The Forgotten Party in O'Bannon v. National Collegiate Athletic Association: How Non-Revenue Sports Operate in a Changing Intercollegiate Marketplace

• Author: Dillon J. Besser
• Position: J.D. Candidate, The University of Iowa College of Law, 2016; B.A., William Jewell College, 2013
• Pages: 2105-2140

BESSER_PP_FINAL (DO NOT DELETE) 7/4/2016 4:30 PM

2105

The Forgotten Party in O’Bannon v.

National Collegiate Athletic Association: How

Non-Revenue Sports Operate in a

Changing Intercollegiate Marketplace

Dillon J. Besser*

ABSTRACT: The O’Bannon v. National Collegiate Athletic

Association litigation has put the financial landscape and future of

intercollegiate sports at a monumental crossroads. The U.S. district court

granted Division I men’s basketball and football players remedies due to

antitrust violation by the National Collegiate Athletic Association (“NCAA”).

On appeal, the Ninth Circuit affirmed that NCAA must pass antitrust

scrutiny and accepted one of the district court’s remedies. Other reforms,

including the NCAA’s decision to grant the Power Five Conferences more

autonomy, have made clear that the “Principle of Amateuri sm” needs to be

revisited for college athletes. The vast majority of athletes, those in “non-

revenue” sports, do not have a clear place in this reform. Those in a position

of reform should account for these interests to reach the best solution for the

future of intercollegiate athletics. This Note proposes three possible routes that

fit the changing times for student-athletes and their compensation for their

athletic services. First, without other intervention, changes to college athletics

could lead to a free market employer–employee relationship between student-

athletes and the institutions. Second, government intervention could help

stabilize what lies ahead in college athletics. Lastly, and what this Note argues

to be the most appropriate, member institutions should embrace cost-of-

attendance scholarships, and the NCAA should reform its bylaws to allow

student-athletes to receive compensation for their name, image and likeness.

The NCAA bylaw reform should rethink the “Principle of Amateurism” and

allow athlete-agent interaction for the benefit of “indirect financial activity.”

*

J.D. Candidate, The University of Iowa College of Law, 2016; B.A., William Jewell

College, 2013. Thank you to the staff of Volumes 100 and 101 of the Iowa Law Review for the

great experience. Thank you to Jay Bilas (and to my friend Nick Schwerdt for providing the

connection), Dr. Darlene Bailey, and Professor Herbert Hovenkamp for taking the time to help

with my research. And finally, thank you to my family for their amazing encouragement

throughout the years.

2106 IOWA LAW REVIEW [Vol. 101:2105

I. INTRODUCTION ........................................................................... 2106

II. HOW AMERICA ARRIVED AT TODAY’S INTERCOLLEGIATE

ATHLETICS STRUCTURE .............................................................. 2110

A. COLLEGE ATHLETICS AND THE ORIGINS OF THE NCAA ........... 2111

B. COLLEGE SPORTS BECOMES BIG BUSINESS .............................. 2113

C. TITLE IX AND OTHER GOVERNMENT INVOLVEMENT IN COLLEGE

SPORTS ................................................................................. 2114

D. ADDITIONAL STUDENT-ATHLETES’ RIGHTS LITIGATION .......... 2116

E. THE BATTLE FOR STUDENT-ATHLETE COMPENSATION:

O’BANNON .......................................................................... 2117

III. THE NINTH CIRCUIT DECISION, POWER CONFERENCE SHIFTS

AND WHAT IS AHEAD ................................................................... 2120

A. THE NINTH CIRCUIT’S O’BANNON DECISION ........................ 2121

B. THE EFFECTS OF O’BANNON AND OTHER SIGNIFICANT

CHANGES .............................................................................. 2123

C. DANGERS FOR THE “FORGOTTEN SPORTS” ............................... 2126

IV. NON-REVENUE SPORTS’ PATHS TO SURVIVAL .............................. 2129

A. THE LAISSEZ-FAIRE APPROACH .............................................. 2129

B. THE GOVERNMENT INTERVENTION APPROACH ....................... 2133

C. NCAA FINANCIAL GOVERNANCE: 21ST-CENTURY APPROACH .. 2136

1. Implementation of Cost-of-Attendance

Scholarships ................................................................. 2137

2. NCAA Bylaw Reform to Allow Student Access to NIL

Revenues ...................................................................... 2138

V. CONCLUSION .............................................................................. 2140

I. INTRODUCTION

College sports and American culture are intertwined. Approximately

420,000 young adults in about 1000 member institutions are now a part of

the National Collegiate Athletic Association (“NCAA”).1 While most “will be

going pro in something other than sports,”2 no one can deny the impact that

collegiate athletics have on students. Countless students have needed non-

revenue intercollegiate sports to “make it.”

