FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

EDWARD C. O’BANNON, JR., On

Behalf of Himself and All Others

Similarly Situated,

Plaintiff-Appellee,

v.

NATIONAL COLLEGIATE ATHLETIC

ASSOCIATION, AKA The NCAA,

Defendant-Appellant,

and

ELECTRONIC ARTS, INC.;

COLLEGIATE LICENSING COMPANY,

AKA CLC,

Defendants.

Nos. 14-16601

14-17068

D.C. No.

4:09-cv-03329-

CW

OPINION

Appeal from the United States District Court

for the Northern District of California

Claudia Wilken, Senior District Judge, Presiding

Argued and Submitted

March 17, 2015—San Francisco, California

Filed September 30, 2015
2 O’BANNON V. NCAA

Before: Sidney R. Thomas, Chief Judge, Jay S. Bybee,

Circuit Judge and Gordon J. Quist,* Senior District Judge.

Opinion by Judge Bybee;

Partial Concurrence and Partial Dissent by Chief Judge

Thomas

SUMMARY**

Antitrust

The panel affirmed in part and reversed in part the district

court’s judgment after a bench trial in an antitrust suit

regarding the National Collegiate Athletic Association’s rules

prohibiting student-athletes from being paid for the use of

their names, images, and likenesses.

The district court held that the NCAA’s amateurism rules

were an unlawful restraint of trade in violation of Section 1

of the Sherman Antitrust Act. The district court permanently

enjoined the NCAA from prohibiting its member schools

from giving student-athletes scholarships up to the full cost

of attendance at their respective schools and up to $5,000 per

year in deferred compensation, to be held in trust for studentathletes after they leave college.

* The Honorable Gordon J. Quist, Senior District Judge for the U.S.

District Court for the Western District of Michigan, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
O’BANNON V. NCAA 3

The panel held that it was not precluded from reaching the

merits of plaintiffs’ Sherman Act claim because: (1) the

Supreme Court did not hold in NCAA v. Bd. of Regents of the

Univ. of Okla., 468 U.S. 85 (1984), that the NCAA’s

amateurism rules are valid as a matter of law; (2) the rules are

subject to the Sherman Act because they regulate commercial

activity; and (3) the plaintiffs established that they suffered

injury in fact, and therefore had standing, by showing that,

absent the NCAA’s rules, video game makers would likely

pay them for the right to use their names, images, and

likenesses in college sports video games.

The panel held that even though many of the NCAA’s

rules were likely to be procompetitive, they were not exempt

from antitrust scrutiny and must be analyzed under the Rule

of Reason. Applying the Rule of Reason, the panel held that

the NCAA’s rules had significant anticompetitive effects

within the college education market, in that they fixed an

aspect of the “price” that recruits pay to attend college. The

record supported the district court’s finding that the rules

served the procompetitive purposes of integrating academics

with athletics and preserving the popularity of the NCAA’s

product by promoting its current understanding of

amateurism. The panel concluded that the district court

identified one proper less restrictive alternative to the current

NCAA rules ̄i.e., allowing NCAA member to give

scholarships up to the full cost of attendance ̄but the district

court’s other remedy, allowing students to be paid cash

compensation of up to $5,000 per year, was erroneous. The

panel vacated the district court’s judgment and permanent

injunction insofar as they required the NCAA to allow its

member schools to pay student-athletes up to $5,000 per year

in deferred compensation.
4 O’BANNON V. NCAA

Chief Judge Thomas concurred in part and dissented in

part. He disagreed with the majority’s conclusion that the

district court clearly erred in ordering the NCAA to permit up

to $5,000 in deferred compensation above student-athletes’

full cost of attendance.

COUNSEL

Seth P. Waxman (argued), Leon B. Greenfield, Daniel S.

Volchok, David M. Lehn, Weili J. Shaw, Matthew J. Tokson,

Wilmer Cutler Pickering Hale and Dorr LLP, Washington,

D.C.; Glenn D. Pomerantz, Kelly M. Klaus, Luis Li, Rohit K.

Singla, Carolyn H. Luedtke, Thane Rehn, Justin P. Raphael,

Jeslyn A. Miller, Munger, Tolles, & Olson LLP, San

Francisco, California; Gregory L. Curtner, Robert J.

Wierenga, Kimberly K. Kefalas, Suzanne L. Wahl, Schiff

Hardin LLP, Ann Arbor, Michigan, for Defendant-Appellant.

Michael D. Hausfeld (argued), Hilary K. Scherrer, Sathya S.

Gosselin, Swathi Bojedla, Hausfeld LLP, Washington, D.C.;

Michael P. Lehmann, Bruce Wecker, Hausfeld LLP, San

Francisco, California; Jonathan Massey, Massey& Gail LLP,

Washington, D.C., for Plaintiffs-Appellees.

Jonathan M. Jacobson, Daniel P. Weick, Wilson Sonsini

Goodrich & Rosati Professional Corporation, New York,

New York, for Amici Curiae Antitrust Scholars.

