Yesterday, an anti-trust expert testified in the Ed O’Bannon trial that the National Collegiate Athletic Association’s agreement with its member conferences to not pay wages to student athletes is a joint venture, as opposed to a cartel. Daniel Rubinfeld, a professor at the New York University School of Law, testified on behalf of the NCAA that the lack of wages creates benefits for both teams and fans. However, Rubinfeld did acknowledge that forbidding student athletes from licensing their likenesses could be seen as a restraint of trade.
Consultant Lauren Stiroh also testified yesterday as an anti-trust expert on behalf of the NCAA.
“If a cartel is successful in raising prices, it’s successful in reducing quantity; they go together. If you force the price up, people buy less,” Stiroh testified. But that hasn’t happened among the NCAA and its members, so it doesn’t create an antitrust harm, she said.
The NCAA has already settled out of part of this case, as has Electronic Arts. We will keep you posted as the trial continues.