1. NCAA College Athletics Statistics, STAT. BRAIN RES. INST., http://www.statisticbrain.com/

ncaa-college-athletics-statistics/ (last visited May 16, 2016) (providing information verified as of May

16, 2016).

2. NCAA, NCAA Commercial Spot: Going Pro in Something Other than Sport (Bourse Sportive USA),

YOUTUBE (Jan. 29, 2013), https://www.youtube.com/watch?v=CXeDUFTaU1Y.

2016] THE FORGOTTEN PARTY 2107

One example comes from William Jewell College, a small but well-

respected liberal arts institution in Liberty, Missouri.3 William Jewell Athletic

Director Darlene Bailey recounted the story of a student-athlete who

graduated in December 2014.4 School-sponsored athletics are not often the

reason that an individual ends up at a school like William Jewell, which

competes in the NCAA’s Division II.5 Yet this particular student-athlete came

to the school after being discarded from a larger university due to

underwhelming grades and lack of playing time.6 The coaching staff for this

young man’s non-revenue producing sport at William Jewell gave him another

shot at higher education, supplemented by an athletic scholarship.7 He

struggled through poor grades his first year but wanted to be there because

he was getting the chance to play college sports.8 The coaching staff and Dr.

Bailey took care to ensure that he was not forgotten in the highly academic

environment.9 The young man seized the opportunity and remained eligible

every semester.10 After completing a strong student-athlete career, this

student-athlete will realize the prize of a college degree.11 This would not have

happened without college athletic programs for non-revenue sports and

scholarships that draw individuals to a school like William Jewell.

The NCAA has become big business.12 Yet the value for the “forgotten”

athletes—those not seen on ESPN every Saturday in the fall or at the men’s

basketball tournament every March—is comprised completely of the

3. See About Jewell, WM. JEWELL C., https://www.jewell.edu/about-jewell (last visited May 16,

2016) (“Consistently ranked among America’s best colleges in U.S. News & World Report, Forbes,

The Princeton Review, Washington Monthly, and Kiplinger’s Personal Finance, Jewell is cited for small

class sizes, low student debt, high graduation rates, commitment to service and overall value.”).

4. Telephone Interview with Darlene Bailey, Athletic Dir., William Jewell Coll. (Oct. 17, 2014).

5. See About NCAA Division II, NCAA, http://www.ncaa.org/about?division=d2 (last visited

May 16, 2016) (“[I]nstitutions in Division II generally don’t hav e the financial resources to devote

to their athletics programs or choose not to place such a heavy financial emphasis on them.”).

6. Telephone Interview with Darlene Bailey, supra note 4.

7. Id.

8. Id.

9. Id.

10. Id.

11. Id.

12. Big business and college sports now go hand in hand. Television money for both men’s

Division I basketball and FBS football has skyrocketed. The NCAA is in the middle of a 14-year March

Madness (men’s basketball tournament) television contract with CBS and Turner Broadcasting that is

worth $11 billion. Chris Smith, The Most Valuable Conferences in College Sports 2014, FORBES (Apr. 15,

2014, 2:49 PM), http://www.forbes.com/sites/chrissmith/2014/04/15/the-most-valuable-conf

erences-in-college-sports-2014. Additionally, the television contracts each Power Five Conference (Big

Ten, Big 12, Pac-12, Southeastern Conference (“SEC”) and Atlantic Coast Conference (“ACC”))

receives for football are enormous. For example, the SEC’s new network contract is reported to have a

payout to each team of $34 million annually starting with the 2014–2015 season. Steve Berkowitz, SEC

Revenue Set to Jump 50% with Playoff, New TV Deals, USA TODAY (Jan. 16, 2013, 9:23 PM),

http://www.usatoday.com/story/sports/college/2013/01/16/sec-conference-money increases

/1836389.