Allen P. Grunes, Maurice E. Stucke, The Konkurrenz Group,

Washington, D.C., for Amici Curiae Law and Economics and

Antitrust Scholars.
O’BANNON V. NCAA 5

Nathan Siegel, Patrick Kabat, Levine Sullivan Koch &

Schulz, LLP, Washington, D.C., for Amici Curiae A&E

Television Networks, LLC, ABC, Inc., CBS Corporation,

Discovery Communications, LLC, Fox Broadcasting

Company, National PublicRadio,Inc.,NBCUniversal Media,

LLC, The Reporter’s Committee for Freedom of the Press,

and Turner Broadcasting System, Inc.

Martin Michaelson, William L. Monts III, Joel D. Buckman,

Hogan Lovells US LLP, Washington, D.C.; Ada Meloy,

General Counsel, American Council on Education,

Washington, D.C., for Amici Curiae American Council on

Education, Association of Governing Boards of Universities

and Colleges, and National Association of Independent

Colleges and Universities.

Duncan W. Crabtree-Ireland, Danielle S. Van Lier, Screen

Actors Guild-American Federation of Television and Radio

Artists, Los Angeles, California; Jonathan Faber, Luminary

Group LLC, Shelbyville, Indiana, for Amici Curiae Screen

Actors Guild-American Federation of Television & Radio

Artists and Luminary Group LLC.

James B. Speta, Chicago, Illinois; Ernest A. Young, Apex,

North Carolina, for Amici Curiae Intellectual Property and

First Amendment Scholars.

Steve W. Berman, Hagens Berman Sobol Shapiro LLP,

Seattle, Washington; Jeff D. Friedman, Jon T. King, Hagens

Berman Sobol Shapiro LLP, Berkeley, California, for Amicus

Curiae Alston Kindler Group.
6 O’BANNON V. NCAA

Jeffrey L. Kessler, David G. Feher, David L. Greenspan,

Timothy M. Nevius, Joseph A. Litman, Winston & Strawn

LLP, New York, New York; Steffen N. Johnson, Winston &

Strawn LLP, Washington, D.C.; Derek J. Sarafa, Winston &

Strawn LLP, Chicago, Illinois, for Amici Curiae Martin

Jenkins, Nigel Hayes, and Alec James.

Steven N. Williams, Adam J. Zapala, Cotchett, Pitre &

McCarthy, LLP, Burlingame, California, for Amici Curiae

Economists and Professors of Sports Management.

Richard G. Johnson, Richard G. Johnson Co., L.P.A.,

Cleveland, Ohio, for Amicus Curiae Andrew A. Oliver.

Michael J. Boni, Joshua D. Snyder, John E. Sindoni, Boni &

Zack LLC, Bala Cynwyd, Pennsylvania, for Amici Curiae

Sports Management Professors.

David Martinez, Robins Kaplan LLP, Los Angeles,

California, for Amici Curiae Twenty-Six Scholars of

Antitrust and Sports Law.
O’BANNON V. NCAA 7

OPINION

BYBEE, Circuit Judge:

Section 1 of the Sherman Antitrust Act of 1890, 15 U.S.C.

§ 1, prohibits “[e]very contract, combination . . . , or

conspiracy, in restraint of trade or commerce.” For more than

a century, the National Collegiate Athletic Association

(NCAA) has prescribed rules governing the eligibility of

athletes at its more than 1,000 member colleges and

universities. Those rules prohibit student-athletes from being

paid for the use of their names, images, and likenesses

(NILs). The question presented in this momentous case is

whether the NCAA’s rules are subject to the antitrust laws

and, if so, whether they are an unlawful restraint of trade.

After a bench trial and in a thorough opinion, the district

court concluded that the NCAA’s compensation rules were an

unlawful restraint of trade. It then enjoined the NCAA from

prohibiting its member schools from giving student-athletes

scholarships up to the full cost of attendance at their

respective schools and up to $5,000 per year in deferred

compensation, to be held in trust for student-athletes until

after they leave college. As far as we are aware, the district

court’s decision is the first by any federal court to hold that

any aspect of the NCAA’s amateurism rules violate the

antitrust laws, let alone to mandate by injunction that the

NCAA change its practices.

We conclude that the district court’s decision was largely

correct. Although we agree with the Supreme Court and our

sister circuits that many of the NCAA’s amateurism rules are

likely to be procompetitive, we hold that those rules are not

exempt from antitrust scrutiny; rather, they must be analyzed
8 O’BANNON V. NCAA

under the Rule of Reason. Applying the Rule of Reason, we

conclude that the district court correctly identified one proper

alternative to the current NCAA compensation rules—i.e.,

allowing NCAA members to give scholarships up to the full

cost of attendance—but that the district court’s other remedy,

allowing students to be paid cash compensation of up to

$5,000 per year, was erroneous. We therefore affirm in part

and reverse in part.

I

A. The NCAA

American colleges and universities have been competing

in sports for nearly 150 years: the era of intercollegiate

athletics began, by most accounts, on November 6, 1869,

when Rutgers and Princeton met in the first college football

game in American history—a game more akin to soccer than

to modern American football, played with “25 men to a side.” 

