IP Law Daily, PUBLICITY RIGHTS—N.C. Super. Ct.: N.C. State’s 1983 champion ‘Cardiac Pack’ players sue NCAA for misappropriating names, images, and likenesses, (Jun 12, 2024)

By Robert Margolis, J.D.

NCAA allegedly forced student-athletes to sign away publicity rights without compensation, and has exploited those rights for more than four decades.

Ten members of the 1983 North Carolina State Men’s Basketball team, the “Cardiac Pack” who made history with their improbable run in winning the NCAA Men’s Basketball Championship that year, have filed a complaint alleging that the NCAA has for 40 years “exploited” them by forcing them to sign away for no compensation their rights to their names, images, and likeness (“NIL”), and then profiting from those rights. The players allege that the NCAA has used their images and the videos of their 1983 performance to advertise the “March Madness” tournament over the past 40 years, reaping millions of dollars, without proper consent and in violation of North Carolina antitrust law, the players’ rights of publicity, and North Carolina’s Unfair and Deceptive Trade Practices statute. The players also brought a claim for unjust enrichment. The complaint, filed in the North Carolina Superior Court in Wake County, North Carolina, alleges six claims jointly and severally against the NCAA and Collegiate Licensing Company (“CLC”), seeking damages (including treble damages on the antitrust claims), declaratory, injunctive, and other relief. Plaintiffs note that the full amount of their damages is unknown, and continues to increase, but that the revenues the NCAA has received over the years are substantial. The case has been assigned to North Carolina Business Court, with Judge Mark Davis presiding (Members of North Carolina State University's v. National Collegiate, No. 24CV017715-910 (N.C. Super. June 11, 2024)).

NIL rights. The players allege that under the guise of the principle of “amateurism,” NCAA bylaws have long prohibited student-athletes from obtaining “pay” from certain sources, which includes using their own NIL rights for commercial purposes. The bylaws further prohibit member institutions from improperly using the student-athletes’ names or images without their consent, with an exception for promoting NCAA or conference championships. At the beginning of each academic year, the NCAA and member schools require student-athletes to sign a “Student Athlete Statement” form, stating they have received no such payments; the failure to sign the form renders a student-athlete ineligible to participate in intercollegiate athletic competition.

According to the players, older versions of the form, including versions they themselves signed, included a provision authorizing “the NCAA [or a third party acting on behalf of the NCAA] to use your name or picture to generally promote NCAA championships or other NCAA events, activities or programs,” or substantially similar terms. The NCAA has interpreted that statement as “confer[ring] a license in perpetuity for the use of images and likenesses created during the athlete’s collegiate career,” according to the players. Under the circumstances, the NCAA coerced the student-athletes to give up legal rights, the players allege.

Markets. The players allege that the NCAA controls the collegiate sports market, including NIL license rights, game footage, team logos, and trademarks. This includes a range of products, including on-demand game films, stock footage or imagery for commercial or editorial use, replay of “classic games” (of which the Cardiac Pack’s championship game is among the most valuable) on streaming and television outlets, and merchandise. The NCAA itself runs footage on its own YouTube channel, and on NCAA.com. The NCAA has delegated most licensing to CLC, and also exploits its resources through such “unnamed co-conspirators” as CBS, TNT, and other licensees. These outlets produce billions of dollars in income to the NCAA.

The complaint traces the history of the “March Madness” championship, how it has become one of the signature sporting events, and televised events, every year, and how the championship run by the 1983 “Cardiac Pack” has “resounded through the decades that followed.” Plaintiffs allege that the “billions” of dollars made by the NCAA in the March Madness tournament over the ensuing years “were made on the backs of the Cardiac Pack—and other players like them,” from the “uncompensated use of the players’ names and likenesses, long after the players have left school.”

The players also allege that the NCAA enjoys a monopsony (buyer-side monopoly) on the market for student-athlete labor, given the absence of any substitute for elite athletic and academic opportunities, which it leverages to give itself a monopoly in the NIL market.

Antitrust claims. The players allege three antitrust claims: unreasonable restraint of trade under N.C. Gen. Stat. §§ 71-1 and 75-2, monopoly maintenance under N.C. Gen. Stat. § 75-2.1, and monopoly leveraging, also under N.C. Gen. Stat. § 75-2.1. They seek damages, declaratory relief, and injunctive relief on each claim.

The claim for unreasonable restraint of trade asserts that the above-described requirement that student-athletes “sign away their names, images, likeness, and publicity rights,” as well as the agreement between the NCAA, CLC, and unnamed co-conspirators (including NCAA member institutions), constitute a contract or combination “in restraint of trade of trade in the market for student-athlete services.” The players also allege that the NCAA asserts its market power, via the NCAA rules, to obtain for free the student-athletes’ publicity rights, depriving them of substantial profits they could otherwise receive for those rights, in violation §§ 71-1 and 75-2. Further, according to the players, there is no pro-competitive justification for requiring the student-athletes to sign away their rights for nothing, and numerous less restrictive alternatives could accomplish any procompetitive objective the NCAA could articulate.

The monopoly maintenance claim asserts that the NCAA possesses monopsony power in the market for student-athlete labor and services, and illegally exerts that power to initially force student-athletes to sign away their rights and then enforce that relinquishment into perpetuity. This practice is “a deliberate course of conduct aimed at eliminating competition” so that the NCAA can “extract maximum profit from the uncompensated labor of student-athletes … for itself.”

The players’ monopoly leveraging claim alleges that the NCAA unlawfully requires its member institutions to enforce the requirement that the student-athletes assign their publicity rights in perpetuity to the NCAA. According to the players, this practice allows the NCAA to leverage its monopsony on student-athlete labor “to create additional profits and power—and also monopoly power—in the separate market for media licensing of game footage, images, and accounts.”

Publicity rights claim. The players allege that the NCAA and its co-conspirators have misappropriated the players’ photographic likenesses, for commercial advantage, for use in advertisements without the players’ consent, in violation of North Carolina common law. They seek damages on this claim.

Unfair, deceptive practices. The players also allege that the coercion of student-athletes into signing away their publicity rights without consideration, or lose their eligibility, is “unethical, unscrupulous, oppressive, and offensive to public policy,” and thus violates North Carolina’s Unfair and Deceptive Practices Act. In addition to damages, the players seek a declaration that the assignment of the publicity rights is unlawful and unenforceable, and an injunction against the NCAA further relying on the assignment of those rights.

The Case is No. 24CV017715-910.

Judge: Davis, M.

Attorneys: Eliot Abrams (Cheshire Parker Schneider, PLLC) for Members of North Carolina State University's 1983 NCAA Men's Basketball National Championship Team, a/k/a The "Cardiac Pack.

Companies: National Collegiate Athletic Association a/k/a NCAA; CLC f/k/a Collegiate Licensing Co.

News: PublicityRights NorthCarolinaNews