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Lawsuit threatens NCAA's amateur business model

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The NCAA is facing a potential game-changing legal battle that has some colleges worrying their athletic budgets could be halved.

On June 20, a U.S. District Court in Oakland, Calif., will determine if an antitrust lawsuit brought by former UCLA basketball player Ed O’Bannon—who argues he should’ve been paid for the use of his likeness on game broadcasts and in EA Sports video games—can become a class action. The plaintiffs say players should get 50 percent of revenue tied to player images.

If the NCAA loses the case, sports business experts say, college athletics would change forever. Many are calling the case the biggest threat to college sports’ amateurism model the Indianapolis-based organization has ever faced.

Big Ten Commissioner Jim Delany even suggested to Sports Illustrated last month that schools in his conference could move to a model without athletic scholarships.

While that might seem far-fetched and, in fact, Delany later backed off the comment, the case is serious enough that athletic directors nationwide are considering contingency plans for the worst-case scenario.

“I think Ed O’Bannon has a solid case,” said local attorney Milt Thompson, who operates the sports marketing firm Grand Slam Cos. “There’s merit that these players have the right to their own likeness and that shouldn’t be exploited without their permission.”

ncaa_factbox.jpgThe case itself, which was filed in 2009, isn’t due to come to trial until July 2014. But that hasn’t kept athletic directors like the University of Notre Dame’s Jack Swarbrick from thinking ahead.

“We’ve certainly discussed the O’Bannon case internally and we’ve talked about the consideration of what might come,” said Swarbrick, an attorney who formerly practiced law in Indianapolis. “I wouldn’t feel comfortable calling it a contingency plan. It’s a matter of monitoring [this case] and thinking about the consequences.”

Swarbrick said Notre Dame is not alone.

“Most institutions are engaging in internal discussions about this,” he said. “Clearly, we have to at least consider the possibility of any ruling which would impact the basic business model [of college athletics], which this case certainly has the potential to do.”

Purdue Athletic Director Morgan Burke and Indiana Athletic Director Fred Glass declined to comment on the pending suit or its ramifications. Swarbrick wouldn’t divulge specifics of internal discussions at Notre Dame.

Pat Haden, an attorney and University of Southern California athletics director since 2010, hasn’t been shy about voicing concern. He said the case is “no slam dunk” for the NCAA.

“What do we do if we lost? All of a sudden, your television revenue—let’s say it’s $20 million a year [for a school], now if [the plaintiffs] win, it’s $10 million a year,” Haden recently told Sports Illustrated. “How do you make 21 sports work on half the revenue?”

This much is clear: With the NCAA’s enormous TV contracts and burgeoning licensing business, a lot of cash is at stake. The TV and multimedia contract for the men’s basketball tournament alone is a 14-year, $10.8 billion arrangement.

Money generated by such entities as the Big Ten Network also could become a target. Each Big Ten school — including I.U. and Purdue — reaped $8.1 million in 2012 and will receive $7.6 million this year from the Big Ten Network. The schools each received another $10.9 million this year from the conference’s contracts with ABC and ESPN.

Also at stake is a share of the estimated annual $4 billion in collegiate licensed merchandise, a business that has exploded over the last 15 years.

All that cash could be targeted by the expanding O’Bannon lawsuit, which now wants to include current players.

Trench warfare

As the stakes rise, the NCAA and its allies are digging in.

“This case has always been wrong —wrong on the facts and wrong on the law,” NCAA Executive Vice President and Chief Legal Counsel Donald Remy said in a statement released earlier this spring.

NCAA officials maintain the association has the right to control a player’s likeness in perpetuity. That right, say officials for the NCAA and its member institution, comes from waivers signed by college athletes.

Big Ten’s Delany told reporters in Chicago in late April that the NCAA won’t settle and that he expects a long, hard legal fight.

“There should be no compromise on this,” he said.

That all-or-nothing strategy could be a mistake — especially if things don’t go the NCAA’s way on June 20.

“If the class gets certified, the NCAA will be backed into a corner,” said Andy Staples, who has covered the case for Sports Illustrated. “It could either fight and risk a judgment that could run into the billions, or it could settle and force schools into a new economic model.”

The plaintiffs’ case is being argued by a bevy of law firms, including the renowned Washington, D.C.-based Hausfeld LLP, which specializes in difficult class-action suits, having previously secured damages for Holocaust survivors from Swiss banks who kept their assets after World War II, Alaska Native Americans in their fight with Exxon after the Valdez oil spill, and plaintiffs in the European Union’s antitrust case against Microsoft.

The plaintiffs also are working with Ken Feinberg, who organized distribution plans for settlements for 9/11 victims; those affected by the BP oil spill in the Gulf of Mexico; victims of the Aurora, Colo., theater shootings; and sexual abuse victims of former Pennsylvania State University defensive coordinator Jerry Sandusky.

Big O, Russell join case

The case has morphed dramatically since O’Bannon sat in his house in 2009 watching a video game featuring a UCLA player bearing his likeness.

In 2011, high-profile co-plaintiffs such as Indianapolis native Oscar Robertson and Bill Russell joined the lawsuit, in which video-game maker EA Sports is a co-defendant.

The case took a major turn in August 2012, when plaintiffs began arguing that current and former athletes should be included in the case and the plaintiffs’ lawyers argued that players are entitled to 50 percent of revenue generated by not just video games but also NCAA and conference TV contracts.

Any judgment along those lines would be a massive blow to the NCAA, which is represented primarily by Ann Arbor, Mich., firm Schiff Hardin LLP, since TV revenue is by far its biggest revenue generator. It would also be a huge hit to Big Ten schools such as I.U. and Purdue, which have quickly become dependent on revenue generated by the Big Ten Network.

Whopper settlement?

The NCAA sought to halt the plaintiffs from pursuing class-action status, saying the O’Bannon group had dramatically changed its claim.

But in January, the NCAA suffered a big hit when Judge Claudia Wilken of the U.S. District Court of Northern California denied the NCAA’s motion and agreed to hear the class-action certification request. Wilken also ruled in January that plaintiffs could add current players to the case and go after everyone profiting from the likeness of college athletes, including college conferences.

The June 20 court date “represents a tremendously important showdown in this case,” Thompson said. If the plaintiffs’ attorneys are granted class-action status, Thompson thinks the NCAA should be eager to settle. But that might not be easy.

“How do you calculate back damages?” Thompson said. “Those images allow the NCAA to generate a lot of money. The settlement could be a whopper.”

Even if damages escalate into the billions, they may not be the NCAA’s biggest concern.

In addition to demanding that all players get paid for every video game, highlight reel and game rebroadcast, O’Bannon’s lawyers are asking for something else — something that could position colleges one dangerous step from bidding for the services of student-athletes.

Plaintiffs are demanding that all current and future college athletes be able to forge their own licensing deals.

“Now you’re talking about a whole new game,” Thompson said. “It’s a game the NCAA doesn’t want any part of.”•

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  1. Am I the only one who sees that the City is essentially giving away the MSA site AND giving millions to build new buildings on the site when this site would be the perfect place for the Justice Complex? Across from City-County, check; keeping it centrally located, check, etc. It's my understanding that the GM site must be purchased by the City from Motors Liquidation Company. STOP WASTING WHAT WE ALREADY HAVE AND OUR TAX DOLLARS! The Ballard Administration has not been known for it's common sense...never voted for him and never will!

  2. This guy sounds like the classic molester/manipulator.

  3. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  4. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  5. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

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