9 Mar 1995: Forward Ed O''Bannon of the UCLA Bruins looks on during a game against the Oregon State Beavers. UCLA won the game, 86-67.
Judge rules against NCAA on compensation
03:03 - Source: CNN AP

Story highlights

A judge ruled that some college athletes can start getting paid up to $5,000

Lawsuit was aimed at NCAA ban on paying athletes for use of their images

A lucky connection to a top class-action lawyer was key to the case

Still to come: A lawsuit to eliminate all payment caps

CNN  — 

College football is changing.

About half of the players who put on pads and helmets this weekend will have the opportunity to make money from their sport before they graduate.

This summer, a federal judge in California ruled that for the first time in college sports, athletes who generate millions of dollars for their universities and for corporate sponsors may start cashing in.

Judge Claudia Wilkins found that the NCAA’s ban on athletes being paid for the use of their images and likenesses was a violation of antitrust laws.

This means that starting in 2016, universities can choose to pay college football and basketball players up to $5,000 per year for the use of their images.

The ruling came as a result of a lawsuit filed by former UCLA basketball player Ed O’Bannon.

O’Bannon was sitting at a friend’s house watching himself in a video game when the wheels began to turn: Why, he wondered, is my image being used years after I’m out of college to make money for someone else?

And it all did start that way — sort of.

O’Bannon will certainly be remembered as one of the first big-name athletes to risk standing up to the NCAA and having an opinion.

But the proverbial stars were certainly aligned.

Around the same time that O’Bannon got upset about his avatar, the man who practically invented branding athletes was at his own turning point.

Sonny Vaccaro had launched his career by suggesting to Nike executives that they start paying athletes to wear their gear. He put the first Nike shoes on Michael Jordan, and became the godfather of athlete endorsements.

Anyone who’s ever caught a glimpse of a sporting event on TV knows that teams secure big endorsement deals on everything from socks and sweatbands to the cups that members of the press drink on the sidelines.

But Vaccaro also saw the inequities in college sports, where universities and the NCAA were banking millions off the backs of kids who were struggling to pay for laundry.

He was telling anyone who’d listen.

One of those people was a friend who happened to be a lawyer with a loose connection to one of the best class-action lawyers in the country, Michael Hausfeld.

Hausfeld has a tremendous courtroom record. He’s taken on Swiss banks who stole from Holocaust victims and manufacturers of genetically engineered foods. He’s even won some notable sports cases.

But he’s the first to admit he knows absolutely nothing about sports. During the trial against the NCAA, Hausfeld acknowledged to co-counsel that he wasn’t familiar with Tanya Harding or Johnny Manziel.

But Hausfeld saw merit in Vaccaro’s inequity argument, and he took on O’Bannon’s case.

“It’s the irony of this case, the odds of it happening. It almost didn’t happen,” Vaccaro said. “This is, to me, the most important thing I’ve ever done in my life. I’ve helped this case move forward. If I don’t run into Michael Hausfeld, it probably never happens.”

NCAA on the defensive

Over its five-year journey through federal court in Oakland, California, the suit had a huge impact on public opinion of the NCAA. Even before it got to a courtroom, it put the organization on the defense.

The case quickly changed from being a grievance about video games to a broad indictment of the association that regulates college athletes.

At trial, there were witnesses talking about academic fraud, corporate sponsorships, internal disputes within the NCAA, and even health and safety.

But the judge, in her ruling, said that other criticisms of the NCAA are better suited for public policy forums, not the courts.

Those “cannot be remedied based on the antitrust causes of action in this lawsuit,” her order said. “It is likely that the challenged restraints, as well as other perceived inequities in college athletics and higher education generally, could be better addressed as a policy matter by reforms other than those available as a remedy for the antitrust violation found here.”

Shortly after the suit was filed, EA Sports, which was also named in the lawsuit, stopped making the game that O’Bannon was watching when he got angry, and ended up agreeing to a multi-million-dollar settlement payment. The NCAA partially settled, too, admitting it was wrong on the video games, but stood strong in defiance of paying athletes for other likeness issues.

NCAA under fire: 5 things to know

‘College athletes needed a voice’

In 2013, the case got a huge boost when six current athletes were added as plaintiffs, expanding it to the television contracts that make millions for universities and the NCAA.

Ramogi Huma, a NCAA reformist who has been behind so many of the major movements, had the contacts needed to find current athletes brave enough to take on the NCAA.

By this time, Huma had been fighting the NCAA for nearly 20 years as the president of the National College Players Association (NCPA).

Huma started his organization in 1997 while he was still a linebacker for UCLA.

He was a second-string player, and the starter was Donnie Edwards.

