Today’s post is courtesy of guest blogger Amanda M. Miller, a current Sports Business/Marketing MBA student at Arizona State and summer intern for Navigate Marketing.
In the last three months, the NCAA has come under attack on multiple fronts. First, lawsuits were filed (separately) by former Rutgers football player Ryan Hart and former Arizona State quarterback Sam Keller against Electronic Arts (aka EA Sports) and the NCAA for essentially using the likeness of collegiate athletes without compensating them. Then, former UCLA basketball star Ed O’Bannon filed a lawsuit against the NCAA for the use of former players’ likenesses without compensation.
The NCAA is a multi-million dollar business. Revenues in 2008 were over $660 million (see the NCAA 2008-09 budget) and a negative resolution to these lawsuits would seriously jeopardize the largest chunk of that income. When you consider that 89% of last year’s revenue came from “Television and Marketing Rights Fees,” it becomes obvious that this is going to be a contentious fight.
EA Sports and the NCAA will throw everything but the kitchen sink into this lawsuit to protect their interests. I think what it comes down to is the question of whether major college sports (basketball and football mainly, baseball to a certain extent) have lost their amateurism.
The NCAA has always stood behind the ‘contract’ all collegiate players sign that allows the NCAA the use of their name and likeness. O’Bannon is contending that that very contract is only in effect while the player is competing for an NCAA institution. Once the player leaves college, they regain the rights to their image. Classic games are often re-run and there is a solid argument that the players in those games should get royalties each time it is re-aired. Championship DVDs and replica jerseys with former players’ names on them are sold on a daily basis, with the revenue going straight to the NCAA.
With respect to the EA Sports case, NCAA bylaws prohibit the use of the names and likenesses of athletes for commercial purposes. Does the fact that the University of Florida is quarterbacked by a 6′ 3″ left-handed player wearing the number 15 in EA’s NCAA Football 2009 mean they are ‘using’ the likeness of Tim Tebow? Keller contends that in the 2005 edition, Arizona State’s quarterback showed an unmistakable resemblance to him: same jersey number, same height and weight, hair color and home state. It’s this uncanny similarity that prompted him to file the lawsuit.
Now, I feel slightly differently when it comes to paying collegiate athletes outright for competing. Many of them get scholarships and, if you look at it like the summer internship that I’m participating in, for a reduced (or no) salary, the player (intern) gets the opportunity to learn on the fly, impress possible future employers (NBA or Navigate Marketing as the case may be) and network with those in their chosen career field. So I could argue pretty heavily that the NCAA players do get ‘paid’ just not with a paycheck every two weeks.
These lawsuits are a different story though. In one case, the NCAA is profiting from the very athletes that they are no longer paying. A simple solution to the O’Bannon lawsuit would be to give former players a royalty for each game re-aired, DVD or jersey sold, but only after that player is no longer actively competing in NCAA competition. Once the player cashes one of those royalty checks, any remaining eligibility they have would be erased.
The EA Sports lawsuit is a more slippery slope. How close of a resemblance does a CGI figure have to have to a living person before it’s considered his/her ‘likeness’? Many in the college ranks, and even those in the professional realm, should pay attention to these cases. Their resolutions will have reverberations in marketing deals for years to come.