Joseph N. Crowley, In the Arena: The NCAA’s First Century

2 (2006), available at https://www.ncaapublications.com/p4039-in-the-arena-the-ncaas-first-century.aspx. College

football quickly grew in popularityover the next few decades.

Fin de siècle college football was a rough game. Serious

injuries were common, and it was not unheard of for players

to be killed during games. Schools were also free to hire

nonstudent ringers to compete on their teams or to purchase

players away from other schools. By 1905, these and other

problems had brought college football to a moment of crisis,

and President Theodore Roosevelt convened a conference at

the White House to address the issue of injuries in college

football. Later that year, the presidents of 62 colleges and

universities founded the Intercollegiate Athletic Association
O’BANNON V. NCAA 9

to create uniform rules for college football. In 1910, the IAA

changed its name to the National Collegiate Athletic

Association (NCAA), and it has kept that name to this day.

The NCAA has grown to include some 1,100 member

schools, organized into three divisions: Division I, Division

II, and Division III. Division I schools are those with the

largest athletic programs—schools must sponsor at least

fourteen varsity sports teams to qualify for Division I—and

they provide the most financial aid to student-athletes. 

Division I has about 350 members.

For football competition only, Division I’s membership

is divided into two subdivisions: the Football Bowl

Subdivision (FBS) and the Football Championship

Subdivision (FCS). FBS schools are permitted to offer more

full scholarships to their football players and, as a result, the

level of competition is generally higher in FBS than in FCS. 

FBS consists of about 120 of the nation’s premier college

football schools.

B. The Amateurism Rules

One of the NCAA’s earliest reforms of intercollegiate

sports was a requirement that the participants be amateurs. 

President C.A. Richmond of Union College commented in

1921 that the competition among colleges to acquire the best

players had come to resemble “the contest in dreadnoughts”

that had led to World War I,

1

and the NCAA sought to curb

1 The Dreadnought was a British battleship that featured large, longrange guns. The term came to refer to a class of super battleship. In

drawing this comparison, Mr. Richmond showed himself to be a historian

ahead of his time. See generally Robert K. Massie, Dreadnought: Britain,
10 O’BANNON V. NCAA

this problem by restricting eligibility for college sports to

athletes who received no compensation whatsoever.2 But the

NCAA, still a voluntary organization, lacked the ability to

enforce this requirement effectively, and schools continued to

pay their athletes under the table in a variety of creative ways;

a 1929 study found that 81 out of 112 schools surveyed

provided some sort of improper inducement to their athletes.

The NCAA began to strengthen its enforcement

capabilities in 1948, when it adopted what became known as

the “Sanity Code”—a set of rules that prohibited schools

from giving athletes financial aid that was based on athletic

ability and not available to ordinary students. See Daniel E.

Lazaroff, The NCAA in Its Second Century: Defender of

Amateurism or Antitrust Recidivist?, 86 Or. L. Rev. 329, 333

(2007). The Sanity Code also created a new “compliance

mechanism” to enforce the NCAA’s rules—“a Compliance

Committee that could terminate an institution’s NCAA

membership.” Id.

Germany, and the Coming of the Great War (1991) (explaining how the

naval arms race between Britain and Germany contributed to the outbreak

of World War I).

2 The rise of the NCAA roughly paralleled that of the International

Olympic Committee (IOC) and the Amateur Athletic Union (AAU), both

in time and in philosophy. Like the NCAA, both organizations have had

to adapt to increasing professionalization and commercialization in sports. 

In the late twentieth century, the IOC abandoned its amateurism

experiment. The AAU, meanwhile, continues to operate as a sponsor of

amateur sports programs and tournaments; it is currently best known for

its many boys’ basketball teams, which have struggled to deal with the

influence of professional agents and outside money. See, e.g., Jason

Zengerle, Breaks of the Game, N.Y. Times, Dec. 26, 2010, at BR8 (calling

it “a commonplace for sportswriters to describe A.A.U. basketball as a

cesspool of corruption”).
O’BANNON V. NCAA 11

In 1956, the NCAA departed from the Sanity Code’s

approach to financial aid by changing its rules to permit its

members, for the first time, to give student-athletes

scholarships based on athletic ability. These scholarships

were capped at the amount of a full “grant in aid,” defined as

the total cost of “tuition and fees, room and board, and

required course-related books.” Student-athletes were

prohibited from receiving any “financial aid based on

athletics ability” in excess of the value of a grant-in-aid, on

pain of losing their eligibility for collegiate athletics. Studentathletes could seek additional financial aid not related to their

athletic skills; if they chose to do this, the total amount of

athletic and nonathletic financial aid they received could not

exceed the “cost of attendance” at their respective schools.3

In August 2014, the NCAA announced it would allow

athletic conferences to authorize their member schools to

increase scholarships up to the full cost of attendance. The 80

member schools of the five largest athletic conferences in the

country voted in January 2015 to take that step, and the

scholarship cap at those schools is now at the full cost of

attendance. Marc Tracy, Top Conferences to Allow Aid for

Athletes’ Full Bills, N.Y. Times, Jan. 18, 2015, at SP8.

