A federal appeals court struck down a lower court’s ruling ordering colleges and universities pay college athletes $5,000 a year for the right to use their likenesses and names in sports department merchandising.
In its Wednesday decision, the U.S. 9th Circuit Court of Appeals did find that anti-trust rules should apply to the NCAA and did agree with many of the rulings issued by a lower court last year. But it struck down the payments scheme by saying that the lower court’s decision to demand money “in deferred compensation” was “erroneous.”
The decision stated that the 9th Circuit agrees with the district court that the compensation rules have a significant anticompetitive effect on the college education market, but still struck down the cash payments.
“In our judgment, however, the district court clearly erred in finding it a viable alternative to allow students to receive NIL cash payments untethered to their education expenses,” the ruling states.
The court then noted that “in finding that paying students cash compensation would promote amateurism as effectively as not paying them, the district court ignored that not paying student-athletes is precisely what makes them amateurs.” (Italics in original)
For its part, the NCAA also released a statement celebrating the ruling.
We have not completely reviewed the court’s 78-page decision, but we agree with the court that the injunction “allowing students to be paid cash compensation of up to $5,000 per year was erroneous.” Since Aug. 1, the NCAA has allowed member schools to provide up to full cost of attendance; however, we disagree that it should be mandated by the courts.
Initial NCAA statement regarding O’Bannon decision: pic.twitter.com/qk9hc8OBqn
— NCAA (@NCAA) September 30, 2015
So, at least for now, colleges and universities will not have to budget $5,000 to pay football and basketball players to use their likenesses or names in advertising, jersey sales, bobblehead dolls, or any other such merchandise.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at email@example.com