O'Bannon v. NCAA

Based on Wikipedia: O'Bannon v. NCAA

The Video Game That Changed College Sports Forever

Ed O'Bannon was just browsing through a friend's house in 2008 when something stopped him cold. There on the television screen, in a college basketball video game, was a player who looked exactly like him. Same bald head. Same height and weight. Same left-handed shot. Same number 31 jersey. Same power forward position at UCLA.

The only thing missing was his name.

O'Bannon hadn't touched a college basketball in over a decade. He'd been the star of UCLA's 1995 national championship team—the tournament's Most Outstanding Player, in fact—and had moved on to a brief professional career before settling into life after basketball. Yet here was Electronic Arts, or EA Sports as most gamers know them, selling a video game that featured what was unmistakably his digital twin.

Nobody had asked his permission. Nobody had offered him a dime.

What happened next would reshape the entire landscape of college athletics, unleashing billions of dollars that had been locked away from the very people who made college sports worth watching in the first place.

The Amateur Myth

To understand why O'Bannon's discovery mattered, you need to understand the peculiar fiction at the heart of American college sports. The National Collegiate Athletic Association—the NCAA—had spent over a century building and defending the concept of "amateurism." Under this framework, college athletes were students first, athletes second, and paid professionals never.

The reasoning went something like this: college sports derived their special character from the fact that the players weren't mercenaries. They played for school pride, for the love of the game, for the chance at an education. Paying them would corrupt all of that.

There was just one problem with this noble-sounding philosophy. It applied only to the athletes.

Coaches made millions. Athletic directors made millions. Television networks paid billions for broadcast rights. Apparel companies splashed their logos across every available surface. Universities built palatial stadiums and state-of-the-art training facilities. Video game companies sold digital recreations of real players and real teams.

Everyone got rich except the people whose talent made the whole enterprise valuable.

The NCAA had an answer for this apparent contradiction, and they repeated it like a mantra: the athletes were being compensated. They received scholarships covering tuition, room, and board. That was their payment. Anything more would transform them from amateur student-athletes into professional employees, and that transformation would somehow destroy the magic.

Building a Case

O'Bannon agreed to become the lead plaintiff in a lawsuit that would challenge this entire system. Filed in July 2009, the case targeted the NCAA and the Collegiate Licensing Company, arguing that the organization's rules violated the Sherman Antitrust Act—a law passed back in 1890 to break up monopolies and prevent businesses from conspiring to fix prices or restrain trade.

The legal theory was elegant in its simplicity. The NCAA was essentially a cartel. All the major universities had agreed, through their membership in the organization, to abide by rules that prevented any of them from paying athletes. No school could offer more than the standard scholarship package, no matter how valuable a particular player might be. This was textbook price-fixing, the plaintiffs argued—the exact kind of anticompetitive behavior that antitrust law was designed to prevent.

The case gathered momentum. In January 2011, Oscar Robertson joined as a plaintiff. Robertson was no ordinary former player. He'd been one of basketball's greatest guards, a Hall of Famer who averaged a triple-double for an entire season before the phrase "triple-double" even existed. Bill Russell—eleven championship rings, five Most Valuable Player awards, the man who made the Boston Celtics a dynasty—added his name as well. Eventually twenty former college athletes signed on.

These weren't obscure complainers with axes to grind. These were legends of American sports, lending their credibility to a legal challenge against one of the most powerful organizations in athletics.

The Trial

The case went to trial in June 2014, stretching across nearly three weeks of testimony and evidence. At stake were questions that went far beyond video game royalties. The plaintiffs were challenging whether the NCAA could legally prevent athletes from receiving any compensation beyond scholarships—whether for video games, television broadcasts, merchandise, or anything else that traded on their names, images, and likenesses.

Billions of dollars hung in the balance. Television contracts alone brought in staggering sums. The NCAA's March Madness basketball tournament commanded rights fees measured in the hundreds of millions annually. Football bowl games and conferences had their own lucrative arrangements. Licensing deals generated yet more revenue.

All of it flowed around the athletes, never to them.

Judge Claudia Wilken presided over the proceedings in federal district court. On August 8, 2014, she delivered her verdict.

The NCAA lost.

A Crack in the Foundation

Wilken's ruling was measured but devastating. She found that the NCAA's rules and bylaws operated as an unreasonable restraint of trade, violating antitrust law. The organization had been suppressing compensation that would otherwise exist in a competitive market.

The judge didn't order the NCAA to tear down its entire system overnight. Instead, she crafted a remedy in two parts. First, schools should be allowed to offer what are called "cost-of-attendance" scholarships. These would cover living expenses beyond basic tuition, room, and board—things like transportation home, clothing, and other ordinary costs of life that existing scholarships left athletes to cover on their own.

Second—and this was the bombshell—colleges should be permitted to set aside up to five thousand dollars per year for each athlete, to be held in trust until after they left school. This money would compensate players specifically for the use of their names, images, and likenesses.

Five thousand dollars per year might sound modest compared to the billions sloshing around college sports. But the principle was revolutionary. For the first time, a federal court had said that paying college athletes wasn't just permitted—it was required by law, at least if you wanted to keep using their identities to make money.

