Judges grant NCAA request for a stay; O'Bannon injunction on hold
A panel of judges from the 9th U.S Circuit Court of Appeals on Friday granted the NCAA’s request for a stay of the injunction in the Ed O’Bannon antitrust lawsuit. The injunction had been scheduled to take effect Saturday.
Judges Sidney R. Thomas, Jay S. Bybee and Gordon J. Quist wrote that “without expressing a view as to either party’s likelihood of success on the merits,” they are maintaining the status quo in the case until their ruling becomes official.
The injunction would allow schools to begin offering football and men’s basketball players as much as $5,000 per year in deferred compensation for the use of their names, images and likenesses.
The injunction was issued in August 2014 by U.S. District Judge Claudia Wilken, who found that the NCAA's rules at the time that basically limited athletes to tuition, room, board, books and fees “unreasonably restrain trade” in violation of antitrust laws. It had been due to take effect Saturday because that is when schools can begin sending written offer letters to athletes who are heading into their senior year of high school.
Michael Carrier, a Rutgers-Camden law school professor and antitrust expert who has been involved with a friend-of-the-court filing on behalf of the plaintiffs, told USA TODAY Sports via e-mail: “While this is not a guarantee that the NCAA has won on the merits of the case, at a minimum, it signals that the court is wrestling with what to do and may have issues with (Wilken’s) decision."
“It’s disappointing,” the plaintiffs’ lead attorney Michael Hausfeld said, “because it doesn’t resolve the uncertainty (Wilken’s) ruling has engendered about what intercollegiate athletics will look like for the athletes and the schools.”
Asked whether he thought the 9th Circuit’s decision to grant the stay was an indication of potential problem for his side, Hausfeld said: “Absolutely not. … Clearly this is not over.”
Under the injunction, incoming and returning Bowl Subdivision football players and Division I men's basketball players could begin receiving credit for the deferred pay beginning in the 2016-17 school year. The credit would be in addition to scholarships that, beginning with the upcoming fall semester, can cover the athletes’ full cost of attending school — not just the traditional tuition, fees, room, board and books. The athletes would be able to receive the deferred money when they finish their college careers.
However, on July 17 the NCAA asked for the stay, arguing that the association “and many schools and students” will be “irreparably harmed” if the injunction was allowed to take effect as scheduled, even if it was later vacated by the 9th Circuit or by the Supreme Court. The 9th Circuit panel heard oral arguments on the NCAA’s appeal in March, but it has not yet ruled.
The panel’s action Friday came as two high-level NCAA governing panels were trying to get the association ready for the prospect of having to comply with the injunction on Saturday.
"We are pleased the Ninth Circuit today granted the NCAA's motion for a stay," NCAA chief legal officer Donald Remy said in a statement. "As a result, the NCAA will not be implementing any changes to its rules in response to the district court's injunction at this time. We continue to wait for the Ninth Circuit's final ruling."
If the injunction had taken effect Saturday because of inaction by the 9th Circuit, or because of its full affirmation of Wilken’s ruling, the association was facing the need to make a number of immediate changes to the Division I rules or to enact some type of at least temporary rules waiver. And even then, there was considerable uncertainty about how conferences and schools would proceed, Big Ten Conference commissioner Jim Delany said Friday before the stay was issued.
“I’m sure there will be lots of details that need to be addressed," Delany said during a news conference in Chicago, where the conference was staging its annual football media days.
If the injunction had taken effect Saturday because of inaction by the 9th Circuit, or because of its full affirmation of Wilken’s ruling, the association was facing the need to make a number of immediate changes to the Division I rules or to enact some type of at least temporary rules waiver. And even then, there was considerable uncertainty about how conferences and schools would proceed — especially given a combination of the Division I rules and an interpretation that the NCAA made in October 2013 regarding athletes who intend to graduate from high school midyear and enroll in college in the same academic year, as some football players now do.
The injunction theoretically would have made it possible that a school could have offered — and a recruit could have signed — an institutional financial aid agreement that includes the deferred compensation. Because NCAA rules now generally prevent schools and coaches from choosing not to renew an athlete's scholarship for athletic reasons — these could become multiyear commitments.
Athletes not intending to enroll in college mid-year cannot sign offers from schools until the beginning of the applicable National Letter-of-Intent signing period. This year’s early signing period for basketball and other sports begins Nov. 11.
The plaintiffs opposed the NCAA’s request for the stay, saying the association had been given ample time to be ready for implementation and its request for a delay was “nothing more than a frantic defendant hoping to preserve a profitable anti-competitive scheme for a few more months."
“The simple fact,” the plaintiffs wrote, “is that no member school needs to change a thing under the injunction if it does not wish to do so. If the NCAA is correct, and modest compensation to college athletes is truly so thorny, no member school will choose to offer it after Aug. 1, 2015.
However, from comments made by some coaches in recent days, it seemed clear where they expect this to head if athletes are allowed to receive the deferred compensation.
Iowa coach Kirk Ferentz said during an interview at the Big Ten meeting that he has not read much about the injunction and isn’t sure what the next move will be.
“We'll talk about it (among the athletic department) and I'm sure the conference will trend in one way, I would guess,” Ferentz said.
Northwestern coach Pat Fitzgerald told InsideNU.com that he wouldn’t make any moves with speaking with the school’s athletics director Jim Phillips, but he also said: “I look at, like, the cost of attendance, and the minute we were able to do that, not only are we doing it for football, but we're doing it for all 19 sports, and that's the way that we've always done things,” Fitzgerald said. “So if [the $5,000 in deferred compensation] ends up being what is able to happen, I'm assuming that we'll do whatever it is we can do within the guidelines of the NCAA.”
However, in an interview with USA TODAY Sports last week, Wisconsin athletics director Barry Alvarez indicated that his school might choose not to offer the deferred compensation.
He said he would be discussing the matter with other Big Ten AD’s this week, but he noted his department is now spending an additional $2 million a year to finance cost-of-attendance-based scholarships and another $2 million a year to pay for additional food and snacks that have been allowed since an NCAA rules change in April 2014.
“I think all of us sit back right now – Sept. 1, we start paying full cost of attendance. We've already made the decision on feeding our athletes. … I'm not ready to do anymore right now,” he said. “I'm not prepared to. I don't know what our people would decide but I'm not ready to make that move, if it was available."
Contributing: Erik Brady in Madison, Wis.; Kevin Trahan in Chicago