In a landmark victory for college athletes, a federal judge in Oakland on Friday ruled the NCAA violated antitrust laws by blocking major college football and men's basketball players from receiving compensation in their sports.
U.S. District Judge Claudia Wilken's decision cleared the way for the first time for student athletes to share in the billions of dollars of revenue generated from major college sports.
The ruling comes six weeks after former UCLA basketball standout Ed O'Bannon and others faced off with the NCAA in federal court in a lawsuit that challenged the association's iron-fisted rule. The judge determined that the NCAA cannot stop college football and basketball players from selling the rights to their names and likenesses -- the specific rule that O'Bannon challenged -- and opened the way to athletes receiving payouts once their college careers are finished.
But while the decision was a major blow to the NCAA -- and could open the door to demands from more athletes from other sports -- it is limited in scope: Wilken's injunction ruled that the NCAA could set a cap of at least $5,000 annually on the money paid to athletes, in addition to their scholarships. That money would be placed in a trust while the athletes are still playing.
The ruling does not affect any prospective student-athletes who will enroll in college before July 1, 2016, and it doesn't suggest athletes should be compensated while still in college, an issue that has been hotly debated in recent months.
Wilken, who oversaw the closely watched, three-week trial in June, wrote: "The Court finds that the challenged NCAA rules unreasonably restrain trade in the market for certain educational and athletic opportunities offered by NCAA Division I schools."
Read between the lines of the legal language and there was a clear statement: Athletes are entitled to more compensation than the NCAA historically has been willing to allow.
The NCAA, whose brand of amateurism has been under siege in recent years, was seen as the clear underdog in this round of what already has been a five-year legal fight.
In a statement, the NCAA's top attorney voiced disappointment in the ruling.
"We disagree with the Court's decision that NCAA rules violate antitrust laws," said Donald Remy, the association's chief legal officer. "We note that the Court's decision sets limits on compensation, but are reviewing the full decision and will provide further comment later."
A spokesman for the Pac-12 Conference, which represents Bay Area universities Stanford and Cal, said the league would decline to comment until officials have more time to review the ruling.
Rutgers law professor Michael Carrier, a specialist in antitrust and intellectual property law, said he does not see this as a game-changing decision that would significantly alter major-college athletics as they currently are operated.
"They're just giving the plaintiffs a little piece of the money many people would view them as entitled to," Carrier said. "I don't think it will put college athletics out of existence."
And it's certainly not going break budgets. Cal and Stanford and all other schools in the Pac-12 receive an average of $21 million per year from its TV contract over the course of a 12-year deal. With a $5,000-per player cap, each school would have to set aside less than $500,000 a year to cover the compensation for its football and men's basketball players.
O'Bannon, who was MVP of the 1995 UCLA national championship basketball team, said he signed on as lead plaintiff after seeing his image in a video game authorized by the NCAA that he was not paid for.
Wilken was not asked to rule on the fairness of a system that pays almost everyone but the athletes themselves. Instead, the case was centered on federal antitrust law and whether the prohibition against paying players promotes the game of college football and does not restrain competition in the marketplace.
Staff writers Jon Wilner and Katy Murphy and The Associated Press contributed to this report.