With the emergence and increase of player protection rights, the NCAA has struggled with navigating players’ compensation and NIL rights. NIL — or the rights associated with one’s name, image, and likeness — has impacted the sports industry for years, as players have taken legal action to seek financial compensation for the use of their NIL. With the violation of antitrust laws, licensing agreements, and trademarks in games, there has been a substantial shift in how player rights are determined. Previously categorized and given amateur athlete status, players were subject to restrictions which prevented them from acquiring economic benefit from anything NIL related. Federal and state laws also differed, and impactful lawsuits have set forth precedent in protecting athletes’ rights. After a decade-long break, EA Sports will now bring back its substantially popular game under a new name: RA Sports College Football. With a 2024 expected release date, the professional world will continue to analyze how player NIL and intellectual property rights will be used and protected.
No longer are the days of EA Sports’ (“EA”) lawyers and executives laboring over how to monetize a video game based on college football while not paying college athletes. This challenge resulted in a ten-year hiatus from distributing one of its marquee titles. While this rhetoric may paint EA in a negative light, the reality of the aforementioned challenge was that EA was prohibited from compensating the athletes it sought to animate in its games. EA’s solution at the time was to simply leave out player names. For example, in the last produced NCAA Football game, which was released in 2014, a player like Jadaveon Clowney (arguably the best defensive rusher in college football for a generation) was listed as “#7 DE” for the University of South Carolina. EA understood the value of including the likeness of players in its game to simulate realism, permitting players to really immerse themselves in the atmosphere of Division I College Football. With that understanding, EA actually had real player models with real names hidden in the games code. EA’s persistent attempts to include real college players, down to their facial structures and on-field stats and abilities, led it into some legal issues when it was sued by a collection of athletes for illegal use of their NIL in the video game.
Sherman Antitrust & NIL
The landscape changing case for college athletes' relationship with compensation was O’Bannon v. NCAA. 802 F.3d 1049 (9th Cir. 2015). O’Bannon, alongside nineteen other current and former collegiate athletes, filed suit in federal district court alleging that NCAA’s amateurism rules were a violation of Section 1 of the Sherman Antitrust Act. In determining whether a violation of Section 1 had occurred, courts must first determine that the action regulates a commercial activity. Here, the commercial activity was the monetary gain from the use of players’ names, images, and likenesses. Furthermore, “the plaintiffs established that they suffered injury in fact, and therefore had standing, by showing that, absent the NCAA's rules, video game makers would likely pay them for the right to use their names, images, and likenesses in college sports video games.” O'Bannon, 802 F.3d at 1052. The NCAA sought to defend its rules by putting forward pro-competitive arguments. While the court acknowledged such arguments, it did not exempt the NCAA from antitrust scrutiny. Id.
“On Friday, August 8, 2014, . . . Federal District Court Judge Claudia Wilken ruled that the NCAA’s rules prohibiting athletes from being paid for use of their names, images and likeness were an unreasonable restraint of trade in violation of the Antitrust laws.”
While the ruling appears to have opened the door for athletes to monetize their names, images, and likenesses, the official change did not occur until seven years later in 2021, when NCAA v. Alston was decided. Nat’l Collegiate Athletic Ass’n v. Alston, 141 S. Ct. 2141 (2021). Restraints on monetizing NIL remained after O’Bannon, with the only material changes being institutions' newly acquired ability to provide scholarships up to the total cost of attendance and limitations on educated-related compensation being struck down. Once the court in Alston determined that “rules limiting education-related compensation violated section 1 of the Sherman Act,” the NCAA soon after voted to permit student athletes to monetize their names, images, and likenesses. This board decision marks a major change in how a company like EA can approach developing and distributing games featuring collegiate athletes. While, college athletes remain “amateurs” in the sense that they may not be paid salaries for their athletic contributions to their schools, they can now monetize their names, images, and likenesses.
A Touch of Amateurism Remains
The July 2021 removal of the NCAA player compensation ban has changed the landscape of college athletics and NIL guidelines. With this ban, forty-three states have either passed or are considering enacting legislation that regulates or addresses how student-athletes can profit from their NIL, twenty-four of which were in effect as of July 2022. Along with state legislation, schools are implementing their own NIL policies that will govern “in addition to the NCAA’s interim policy and any applicable state law.” There are reporting requirements in place for student-athletes partaking in NIL activities. Amateurism remains apparent in this way, as well as in the way students are able to cash in on these new NIL rights.
The individual players and their agreements made in regard to their NIL rights determine how or if a player can even opt into the new EA college football video game. Many players will sign over their NIL rights to a collective, which could then lead to three or four large companies or collectives representing different groups of athletes. These companies/collectives would then have to be offered opt-in deals for the game for their groups of athletes. Payment for student-athletes will then heavily rely on the individual deals that the athlete or the athlete’s representation will reach with the entity seeking to use their NIL. Some college athletes have signed exclusive deals with these collectives. Others have only granted rights to specific aspects of their NIL, like through exclusive signature rights associated with specifically trading cards.
You may wonder how this differs from professional sports, such as NFL football and its relationship with Madden. Obtaining rights to NFL players is far simpler because professional football players have group representation through their players union, the NFLPA. The union is the single entity that does the work to get the individuals to opt-in or out of this agreement. All of the players that have opted in get paid the same amount for being in the game, with a few rare exceptions, like cover athletes.
While this is a huge step for ensuring that college athletes are properly compensated, it also marks the resurgence of one of the most popular video games of all time. Avid video gamers are able to compete with their favorite college athletes, and not have to wonder who “#7 DE” is on South Carolina.
*The views expressed in this article do not represent the views of Santa Clara University.
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