Three Things the O’Bannon Ruling Does Not Mean

Legal, Licensing

O'Bannon Does Not MeanIf you’re not inclined to read my full report on the ruling in the O’Bannon case that came down on Friday, you can probably get away with simply knowing what it does not mean.

  • It does not mean all student athletes are getting cost-of-attendance stipends. In fact, it doesn’t even mean all football and men’s basketball student athletes are getting cost-of-attendance stipends. What the ruling said was that the NCAA cannot set a rule limiting stipends to anything less than cost-of-attendance for football and men’s basketball student athletes. If I were a betting woman, I’d say the NCAA sets the limit for stipends at cost of attendance and allows all student athletes to receive that stipend. Some schools will be able to afford to implement the stipend, some will not. There is no requirement in the ruling that schools must starting funding cost of attendance stipends, merely that the NCAA cannot legislate against it.
  • You’ve probably heard about the $5,000 tied to the trust fund idea. It does not mean every football and men’s basketball student athlete is automatically accruing $5,000 per year in a trust fund to access after graduation or exhaustion of eligibility. What the judge said was that the NCAA cannot prevent schools from offering at least $5,000 per year to football and men’s basketball student athletes (to be placed in a trust for disbursement upon graduation or exhaustion of eligibility). The NCAA will likely set the cap at the minimum $5,000/student athlete/year. Each individual school can then decide if they want to participate, but they are not required to do so. One school might decide on the $5,000 number, another might only be able to do $2,500, and yet another might decide they cannot afford to do anything. Whatever the schools choose, they must implement it equally across a recruiting class. You can’t offer higher-profile recruits more than other recruits. You can, however, change the amount with each new recruiting class.
  • Sadly, it does not mean the NCAA Football video game is coming back. The judge did not rule that football and men’s basketball players could pursue individual commercial sponsorship or endorsement deals. In other words, they can’t sign on their own with EA Sports or Nike or Gatorade or anyone else. The ruling simply forces the NCAA to allow schools to share some licensing revenue with student athletes under the two very limited circumstances explained above. Is still means schools will have to decide to license with EA Sports or other video game producers in order for the games to come back. Student athletes cannot join together and go license their name, image and likeness to create video games, at least not under this ruling.

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