Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Ex-college athletes allege conspiracy to deny compensation for use of name, image, and likeness, (Oct 7, 2014)

By Linda O’Brien, J.D., LL.M.

Television and sports networks, licensing and marketing businesses, and ten member conferences of the National Collegiate Athletic Association (NCAA) engaged in a conspiracy with the NCAA to implement rules that deprive current and former football and basketball student athletes of their rights to compensation and continued use their names, images, and likenesses, in violation of the Sherman Act and Lanham Act, according to a complaint filed in the federal district court of Nashville (Marshall v. ESPN, Inc., October 3, 2014).

The NCAA is a nonprofit organization of approximately 1,200 educational institutions that organizes athletic programs in many of those institutions in the United States. The NCAA negotiates media contracts with television and sports networks and licensing and marketing businesses of member conference football and basketball games in the United States.

Javon Marshall, Steven Clarke, Chris Conner, Patrick Miller, Byron Moore, Chaz Moore, Sean Parker, Eric Samuels, Marlon Walls, and Rod Wilks were members of the football or basketball team in one of the NCAA conferences and did not receive compensation for the broadcast and license of their names, images and likenesses.

The complaint states that, through the NCAA Constitution and By-Laws, the NCAA and its member conferences jointly enforce a clear demarcation between student athletes and professional athletes by allowing only amateur student athletes to participate in intercollegiate sports. Regarding compensation for student athletes, the NCAA has adopted rules specifying how a student athlete can lose amateur status: use his or her athletic skills for pay; sign a contract to play professional sports; directly or indirectly receive a salary; receive reimbursement for expenses or financial assistance from a professional sports organization; or enter into an agreement with an agent. The rules are inherently anticompetitive, since they forbid student athletes from competing in the marketplace for the value of their services. As there is no reasonable alternative to pursue their athletic careers, student athletes must comply with these rules to remain eligible.

Television and sport networks have entered into lucrative, anticompetitive contracts with the NCAA and its member conferences for the rights to broadcast football and/or basketball games nationally. The contracts effectively adopt the restrictive NCAA rules that exclude student athletes from participating in the marketplace for the licensing, sale, and use of their names, images, and likenesses and allow the defendants to unlawfully profit from the use student athletes’ names, images and likenesses.

According to the complaint, the NCAA and its member conferences have also entered into licensing agreements with marketing and media companies, which include the licensing of student athletes’ publicity rights. The broadcast and licensing agreements are worth tens of billions of dollars and student athletes receive nothing or, at most, the cost of attendance. Additionally, under NCAA rules, student athletes can be left to pay sports-related medical bills, can have their scholarships revoked for any reason, and can pay thousands of dollars in out-of-pocket educational related expenses while receiving a “full scholarship.”

The complaint alleges that the right to license one’s name, image, and likeness has substantial commercial value. The NCAA prohibits a student athlete from participating in an NCAA sanctioned event unless the student athlete annually signs a form, Form 08-3a, that purports to allow the NCAA to use the student athlete’s name or picture to generally promote NCAA events, activities, or programs. Student athletes have no bargaining power and are coerced to sign the form in order to play in NCAA games. Additionally, many student athletes sign the form without any knowledge of its true meaning. Thus, Form 08-3a is unconscionable and should be declared unenforceable as a contract of adhesion and a violation of the right to publicity, according to the lawsuit.

The plaintiffs assert claims for infringement of rights of privacy, civil conspiracy, false endorsement, unjust enrichment, and violations of Section 1 of the Sherman Act. The action seeks an accounting, declaratory and injunctive relief, disgorgement of profits, damages, pre- and post-judgment interest, attorneys’ fees, and any other just and proper relief.

The case is No. 3:14-cv-01945.

Attorneys: Stephen J. Zralek (Bone McAllester Norton PLLC), Richard Manson and Ronald A. Stewart (Stewart Johnson Conner & Manson, LLP), and Patrick D. McMurtray (McMurtray Law Firm, PLLC) for Javon Marshall, Steven Clarke, Chris Conner, Patrick Miller, Byron Moore, Chaz Moore, Sean Parker, Eric Samuels, Marlon Walls, and Rod Wilks.

Companies: ESPN, Inc.; CBS Broadcasting, Inc.; National Broadcasting Company, Inc.; ABC, Inc.; Fox, Inc. IMG College, LLC; JMI Sports, LLC; Telesouth Communications, Inc.; T3 Media, Inc.; Learfield Sports LLC; William Morris Endeavors, LLC.

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