In addition to its financial aid rules, the NCAA has

adopted numerous other amateurism rules that limit studentathletes’ compensation and their interactions with

professional sports leagues. An athlete can lose his amateur

3

 The “cost of attendance” at a particular school includes the items that

make up a grant in aid plus “[nonrequired] books and supplies,

transportation, and other expenses related to attendance at the institution.” 

The difference between a grant in aid and the cost of attendance is a few

thousand dollars at most schools.
12 O’BANNON V. NCAA

status, for example, if he signs a contract with a professional

team, enters a professional league’s player draft, or hires an

agent. And, most importantly, an athlete is prohibited—with

few exceptions—from receiving any “pay” based on his

athletic ability, whether from boosters, companies seeking

endorsements, or would-be licensors of the athlete’s name,

image, and likeness (NIL).

C. The O’Bannon and Keller Litigation

In 2008, Ed O’Bannon, a former All-American basketball

player at UCLA, visited a friend’s house, where his friend’s

son told O’Bannon that he was depicted in a college

basketball video game produced by Electronic Arts (EA), a

software company that produced video games based on

college football and men’s basketball from the late 1990s

until around 2013. The friend’s son turned on the video

game, and O’Bannon saw an avatar of himself—a virtual

player who visually resembled O’Bannon, played for UCLA,

and wore O’Bannon’s jersey number, 31. O’Bannon had

never consented to the use of his likeness in the video game,

and he had not been compensated for it.

In 2009, O’Bannon sued the NCAA and the Collegiate

Licensing Company (CLC), the entity which licenses the

trademarks of the NCAA and a number of its member schools

for commercial use, in federal court. The gravamen of

O’Bannon’s complaint was that the NCAA’s amateurism

rules, insofar as they prevented student-athletes from being

compensated for the use of their NILs, were an illegal

restraint of trade under Section 1 of the Sherman Act,

15 U.S.C. § 1.
O’BANNON V. NCAA 13

Around the same time, Sam Keller, the former starting

quarterback for the Arizona State University and University

of Nebraska football teams, separately brought suit against

the NCAA, CLC, and EA. Keller alleged that EA had

impermissibly used student-athletes’ NILs in its video games

and that the NCAA and CLC had wrongfully turned a blind

eye to EA’s misappropriation of these NILs. The complaint

stated a claim under Indiana’s and California’s right of

publicity statutes, as well as a number of common-law

claims.

The two cases were consolidated during pretrial

proceedings. The defendants moved to dismiss Keller’s

right-of-publicity claims on First Amendment grounds. The

district court denied the motion to dismiss, and we affirmed

that decision, holding that “[u]nder California’s

transformative use defense, EA’s use of the likenesses of

college athletes like Samuel Keller in its video games is not,

as a matter of law, protected by the First Amendment.” In re

NCAA Student-Athlete Name & Likeness Licensing Litig.

(“Keller”), 724 F.3d 1268, 1284 (9th Cir. 2013).

In November 2013, the district court granted the

plaintiffs’ motion for class certification. The court held that

certification of a damages class under Rule 23(b)(3) was

inappropriate, but it certified the following class under Rule

23(b)(2) for injunctive and declaratory relief:

All current and former student-athletes

residing in the United States who compete on,

or competed on, an NCAA Division I

(formerly known as “University Division”

before 1973) college or university men’s

basketball team or on an NCAA Football
14 O’BANNON V. NCAA

Bowl Subdivision (formerly known as

Division I-A until 2006) men’s football team

and whose images, likenesses and/or names

may be, or have been, included or could have

been included (by virtue of their appearance

in a team roster) in game footage or in

videogames licensed or sold by Defendants,

their co-conspirators, or their licensees.4

After class certification was granted, the plaintiffs

voluntarily dismissed their damages claims with prejudice. 

The plaintiffs also settled their claims against EA and CLC,

and the district court preliminarily approved the settlement. 

O’Bannon and Keller were deconsolidated, and in June 2014,

the antitrust claims against the NCAA at issue in O’Bannon

went to a bench trial before the district court.

4 As this class definition indicates, O’Bannon and Keller limited their

suits only to high-level (Division I/FBS) college football and men’s

basketball players. They likely did so in part because almost all of EA’s

college sports video games have been football and men’s basketball

games, and in part because those two sports generate far more revenue

than any other college sports. See, e.g., Richard Sandomir & Pete Thamel,

Tournament Stays at CBS, Adding Cable and 3 Teams, N.Y. Times, Apr.

23, 2010, at B9 (describing CBS’s agreement to pay $10.8 billion for the

TV rights to the NCAA Division I men’s basketball tournament for a

period of 13 years); Marc Tracy & Tim Rohan, What Made College

Football More Like the Pros? $7.3 Billion, for a Start, N.Y. Times, Dec.

31, 2014, at A1 (describing ESPN’s agreement to pay “$7.3 billion over

12 years to telecast seven [college football] games a year”); Nat’l

Collegiate Ath. Ass’n, 2004–2013 NCAA Revenues and Expenses of

Division I Intercollegiate Athletics Programs Report, at 37 (2014),

available at https://www.ncaapublications.com/p-4344-division-irevenues-and-expenses-2004-2013.aspx. Thus, although NCAAmember

schools sponsor teams in a variety of other sports, both the district court’s

analysis and our own focus on football and men’s basketball.
O’BANNON V. NCAA 15

D. The District Court’s Decision

After a fourteen-day bench trial, the district court entered

judgment for the plaintiffs, concluding that the NCAA’s rules

prohibiting student-athletes from receiving compensation for

their NILs violate Section 1 of the Sherman Act. O’Bannon

v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal. 2014).