“He had a big impact on me. I looked up to him,” Huma said. “How hard he worked and how effective he was on the field.”

In 1995, Huma says that Edwards gave an interview to a radio program and mentioned that he sometimes couldn’t afford to buy all the food he needed to maintain his playing weight. The NCAA found out that he later accepted a bag of groceries left on his door step. He lost his eligibility.

“At the time, they were actually selling his jersey in stores and it just really made me feel like college athletes needed a voice,” Huma said. That was the birth of the NCPA.

“All of us could relate,” Huma said. “We felt powerless we didn’t have a voice; we couldn’t stand up for him or for ourselves.”

For years, the NCPA was a David up against a Goliath. The attention that the O’Bannon case brought helped change that.

“The dialogue that took place as the lawsuit continued on was very important,” Huma said. “People are coming out of the trance and seeing college sports for what it is.”

The NCPA now has 17,000 current and former Division I athletes.

The organization has been part of the three of the biggest pushes for change — the O’Bannon case, the attempt by Northwestern football players to unionize, and the next big NCAA lawsuit that will go to court, which seeks to remove any salary caps for college athletes.

These movements have undoubtedly pushed the NCAA to step up its own change.

Public pressure on the NCAA led to a vote to add players to the board and give more autonomy to the five power conferences. A long-awaited increase in a cost-of-living stipend was approved, too.

“It’s really the time for college athletes to get their due,” Huma said. “It’s been a long road for a lot of these guys but it’s been an important one. They are going to change the lives of a lot of people coming after them.”

Will schools choose to participate?

There are still a lot of unanswered questions about the O’Bannon ruling.

O’Bannon lawyer William Isaacson said it’s still unclear whether athletes would be able to sell their images and likeness on their own by signing contracts with, say Nike, or other corporate sponsors.

Huma doesn’t believe so. He said an athlete would still be in trouble for accepting cash for his autograph.

What’s also not clear is if any of this will affect college athletes in the non-revenue generating sports – everything besides men’s basketball and football. Wilkens’ ruling only addresses those two sports.

All of that will likely play out in time. The NCAA is appealing, but the judge ruled that appeal will not affect her ruling to start allowing schools to pay at the beginning of the 2016 football season.

There’s also a question of whether schools will choose to participate.

The ruling does not require universities to pay a dime. It simply gives them the option. That could quickly lead to bidding wars in recruiting.

During the trial, Jim Delaney, commissioner of the Big Ten, said he didn’t think schools in his conference would choose to pay athletes.

So what would happen if other conferences did? Would they no longer play each other?

During the trial, the NCAA proposed that paying players would destroy college sports and force some Division 1 schools to move to Division 3.

Judge: Tradition, not amateurism, is the real draw

In a way, the ruling is a partial win for the NCAA. Capping payments at $5,000 per year is far from the million-dollar contracts of the pros.

The NCAA argued that fans would be turned off if players are paid – that the draw for them is the amateurism and an even playing field. There are polls that say more than half of college fans don’t think players should be paid.

The judge rejected that, saying fans come for tradition, not amateurism. O’Bannon’s lawyers say her move of setting a $5,000 cap was smart.

“This is a very reasonable step forward but a significant step forward,” O’Bannon lawyer Isaacson told CNN. “One of the things the judge is saying here … is some sharing is OK. It won’t affect amateurism, won’t affect the popularity of the sport. She made a very reasonable and significant and measured decision.”

Ironically, that $5,000 figure came from one of the NCAA’s own witnesses, who on the stand said that a million-dollar contract for a college player would bother him, but $5,000 would not.

The cap will prevent million-dollar contracts for athletes. At least for now.

‘It makes me feel good’

Wilkens now takes on an even bigger lawsuit this fall. High-powered sports attorney Jeffrey Kessler, who negotiated a free market for the NFL and NBA, is now seeking to do so in college sports.

His lawsuit vs. the NCAA wants to eliminate all payment caps, which could easily lead to payments of more than $5,000 — and salaries that aren’t held in trust until after an athlete leaves school.

But for now, the advocates, like Huma and Vacarro, and the athletes who they stand for, are pretty satisfied.

Tyrone Prothro, the former Alabama football player who won an ESPY for a breathtaking catch, then three months later shattered his leg and all prospects of playing pro ball, was a key plaintiff in the suit. His story of struggling financially a decade after leaving school was the essence of what the plaintiffs were fighting for in court.

“I know I’m not able to benefit from it but just to see there’s going to be a change,” Prothro said. “It makes me feel good to know that I’m a part of the change that helped change things for players.”

Paying college athletes would hurt traditions, NCAA chief testifies