Ed O’Bannon of UCLA in 1995
NCAA executives met with the Department of Justice’s antitrust chief in November to discuss their plan to change their rules that prevent student athletes from benefiting from their names, according to people familiar with the matter.
Several officials, Including NCAA lead attorney Donald Remy, he met with Makan Delrahim to explain the organization’s views on the issue and his thoughts on the changes he is considering, said the people, who refused to be named because the Conversation was considered confidential. Meanwhile, Delrahim, assistant attorney general of the Department of Justice’s antitrust division, told the NCAA that the antitrust division is following the issue, the people added.
The meeting highlights the growing political pressure facing the NCAA to change a system that critics have argued that is unfair or even similar to pricing, which puts it in a possible violation of federal antitrust laws. State governments threaten to force change over the NCAA through legislation. But the DOJ spectrum that files a lawsuit against the organization, if desired, puts a powerful eye on the NCAA as it formulates its policies.
The existing NCAA policy prohibits student athletes from making money with their name, image or image through opportunities such as paid sponsorships. That is even when the NCAA earns money by promoting the games their athletes pay for, and those athletes run the risk of suffering injuries that put their future income potential at stake. The nonprofit institution represents more than 1,000 schools and receives $ 1 billion a year, more than 3/4 of which come from the marketing and television rights of the Division 1 men’s basketball championship. The best coaches University students can earn millions annually.
The NCAA has recognized the need to modernize its policies. But he has also said that he intends to protect student athletes from becoming money-driven employees, rather than students focused on education. The organization does not want student athletes to benefit from special treatment.
In September, California became the first state to pass a law that annulled the NCAA, granting university athletes the right to paid agreements and sponsorship agents. The law takes effect in 2023. Representatives of states such as Ohio, Colorado, Florida and Illinois have indicated that they will advance legislation directed to NCAA policies.
President Donald Trump has not publicly intervened on the matter, but he is paying attention, an important help from the White House told CNBC. Trump, a football fan, attended the National Football Playoff Championship in New Orleans on Monday night with a big ovation.
This is what happened at the meeting.
The meeting between the NCAA and the Department of Justice took place at the Department of Justice in November, shortly after the NCAA announced its April deadline to reveal the next steps in the matter, said one of the people familiar with the matter . It happened after the NCAA Board of Governors warned California that its bill could cause the state’s 58 NCAA schools not to compete in NCAA competitions, an announcement that caught the attention of the Department of Justice said one of the people familiar with the conversations. That threat has not come to fruition.
NCAA representatives told the Department of Justice that it does not support the California bill, nor any state law that would create the regulation of the mosaic, said one of the people familiar with the talks.
The organization He answered questions from the Justice Department about the line he hopes to draw regarding the athletes who pay, said one of the people familiar with the talks. The NCAA said it will take months to develop its guidelines, as it receives comments from interested parties, including student athletes, coaches, presidents and teachers.
The NCAA said it wants any new policy it implements to be consistent with its statutes, which focus on “amateurism” and “a clear line of demarcation between college athletics and professional sports.” The new policies could allow different guidelines for each of the three divisions of the NCAA, although they are still guided by a general framework.
People familiar with the matter differed in characterizing the tone of the November meeting.
A person familiar with the Department of Justice’s thinking said that, at the meeting, the antitrust chief warned NCAA representatives that if he announces new policies in April, the Department of Justice considers anti-competitive, the department is willing to take action adequate.
That person did not say what action this action might involve, but the Department of Justice has a history of filing lawsuits against educational institutions that he believes are acting anticompetitively. He announced in December a civil lawsuit and an agreement with the National Association of Admission Counseling to the University on recruitment policies, such as offering preference to applicants for early decisions.
The department could also join existing litigation, such as an ongoing lawsuit against the NCAA for its scholarship policies, legal experts said.
However, a person familiar with the NCAA’s thinking said the NCAA did not consider their meeting with the Department of Justice as a warning. Instead, the source said the organization saw the meeting as an opportunity to better explain its governance and procedures.
The person said that the NCAA contacted the Department of Justice after public comments Delrahim made about the policies of the NCAA, including a speech he delivered in August 2018 at the Law School of Notre Dame.
In those comments, Delrahim referred to a class action lawsuit filed by former UCLA basketball star Ed O’Bannon, who claimed that NCAA policies violated antitrust laws. A trial court ruled that the NCAA had violated the antitrust law, a decision that was confirmed by the Ninth Circuit, although the court limited the scope of its appeal.
In Notre Dame, Delrahim called amateurism a “laudable goal,” but he said it in itself “does not grant antitrust immunity, and the rules designed to promote amateurism must be carefully adapted so as not to unreasonably limit competition.”
Delrahim said he expected the NCAA to “implement new rules or modify existing ones” to promote competition for student athletes. As an example, he said he wanted to see schools compete for athletes through incentives such as postgraduate education enrollment and job training.
“Our antitrust laws promote vigorous competition and are flexible enough to take into account amateurism as one of the many features of the market that can boost the demand for college sports,” said Delrahim.