1. The Markets

The court began by identifying the markets in which the

NCAA allegedly restrained trade. It identified two markets

that were potentially affected by the challenged NCAA rules.

a. The college education market

First, the court found that there is a “college education

market” in which FBS football and Division I basketball

schools compete to recruit the best high school players by

offering them “unique bundles of goods and services” that

include not only scholarships but also coaching, athletic

facilities, and the opportunity to face high-quality athletic

competition. Id. at 965–66. The court found that very few

athletes talented enough to play FBS football or Division I

basketball opt not to attend an FBS/Division I school; hardly

any choose to attend an FCS, Division II, or Division III

school or to compete in minor or foreign professional sports

leagues, and athletes are not allowed to join either the NFL or

the NBA directly from high school.5Id. at 966. Thus, the

5 The NFL has never allowed high school players to enter its draft. The

NBA did at one time, and a number of NBA stars (including LeBron

James and Kobe Bryant) came to the league directly from high school, but

in 2005, the NBA adopted a rule requiring draftees to be at least nineteen
16 O’BANNON V. NCAA

court concluded, the market specifically for FBS football and

Division I basketball scholarships is cognizable under the

antitrust laws because “there are no professional [or college]

football or basketball leagues capable of supplying a

substitute for the bundle of goods and services that FBS

football and Division I basketball schools provide.” Id. at

968.

b. The group licensing market

The second market identified by the district court was a

“group licensing market” in which, but for the NCAA’s

compensation rules, college football and basketball athletes

would be able to sell group licenses for the use of their NILs. 

Id. The court broke this “group licensing market” down into

three submarkets in which players’ NILs could be profitably

licensed: (1) live game telecasts, (2) sports video games, and

(3) game rebroadcasts, advertisements, and other archival

footage.6Id. With respect to live game telecasts, the court

noted that the TV networks that broadcast live college

football and basketball games “often seek to acquire the

rights to use” the players’ NILs, which the court concluded

“demonstrate[s] that there is a demand for these rights” on the

networks’ part. Id. at 968–69. With respect to video games,

the court found that the use of NILs increased the

attractiveness of college sports video games to consumers,

years old and one year out of high school, a rule it has retained to the

present day. See Howard Beck, N.B.A. Draft Will Close Book on High

School Stars, N.Y. Times, June 28, 2005, at D1.

6 Although the plaintiffs presented some evidence of other licensing

opportunities for merchandise such as jerseys and bobbleheads, they

abandoned these claims and the district court did not consider such

markets further. O’Bannon, 7 F. Supp. 3d at 968 n.4.
O’BANNON V. NCAA 17

creating a demand for players’ NILs.7Id. at 970. And with

respect to archival footage, the court noted that the NCAA

had licensed footage of student-athletes—including current

athletes—to a third-party licensing company, T3Media,

proving that there is demand for such footage. Id. at 970–71.

2. The Rule of Reason

Having concluded that the NCAA’s compensation rules

potentially restrained competition in these two markets, the

court proceeded to analyze the legality of the challenged

NCAA rules with respect to those markets, applying the Rule

of Reason. Id. at 984–1009. The district court found that the

NCAA’s rules have an anticompetitive effect in the college

education market but not in the group licensing market. It

then concluded that the rules serve procompetitive purposes. 

Finally, it determined that the procompetitive purposes of the

rules could be achieved by less restrictive alternative

restraints and that the current rules were therefore unlawful.

a. Anticompetitive effects

At the first step of the Rule of Reason, the court found

that the NCAA’s rules have an anticompetitive effect on the

college education market. Were it not for those rules, the

court explained, schools would compete with each other by

offering recruits compensation exceeding the cost of

attendance, which would “effectively lower the price that the

7 The court acknowledged that the NCAA had recently terminated its

relationship with EA by declining to renew its license for such video

games, but the court found that there was no evidence that the NCAA

would not renew the relationship in the future. O’Bannon, 7 F. Supp. 3d

at 970.
18 O’BANNON V. NCAA

recruits must pay for the combination of educational and

athletic opportunities that the schools provide.” Id. at 972. 

The rules prohibiting compensation for the use of studentathletes’ NILs are thus a price-fixing agreement: recruits pay

for the bundles of services provided by colleges with their

labor and their NILs, but the “sellers” of these bundles—the

colleges—collectively “agree to value [NILs] at zero.” Id. at

973. Under this theory, colleges and universities behave as

a cartel—a group of sellers who have colluded to fix the price

of their product.

The court found in the alternative that the college

education market can be thought of as a market in which

student-athletes are sellers rather than buyers and the schools

are purchasers of athletic services. In the court’s alternative

view, the college education market is a monopsony—a

market in which there is only one buyer (the NCAA schools,

acting collectively) for a particular good or service (the labor

and NIL rights of student-athletes), and the colleges’

agreement not to pay anything to purchase recruits’ NILs

causes harm to competition. Id. at 973, 991.

