Thursday, October 3, 2013

The EA Settlement and Eligibility

Last March, in an Open Letter to College Athletes, I opined that as college athletes’ names and likenesses become increasingly more valuable for use in commercial products, sellers of commercial products and services may become more willing to use and profit from the identities without permission in exchange for the cost to settle the athlete’s publicity rights lawsuit.  This results in a pseudo-licensing fee; in other words, the settlement operates as an ex post licensing transaction that was not negotiated and paid ex ante.   The issue then becomes whether any legitimate purpose is served by burdening athletes with such unnecessary, time-consuming, and costly litigation.  Why should athletes not be permitted under NCAA rules to license the use of their names and likenesses in commercial products and receive the substantive equivalent payment that they otherwise would receive in litigation suing the seller for violating the athlete’s right of publicity?

As far as eligibility is concerned, I do not know how the NCAA could legally sanction college athletes for collecting damages in a court of law through the enforcement of their own property interests against third parties who commercially exploit them without the athlete’s permission (i.e. without a license).  As third-party beneficiaries of the NCAA bylaws, college athletes would have standing to challenge such an eligibility decision on the grounds of arbitrary and capricious enforcement.  The first question would be, how is the NCAA's endorsement rule rationally related to the preservation of amateurism?  Given how commercialized the big business of college sports has become and the increasing exploitation of college athletes, I am not convinced that if the NCAA faced a Jeremy Bloom-like challenge to its endorsement rule today that a Colorado state court or a court in a different jurisdiction would have much sympathy for the NCAA and its assertion that the endorsement rule prevents college athletes in big-time college sports from becoming "billboards for commercialism."  The recent rulings of the Third and Ninth Circuits not only suggest a much more skeptical view of amateurism principles that would allow commercial entities to profit off the backs of the unpaid labor that makes those profits possible but also signify a movement towards courts' recognition of college athletes receiving compensation for the use of their identities in commercial products and services.  Secondly, the discipline or suspension of a college athlete for exercising his property rights in a court of law would likely be viewed as arbitrary and capricious enforcement and a violation of public policy.