has potentially changed the relationship between student athletes and licensing companies drastically. Some predict that this may have opened the floodgates to retroactively compensating college athletes beyond their regular sports scholarships which ordinarily include tuition, room and board.
There are many arguments for and against college athletes getting paid. Personally, I believe college athletes are compensated fairly by their schools based on the following arguments:
1. College graduates earn $1 million dollars more in their lifetime compared to high school graduates according to census data;
2. College students without sports scholarship will pay anywhere from $100,000 to $200,000 for their education; and
3. College athletes are given the opportunity to build their brand for the future as a professional athlete or any other occupation. These athletes have access to an influential network of people, state of the art facilities, professional level coaching, higher level competition, media training and fan building opportunities, all of which could enrich these athletes lives even if they do not go pro.
It is, however, easy to feel sympathetic for college athletes who don’t make it to the NFL especially if the reason is due to injuries suffered during their college career. These athletes could have been compensated for their high level of athletic ability prior to their injury.Time Magazine recently wrote an article claiming that there is an “ethical imperative” to college athletes being compensated for the millions of dollars that they help generate for their colleges and other beneficiaries.
The monetary value of this settlement should not belittle its historic impact on the future of college sports.