By contrast, the court found that the NCAA’s rules do not

have an anticompetitive effect on any of the submarkets of

the group licensing market. The court explained that

although these submarkets exist, there would be no

competition in any of them if the challenged NCAA rules

were abolished. The court reasoned that the value of an NIL

license to a live game broadcaster or a video game company

would depend on the licensee’s acquiring every other NIL

license that was available. A live game broadcaster, for

example, would need to acquire a license from every team or

player whose games it might telecast. Similarly, a video

game producer would want to acquire NIL rights for all of the
O’BANNON V. NCAA 19

teams it needed to include in the game. Given these

requirements, the court deemed it highly unlikely that groups

of student-athletes would compete with each other to sell

their NIL rights; on the contrary, they would have an

incentive to cooperate to make sure that the package of NIL

rights sold to buyers was as complete as possible. Id. at

993–98. With respect to archival footage, meanwhile, the

court found that the NCAA’s licensing arrangement with

T3Media did not deprive student-athletes of any

compensation theymight otherwise receive because T3Media

is prohibited from licensing footage of current athletes and

must obtain the consent of any former athlete whose NIL

appears in its footage. Id. at 998–99.

b. Procompetitive purposes

At the second step of the Rule of Reason, the NCAA

proffered four procompetitive purposes for its rules

prohibiting student-athletes from receiving compensation for

the use of their NILs: (1) preserving “amateurism” in college

sports; (2) promoting competitive balance in FBS football and

Division I basketball; (3) integrating academics and athletics;

and (4) increasing output in the college education market. Id.

at 999. The court accepted the first and third justifications in

part while rejecting the others.

(1) Amateurism. The NCAA argued to the district court

that restrictions on student-athlete compensation are

“necessary to preserve the amateur tradition and identity of

college sports.” Id. It contended that amateurism had been

one of the NCAA’s core principles since its founding and that

amateurism is a key driver of college sports’ popularity with

consumers and fans. Id. at 999–1000.
20 O’BANNON V. NCAA

The district court rejected the NCAA’s contention that it

had a “longstanding commitment to amateurism,” concluding

instead that the NCAA’s definition of amateurism was

“malleable,” changing frequently over time in “significant

and contradictory ways.” Id. at 1000. The court suggested

that, even today, the NCAA’s definition of amateurism is

inconsistent: although players generally cannot receive

compensation other than scholarships, tennis players are

permitted to accept up to $10,000 in prize money before

enrolling in college, and student-athletes are permitted to

accept Pell grants even when those grants raise their total

financial aid package above their cost of attendance. Id. It

thus concluded that amateurism was not, in fact, a “core

principle[]” of the NCAA. Id.

The district court was not persuaded that amateurism is

the primary driver of consumer demand for college

sports—but it did find that amateurism serves some

procompetitive purposes. The court first concluded that

consumers are primarily attracted to college sports for

reasons unrelated to amateurism, such as loyalty to their alma

mater or affinity for the school in their region of the country. 

Id. at 977–78. It also found much of the NCAA’s evidence

about amateurism unreliable. For example, the NCAA

provided a survey conducted by Dr. J. Michael Dennis, a

“survey research expert,” which purported to show that

Americans “generally oppose[] the idea of paying college

football and basketball players.” Id. at 975. The court

deemed the Dennis survey “unpersuasive” for a couple

reasons, one of which was that it believed the survey’s initial

question skewed the results by priming respondents to think

about illicit payments to student-athletes rather than the

possibility of allowing athletes to be paid. Id.
O’BANNON V. NCAA 21

But the district court ultimately found that the NCAA’s

“current understanding of amateurism” plays some role in

preserving “the popularity of the NCAA’s product.” Id. at

1005. It found that the NCAA’s current rules serve a

procompetitive benefit by promoting this understanding of

amateurism, which in turn helps preserve consumer demand

for college sports.

(2) Competitive Balance. The NCAA argued before the

district court that restricting compensation to student-athletes

helps level the playing field between FBS and Division I

schools in recruiting, thereby maintaining competitive

balance among those schools’ football and basketball teams. 

Id. at 1001–02.

The district court acknowledged that promoting

competitive balance could be a valid procompetitive purpose

under the antitrust laws, but it concluded that the challenged

NCAA rules do not promote competitive balance. The court

noted that numerous economists have studied the NCAA over

the years and that “nearly all” of them have concluded that

the NCAA’s compensation rules do not promote competitive

balance. Id. at 978. The court also explained that although

the NCAA forbids its member schools to pay student-athletes

anything beyond a fixed scholarship, it allows schools to

spend as much as they like on other aspects of their athletic

programs, such as coaching, facilities, and the like, which

“negate[s] whatever equalizing effect the NCAA’s restraints

on student-athlete compensation might have once had.” Id.

at 1002. The court concluded that competitive balance was

thus not a viable justification for restricting student-athlete

compensation.
22 O’BANNON V. NCAA

(3) Integrating Academics and Athletics. The NCAA’s

third procompetitive justification for its restraints on studentathlete compensation was that these restraints integrate

academics and athletics and thereby “improve the quality of

educational services provided to student-athletes.” Id.

