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NCAA, Athletes Draw Questions From Judge Over Pay for Play

NCAA, Athletes Draw Questions From Judge Over Pay for Play

(Bloomberg) -- A judge hearing a challenge to the National Collegiate Athletic Association’s bar on pay for athletes asked tough questions of both sides as she weighs whether to send the dispute to trial.

U.S. District Judge Claudia Wilken signaled at a hearing Tuesday in Oakland, California, that she hasn’t made up her mind up about a case that could fundamentally change college sports forever, opening the door for student athletes to be paid in an open market similar to professionals.

Wilken previously sided with the athletes in an antitrust lawsuit led by former University of California at Los Angeles basketball star Ed O’Bannon, though she stopped short of allowing a completely open market on athlete licensing. Her 2014 ruling was later pared back by the U.S. Court of Appeals in San Francisco.

That lawsuit focused primarily on the ability of athletes to profit off their likenesses; O’Bannon claimed he deserved compensation for his image being used in video games. The current lawsuit casts a much wider net. Labor lawyer Jeff Kessler, who helped win free agency for National Football League players, is seeking to lift all NCAA limits on compensation for Division I athletes.

Following the judge’s 2014 ruling, top-tier athletic departments have begun offering scholarships that meet the total cost of attendance to most, if not all, of their athletes.

Tuesday’s Hearing

During a 90-minute hearing, Wilken needled both sides Tuesday about where to draw the line on compensation -- and suggested at one point that she may ask lawyers to submit further written arguments.

While the appeals court contemplated that collegiate rules may change over time, “there is no question that if there is a little change, we’re not going to run back to court and play whack-a-mole,” she said.

The judge also asked whether the lawsuit is “punishing” schools that voluntarily raised their caps on athlete expenses.

Beth Wilkinson, a lawyer for the NCAA, argued that the appeals court ruling precludes the athletes from pursuing further compensation.

“The irony is we provided more benefits and they are trying to say that is the basis to require more,” she said.

Kessler argued that after the NCAA decided to allow athletes to receive gifts that aren’t tethered to their education costs, it must justify why additional compensation shouldn’t be allowed.

The judge didn’t indicate when she will rule.

Clemson Player

Kessler represents former Clemson University football player Martin Jenkins, who contends the scholarship process itself is an unfair cap on wages. Colleges are depicted in the suit as conspirators -- not competitors -- during the recruiting process. If a player is worth more to a school than the value of his full cost-of-attendance scholarship, he should be compensated as such, according to the complaint.

Kessler sees a possible future when college football’s richest programs are essentially bidding on the services of the nation’s best players, offering packages that stretch far beyond what’s available now. That world would present many schools with a tough choice, and many, like athletic powerhouse Notre Dame, have said they won’t participate in a structure in which student athletes are paid in a fully open market.

Public support for paying college athletes appears to grow every year, as the richest programs in college football and college basketball continue to reap record revenue from broadcast rights, ticket sales and donations. There were 28 athletic departments that made more than $100 million in revenue in 2015-16, led by Texas A&M at $194 million. Alabama football coach Nick Saban was paid more than $11 million dollars this season, and has three assistants paid more than the university president.

The discussion was front-and-center late last year when the U.S. Justice Department filed criminal charges against 10 men following a multiyear investigation into bribery in college basketball recruiting.

Coaches, managers, financial advisers and an Adidas AG executive were accused of playing roles in various illicit payment schemes, including some as small as $4,000 to get high school prospects to commit to specific schools. That underground economy would not be necessary, many argue, if elite basketball players were allowed to profit off their craft while at school.

In September, a Washington Post poll found that 50 percent of U.S. sports fans believe a scholarship is adequate compensation for the money student football and basketball players generate for their schools, while 41 percent believed they should have more compensation. More than two-thirds of sports fans said college athletes should be paid when their name or image is used in a video game or to sell merchandise.

The case is Jenkins v. National Collegiate Athletic Association, 4:14-cv-02758, U.S. District Court, Northern District of California (Oakland).

To contact the reporters on this story: Pamela Maclean in Oakland, California at pmaclean2@bloomberg.net, Eben Novy-Williams in New York at enovywilliam@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Janet Paskin at jpaskin@bloomberg.net, Peter Blumberg

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