The Appeal

The NCAA wasn't ready to accept this new reality. The organization appealed to the Ninth Circuit Court of Appeals, arguing that Judge Wilken had misapplied antitrust law and failed to properly consider earlier Supreme Court precedent.

In September 2015, the appeals court issued a mixed decision. It upheld the core finding that the NCAA's rules violated antitrust law and affirmed that cost-of-attendance scholarships must be permitted. But it struck down the five-thousand-dollar trust fund provision, calling it an improper judicial invention that went beyond what was necessary to remedy the antitrust violation.

Both sides were partially dissatisfied. O'Bannon's legal team pushed for Supreme Court review, hoping to restore the cash payments. The petition was filed in March 2016.

The Supreme Court declined to hear the case, effectively ending O'Bannon's direct legal journey. But the lawsuit had already accomplished something profound. It had established that the NCAA's amateurism rules were not immune from antitrust scrutiny. The organization could no longer simply invoke tradition and philosophy to justify restraints on athlete compensation.

The Dominoes Begin to Fall

O'Bannon opened the floodgates. Other class-action lawsuits followed, each one challenging different aspects of the NCAA's compensation restrictions. Many of these cases landed in Judge Wilken's courtroom, where they were consolidated into a single proceeding.

In March 2019, Wilken ruled against the NCAA again. This time she ordered the organization to allow students to receive various non-cash benefits beyond their scholarships—things like private tutoring, access to special academic programs, internships, and other educational support. The reasoning was clever. These benefits were services that any college could theoretically provide, which meant allowing them wouldn't give wealthy programs an unfair recruiting advantage over smaller schools.

The NCAA appealed once more. The Ninth Circuit upheld the ruling. And this time, when the case reached the Supreme Court under the name National Collegiate Athletic Association v. Alston, the justices agreed to hear it.

Their decision came in June 2021. It was unanimous, and it was scathing.

The Court didn't just rule against the NCAA on the narrow question of educational benefits. Justice Neil Gorsuch's opinion systematically dismantled the organization's legal arguments and openly mocked its pretensions about amateurism. The NCAA, he wrote, was "not above the antitrust laws." Its compensation restrictions were subject to the same scrutiny as any other business practice.

Justice Brett Kavanaugh went even further in a concurring opinion that read like a roadmap for future litigation. The remaining NCAA restrictions on athlete compensation, he suggested, might well be illegal too. "Nowhere else in America," Kavanaugh wrote, "can businesses get away with agreeing not to pay their workers a fair market rate."

A New Era

Two weeks after the Alston decision, on July 1, 2021, the NCAA announced a total reversal of its position on athlete compensation. The organization's board approved new rules allowing college athletes to profit from their names, images, and likenesses—the very thing the NCAA had spent decades and millions of dollars fighting to prevent.

Athletes could now sign endorsement deals. They could appear in advertisements. They could monetize their social media followings. They could work with agents to manage their newfound commercial opportunities.

The transformation was immediate and dramatic. Star quarterbacks signed six-figure deals with local car dealerships. Gymnasts with viral TikTok accounts landed sponsorships. Twin basketball players built a merchandise empire. The market, suppressed for so long, exploded into life.

The Video Games Return

There's a certain poetry to how the story came full circle. EA Sports had abandoned college sports games entirely in the aftermath of O'Bannon. The company stopped making NCAA Basketball after 2009, the very game that had featured O'Bannon's unlicensed likeness. NCAA Football lasted a few years longer, but the final installment appeared in 2013, with the NCAA terminating its licensing agreement with EA amid disputes over royalty rates.

For over a decade, fans who wanted to play college football or basketball video games had no official options. The games that had sparked O'Bannon's lawsuit simply ceased to exist.

Then, in 2024, EA Sports returned to the college football market with a new game: EA Sports College Football 25. This time, the player likenesses were included with permission. This time, the athletes got paid.

Ed O'Bannon's moment of recognition in front of a friend's television had triggered a chain of events spanning fifteen years, reaching the Supreme Court, and fundamentally transforming a multibillion-dollar industry. A system that had survived for over a century crumbled because one former player noticed himself in a video game and decided to do something about it.

The Broader Implications

The O'Bannon case matters beyond college sports because it demonstrates something important about how monopolies maintain themselves—and how they fall.

The NCAA's amateurism rules had acquired an almost sacred quality over the decades. They were wrapped in the language of educational values and athletic purity. They were defended by university presidents and celebrated by fans who genuinely believed that paying college athletes would somehow diminish the games they loved.

But underneath all that rhetoric was a straightforward economic arrangement: powerful institutions had agreed among themselves not to compete for labor. They had created a cartel, dressed it up in the trappings of tradition, and convinced much of the public that this arrangement was not only legal but virtuous.

O'Bannon and his fellow plaintiffs stripped away the mythology and forced courts to examine what the NCAA actually was—a business arrangement among competitors that suppressed wages below what a free market would provide. Once judges started applying the same antitrust principles they would use for any other industry, the system couldn't survive.

This pattern repeats across many contexts. Entrenched interests wrap anticompetitive practices in appealing language. They claim tradition, or public benefit, or special circumstances that supposedly justify arrangements that would be illegal in any other setting. Sometimes these justifications persist for generations.

Until someone files a lawsuit.