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NBA Legend Bill Russell Challenges NCAA In Court

Posted  October 14, 2011

Basketball legend Bill Russell, who led the Boston Celtics dynasty that dominated the NBA in the 1960s, is charging down court once again, but this time it’s in a federal – not a basketball – court.

The former basketball star at the University of San Francisco, five-time winner of the NBA Most Valuable Player Award and a 12-time All-Star, is suing the NCAA, the Collegiate Licensing Company (“CLC”) and Electronic Arts, Inc. (“EA”), claiming that they are violating federal antitrust laws with licensing practices that enable them to profit from college basketball players’ likenesses long after they’ve left college.

The complaint in Russell v. NCAA, which was filed in federal court in the Northern District of California, alleges that the defendants violated Section 1 of the Sherman Act by engaging in a price-fixing conspiracy and a boycott that “unlawfully foreclosed class members from receiving compensation in connection with the commercial exploitation of their images, likeness and/or names following their cessation of intercollegiate athletic competition.”

The complaint claims that the defendants’ practices of having student-athletes contract away their rights to the commercial use of their images is the product of an anticompetitive conspiracy and results in unjust enrichment, entitling the plaintiff to damages and injunctive relief.  Russell is challenging the validity of the form used to achieve the transfer of rights.

The market for collegiate merchandise is significant.  The complaint cites the CLC website for the proposition that “there is a ‘$4.0 billion annual market for collegiate licensed merchandise.’”  Russell claims that while the defendants continue to reap financial benefits from players’ participation in collegiate sports, even former players are “foreclosed from participating or sharing” in the “commercial benefits from the sale and use of the players’ images,” notwithstanding the fact that the players have moved on from their respective collegiate careers.

The complaint focuses on the development of EA’s video games, such as “NCAA Basketball” and “NCAA Football,” which incorporate “photorealistic” graphics of players and venues.

The suit is being brought as a class action under Rules 23(b)(2) and (b)(3) of the Federal Rules of Civil Procedure.  Russell is the putative representative of two classes: one class of certain former student-athletes (for purposes of antitrust damages and injunctive relief), and one class of certain current and former student-athletes (for purposes of declaratory and injunctive relief).

This is the latest chapter in the perennial debate over the propriety of compensating collegiate athletes.  The complaint references a number of such pending litigations in California state and federal courts, including In re NCAA Student-Athlete Name & Likeness Licensing Litigation, and suggests the possibility of consolidation.

Tagged in: Antitrust Litigation, Price Fixing,