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Four reasons why there will be no O'Bannon-NCAA lawsuit settlement

Mark Lewis, the NCAA’s executive vice president for championships and alliances, had strong words regarding the prospect of avoiding a trial in the Ed O’Bannon case for CBS Sports’s Dennis Dodd:

We’ve all drawn our swords.

O'Bannon (AP)

Most of the questions regarding a settlement have been for the NCAA. The lawsuit has gone so poorly for the association that surviving a summary judgment motion as the defendant was a significant victory.

Winning on the damages class certification motion seems like a miracle. Why not get out of this case, avoid a trial on hostile territory, and live to fight another day?

The answer is more complex than the NCAA simply being stubborn, too attached to amateurism, or even evil.

Numerous factors made an early settlement unlikely and have made a last-minute agreement to avoid a trial impossible.

1. The O’Bannon case is not just about recovery

From its inception, the O’Bannon case was not simply about the most fundamental point of civil litigation: one party seeking compensation for a wrong committed by another. The case has always been activist litigation, using the court system to get a rule or law changed. Beyond the desire to force change upon the NCAA, something else is driving the case, as revealed by Sonny Vaccaro to Jon Solomon of last year about the moment he realized the O’Bannon lawsuit had to happen:

“On the podium that day were some of the most respected guys in sports – Hall of Fame people. In the public’s eye all too often we think people in high positions don’t have agendas, and I see it differently. This is what Thursday means to me. They were controlling these kids who they had no right to control.”

There is a desire to strip the NCAA and its leaders of power rather than just change some rules. The plaintiffs, their advisors, and lawyers are not simply looking to make a buck on the case. There are deeper motivations that cannot be addressed by any settlement.

NCAA czar Mark Emmert (AP Photo)

2. The NCAA is not willing to go far enough in its settlement offers



If that is where the NCAA has to go to even get settlement talks moving, it has no motivation. That is less a settlement and more a capitulation, and would much more likely after the NCAA loses at trial. Then the NCAA is not conceding anything and the plaintiffs might still be motivated to negotiate over the television split to lock in their win rather than risk it on appeal.

3. The NCAA has gone too far in its own reform efforts

Imagine the NCAA put on the table what could be considered its best offer: a big settlement fund, various rule changes, and adoption of an “Olympic” model for athlete likenesses. That seems like a significant victory for the O’Bannon plaintiffs right?

The problem is that the NCAA seems poised to adopt all those rule changes, maybe even allowing athletes to profit off their likeness, by the time the O’Bannon plaintiffs win a final victory in the Supreme Court, which could be years from now. In Dodd’s piece above, Lewis mentioned a race to reform the NCAA between the NCAA itself and the legal challengers. But that is a race the NCAA cannot win, or at least one its opponents will never acknowledge it has won. Instead the steps the NCAA takes are not seen as the organization coming around and reforming, but as victories by the outside agents which gives them motivation to press for ever greater changes.

Even if they lose at trial, the O’Bannon plaintiffs are still likely to get most of what the NCAA would offer as a settlement, and maybe even the settlement fund as well for the same reason the plaintiffs might still cut a deal if they win, to avoid losing that victory on appeal. This reinforces the idea that the plaintiffs should not be willing to settle unless the NCAA concedes the central issue in the case.

4. The NCAA cannot settle the entire case once and for all

Denial of the motion to certify the damages class was one of the NCAA’s biggest victories in the O’Bannon case to date. But while it limits (for the moment) the NCAA’s financial exposure in the case, it reduces the benefits of a settlement for the NCAA. Even if the NCAA settles with the injunctive class, it would still be open to individual lawsuits from former players, potentially death by a thousand (treble damages) paper cuts. If the NCAA were not careful, a settlement might even end up funding those cases.

Even if the NCAA could settle with the damages class, it can only keep the wolves at bay temporarily. The White Case is instructive. The NCAA settled that class action suit regarding the gap between a full grant-in-aid and cost-of-attendance in 2008. Shortly after the settlement agreement expired following the 2012–13 academic year, another class action was filed over the same issue this year.

If this set of plaintiffs were willing to settle without touching television money, the next set of plaintiffs would file the O’Bannon case all over again as soon as the settlement ran out. Like with cost-of-attendance scholarships, all a settlement does is buy time. Maybe that is enough for the NCAA to come up with a way to share revenue with athletes on its own terms or to get a legislative solution to the case. But the only way for the NCAA to be rid of this issue now is to win the case. Settling only delays the fight for a few years.

For all these reasons, it is unlikely that a settlement will occur before the trial in June even if it seems like both parties could come away more or less with what they wanted. The NCAA and its member’s television revenue could be protected while athletes might be free to profit off their likenesses and/or get paid by schools in other way, in addition to millions of dollars for former athletes and other changes to NCAA rules. But since a settlement gives neither side the vindication it seeks, someone is going to have to win and someone is going to have to lose before real negotiation is possible.

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