Tuesday, January 10, 2012

Things to Watch for in 2012: O’Bannon v. NCAA

Here at Law of the Game, both Mark and myself are big college sports fans, particularly of the burnt orange and white. (Hook ‘em!) For those of you out there with similar obsessions, you have probably played one of EA’s NCAA Sports games and enjoyed coaching your alma mater to (imaginary) glory. You might have used one of the classic teams and enjoyed the golden years of Michael Vick at Virginia Tech, or Julius Erving at the University of Massachusetts. But does the fact that these games do not use player names mean they have the right to make similar characters without paying royalties?

That is the fundamental question asked by UCLA basketball great Ed O’Bannon in his lawsuit against the NCAA. The original filing was back in 2009, and multiple plaintiffs have joined since. They argue the NCAA’s behavior amounts to unlicensed use of their image and likeness. Taylor Branch highlighted the dispute in October. The Atlantic published his exhaustive and powerful article The Shame of College Sports, and some quotes from O’Bannon get to the heart of the issue:

“Once you leave your university,” says O’Bannon, who won the John Wooden Award for player of the year in 1995 on UCLA’s national-championship basketball team, “one would think your likeness belongs to you.” The NCAA and UCLA continue to collect money from the sales of videos of him playing. But by NCAA rules, O’Bannon, who today works at a Toyota dealership near Las Vegas, alleges he is still not allowed to share the revenue the NCAA generates from his own image as a college athlete.

Branch also spent time with Michael D. Hausfield of Hausfield, LLP to get a better grasp of the plaintiffs’ argument. (Also from The Shame of College Sports):

“Let’s start with the basic question,” he said, noting that the NCAA claims that student-athletes have no property rights in their own athletic accomplishments. Yet, in order to be eligible to play, college athletes have to waive their rights to proceeds from any sales based on their athletic performance. “What right is it that they’re waiving?” Hausfeld asked. “You can’t waive something you don’t have. So they had a right that they gave up in consideration to the principle of amateurism, if there be such.”

These rights are lucrative. EA Sports paid $35 million last year to the NFL Players Union to compensate players who appear in their enormously popular Madden and NFL Street franchises. Former collegiate players haven’t seen any money to date. A ruling against the NCAA could mean big changes for the way these games are developed and financed going forward.

The plaintiffs in O’Bannon v. NCAA are seeking an injunction against further use, damages, and an accounting for profits made by the NCAA from the licenses they’ve already sold. The suit has had slow going so far. The latest update is that the case is in Dallas Federal Court over a discovery dispute with Conference-USA. The plaintiffs have managed to fend off attempts at dismissal by the NCAA so far, but we should expect both sides to fight this one as far as they possibly can. An accounting of profits, if a court found the NCAA liable, could be a deep, painful stab at their continued financial viability. It could also be a powerful precedent for current players to sue on similar grounds.

The NCAA’s position is not completely without merit. Their rules, flawed as they may be, have been applied consistently for decades. Among professional leagues, these rights are typically handled collectively (like the NCAA) to simplify licensing agreements. There are arguments for this simplicity, and it is difficult to say what percentage of the license fee paid to the NCAA is for current players versus the retired players. Historic rosters bring value, but to subdivide that by the value of a given year’s team and further separate it by player is difficult. Moreover, the percentage of historic inclusions at the college level is substantially lower than at the pro level since there are many more teams in the NCAA.

This is not the only dispute over player likenesses in the past few years. The Madden franchise has been the target of similar suits discussed previously by Law of the Game. That incident led to a $28 million verdict in 2009, requiring the players’ union to pay the retirees who went uncompensated. Yet another suit was filed in July 2010 over a similar issue, but targeting EA rather than the NFLPA.

We will continue to watch the progress of O’Bannon with a close eye. As gamers and sports fans, it could forever change the games we have enjoyed so much.

Zack Bastian is an official contributor to Law of the Game. A third year student at George Washington University Law, Zack works at the Woodrow Wilson Center's Science and Technology Innovation Program and is a member of the American Intellectual Property Law Association. The opinions expressed in his columns are his own. Reach him at: zack[dawt]bastian[aat]gmail[dawt]com.


Marc Whipple said...

I'm not familiar with this game. You say they don't use player names but "similar characters." Do the characters physically resemble the human beings they are allegedly based on?

If there's no name and no physical likeness, I think this may be a bridge too far, policywise. I mean, I can always find some other player who had similar playing style for some reasonable value of "similar playing style."

If they do, the fact that the names are different is relevant but IMO shouldn't be dispositive under a statute like Illinois' Right of Publicity Act.

notorious said...

They do indeed physically resemble the actual players, share skills, and are on the rosters of the teams they played for at the collegiate level. They stop short of using the actual name, but the identification to sports fan is pretty obvious.