Athletes Sue NCAA for Denial of Income

Attorneys have raised the stakes in the battle over compensating college athletes, filing an antitrust lawsuit against the NCAA that seeks to allow athletes to earn money and calls for monetary damages for past use of their images, names and likenesses, including television rights and social media earnings.

The suit names an Arizona State University swimmer, Grant House, and a University of Oregon basketball player, Sedona Prince. Attorneys said they are seeking to make it a class action, and on their website they are encouraging other athletes to join in. Damages could amount to hundreds of millions of dollars, as the suit covers athletes who played over the past four years and continues forward until the suit is resolved.

The suit is the latest development in a series of legal maneuvers aimed at getting college athletes some financial benefit from colleges and sports leagues, which make millions off the athletes’ performances, while the players are in general prohibited from doing so.

The 231 NCAA Division I schools (the largest athletic programs) generated $9.15 billion in sports revenue in fiscal 2015, according to an analysis of U.S. Department of Education data compiled by USA Today.

The suit outlines the case of former Duke University basketball player Zion Williamson, now with the professional NBA New Orleans Pelicans. During a 2019 March Madness NCAA tournament game, Williamson crashed to the floor when his Nike shoe shredded.

“Williamson wore Nikes because Duke had a multimillion-dollar sponsorship contract with the company,” the lawsuit says. But Williamson made no money from it. Some 4.34 million people watched that game, the suit says, and “in that moment, the true nature of big-time college sports — and the powerful commercial influences that surround them — were laid bare.”

“By the following day, Nike, the manufacturer of the shoe Williamson was wearing, had suffered a $1.1 billion decline in its stock market value that analysts attributed directly to the incident.”

NCAA regulations at the time prohibited Williamson and other athletes from getting paid for any activity — including endorsements, appearances and advertisements — other than scholarships.

Since then, several states have passed laws that would allow compensation. Initially, the NCAA argued that state-by-state rules would pit colleges against each other in athlete recruitment and give a leg up to schools in states where the athletes could earn money. But more recently, the NCAA capitulated, and supported rule changes to allow college athletes to receive compensation for endorsements.

A bill in Congress to nationalize a policy has gone nowhere. Last week, Florida Gov. Ron DeSantis, a Republican, signed a bill allowing athletes in that state to profit off their “name, image and likeness.” A similar California law takes effect in 2023.

In May, a three-judge panel of the 9th U.S. Circuit Court of Appeals unanimously upheld a district court ruling that the NCAA had violated antitrust laws with its limits on education-related benefits that college athletes can receive. The ruling appeared to open the door to monetary compensation, though it didn’t go that far.