According to the NCAA, student-athletes derive long-term

benefits from participating fully in academic life at their

schools, which the compensation rules encourage them to do. 

Id. at 979–80.

The district court allowed that this was a viable

procompetitive justification for the NCAA’s regulating the

college education market, but it concluded that most of the

benefits of academic and athletic “integration” are not the

result of the NCAA’s rules restricting compensation. Rather,

these benefits are achieved by other NCAA rules—such as

those requiring student-athletes to attend class, prohibiting

athletes-only dorms, and forbidding student-athletes to

practice more than a certain number of hours per week. Id. at

980. The court explained that the only way in which the

compensation rules might facilitate the integration of athletics

and academics is that, by prohibiting student-athletes from

being paid large sums of money not available to ordinary

students, the rules prevent the creation of a social “wedge”

between student-athletes and the rest of the student body. Id.

at 980, 1003. It held, however, that even though the

avoidance of such a “wedge” is a legitimate procompetitive

goal, it does not justify a total, “sweeping prohibition” on

paying student-athletes for the use of their NILs. Id. at 1003.

(4) Increasing Output. The fourth and final

procompetitive justification alleged by the NCAA was that

the restraints on student-athlete compensation “increase

output” in the college education market by increasing the
O’BANNON V. NCAA 23

available opportunities for students to play FBS football or

Division I basketball. Id. at 1003–04. The NCAA contended

that its rules accomplish this goal by attracting schools with

a philosophical commitment to amateurism to compete in

Division I and by enabling schools to compete in Division I

that otherwise could not afford to do so. Id. at 1004.

The district court rejected this justification. The court

found the idea that schools join Division I because of a

philosophical commitment to amateurism “implausible,”

noting that some major-conference schools had lobbied to

change the NCAA’s scholarship rules to raise compensation

limits. Id. at 981. The court also explained that schools in

FCS, Division II, and Division III are subject to the same

amateurism rules as Division I schools, making it unlikely

that schools choose to join Division I because of the

amateurism rules. Id.

The court likewise found no support in the record for the

notion that the NCAA’s compensation rules enable more

schools to compete in Division I. The court found that,

because Division I schools do not share revenue, there is no

reason to believe that the cost savings from not paying

student-athletes are being used to fund additional scholarships

at low-revenue schools or to enable those schools to join

Division I. Id. at 1004. The court also noted that the

plaintiffs were not seeking to require that all schools pay

their student-athletes; rather, they sought an injunction

permitting schools to do so. Schools that could not afford to

pay their student-athletes would not need to do so if the

plaintiffs prevailed and would therefore not be driven out of

Division I by a ruling in the plaintiffs’ favor. Id.
24 O’BANNON V. NCAA

c. Less restrictive alternatives

Having found that the NCAA had presented two

procompetitive justifications for “circumscribed” limits on

student-athlete compensation—i.e., increasing consumer

demand for college sports and preventing the formation of a

“wedge” between student-athletes and other students—the

court proceeded to the third and final step of the Rule of

Reason, where it considered whether there were means of

achieving the NCAA’s procompetitive purposes that were

“substantially less restrictive” than a total ban on

compensating student-athletes for use of their NILs. Id. at

1004–05.

The court held that the plaintiffs had identified two

legitimate, less restrictive alternatives to the current NCAA

rules: (1) allowing schools to award stipends to studentathletes up to the full cost of attendance, thereby making up

for any “shortfall” in their grants-in-aid, and (2) permitting

schools to hold a portion of their licensing revenues in trust,

to be distributed to student-athletes in equal shares after they

leave college.8Id. at 1005–06. The court determined that

neither of these alternatives to the total ban on NIL

compensation would undermine the NCAA’s procompetitive

purposes. The court also held that it would be permissible for

the NCAA to prohibit schools from funding these stipends or

trusts with anything other than revenue derived from the use

of players’ NILs. Id. at 1005.

8 The district court rejected a third proposal: permitting student-athletes

to receive compensation fromschool-approved endorsements. O’Bannon,

7 F. Supp. 3d at 984. The court found that this proposal would undermine

the NCAA’s efforts to protect its student-athletes from commercial

exploitation. Id.
O’BANNON V. NCAA 25

After entering judgment for the plaintiffs on their antitrust

claims, the district court permanently enjoined the NCAA

from prohibiting its member schools from (1) compensating

FBS football and Division I men’s basketball players for the

use of their NILs by awarding them grants-in-aid up to the

full cost of attendance at their respective schools, or

(2) paying up to $5,000 per year in deferred compensation to

FBS football and Division I men’s basketball players for the

use of their NILs, through trust funds distributable after they

leave school. The NCAA timely appealed, and we have

jurisdiction under 28 U.S.C. § 1291.

II

We review the district court’s findings of fact after the

bench trial for clear error and review the district court’s

conclusions of law de novo. FTC v. BurnLounge, Inc.,

753 F.3d 878, 883 (9th Cir. 2014). Our clear-error review of

the district court’s findings of fact is “deferential”; “we will

accept the district court’s findings of fact unless we are left

with the definite and firm conviction that a mistake has been

committed.” Id. (alteration and internal quotation marks

omitted).

III

On appeal, the NCAA contends that the plaintiffs’

Sherman Act claim fails on the merits, but it also argues that

we are precluded altogether from reaching the merits, for

three independent reasons: (1) The Supreme Court held in

NCAA v. Board of Regents of the University of Oklahoma,

468 U.S. 85 (1984), that the NCAA’s amateurism rules are

“valid as a matter of law”; (2) the compensation rules at issue

here are not covered by the Sherman Act at all because they
26 O’BANNON V. NCAA

do not regulate commercial activity; and (3) the plaintiffs

have no standing to sue under the Sherman Act because they

have not suffered “antitrust injury.” We find none of these

three arguments persuasive.

A. Board of Regents Did Not Declare the NCAA’s

Amateurism Rules “Valid as a Matter of Law”

We consider, first, the NCAA’s claim that, under Board

of Regents, all NCAA amateurism rules are “valid as a matter

of law.”

Board of Regents concerned the NCAA’s then-prevailing

rules for televising college football games. The rules allowed

television networks to negotiate directly with schools and

conferences for the right to televise games, but they imposed

caps on the total number of games that could be broadcast on

television each year and the number of games that any

particular school could televise. Id. at 91–94. The University

of Oklahoma and the University of Georgia challenged this

regime as an illegal restraint of trade under Section 1.

The Court observed that the television rules resembled

two kinds of agreements that are ordinarily considered per se

unlawful when made among horizontal competitors in the

same market: a price-fixing agreement (in that the rules set

a minimum aggregate price that the television networks were

required to pay the NCAA’s members) and an outputrestriction agreement (in that the rules artificially capped the

number of televised game licenses for sale). Id. at 99–100. 

But it concluded that applying a per se rule of invalidity to the

NCAA’s television rules would be “inappropriate” because

college football is “an industry in which horizontal restraints
O’BANNON V. NCAA 27

on competition are essential if the product is to be available

at all.” Id. at 100–01. The Court elaborated:

What the NCAA and its member institutions

market in this case is competition itself—

contests between competing institutions. Of

course, this would be completely ineffective

if there were no rules on which the

competitors agreed to create and define the

competition to be marketed. A myriad of

rules affecting such matters as the size of the

field, the number of players on a team, and the

extent to which physical violence is to be

encouraged or proscribed, all must be agreed

upon, and all restrain the manner in which

institutions compete. Moreover, the NCAA

seeks to market a particular brand of

football—college football. . . . In order to

preserve the character and quality of th[is]

“product,” athletes must not be paid, must be

required to attend class, and the like. And the

integrity of the “product” cannot be preserved

except by mutual agreement; if an institution

adopted such restrictions unilaterally, its

effectiveness as a competitor on the playing

field might soon be destroyed. Thus, the

NCAA plays a vital role in enabling college

football to preserve its character, and as a

result enables a product to be marketed which

might otherwise be unavailable. In

performing this role, its actions widen

consumer choice—not only the choices

available to sports fans but also those
28 O’BANNON V. NCAA

available to athletes—and hence can be

viewed as procompetitive.

Id. at 101–02 (emphasis added). The Court held that the

NCAA’s rules should therefore be analyzed under the Rule of

Reason.

Applying the Rule of Reason, the Court struck down the

television rules on the ground that they did not serve any

legitimate procompetitive purpose. Id. at 113–20. It then

concluded its opinion by stating:

The NCAA plays a critical role in the

maintenance of a revered tradition of

amateurism in college sports. There can be no

question but that it needs ample latitude to

play that role, or that the preservation of the

student-athlete in higher education adds

richness and diversity to intercollegiate

athletics and is entirely consistent with the

goals of the Sherman Act. But consistent with

the Sherman Act, the role of the NCAA must

be to preserve a tradition that might otherwise

die; rules that restrict output are hardly

consistent with this role. Today we hold only

that the record supports the District Court’s

conclusion that by curtailing output and

blunting the ability of member institutions to

respond to consumer preference, the NCAA

has restricted rather than enhanced the place

of intercollegiate athletics in the Nation’s life.

Id. at 120 (emphasis added).
O’BANNON V. NCAA 29

Quoting heavily from the language in Board of Regents

that we have emphasized, the NCAA contends that any

Section 1 challenge to its amateurism rules must fail as a

matter of law because the Board of Regents Court held that

those rules are presumptively valid. We disagree.

The Board of Regents Court certainly discussed the

NCAA’s amateurism rules at great length, but it did not do so

in order to pass upon the rules’ merits, given that they were

not before the Court. Rather, the Court discussed the

amateurism rules for a different and particular purpose: to

explain why NCAA rules should be analyzed under the Rule

of Reason, rather than held to be illegal per se. The point was

a significant one. Naked horizontal agreements among

competitors to fix the price of a good or service, or to restrict

their output, are usually condemned as per se unlawful. See,

e.g., United States v. Trenton Potteries Co., 273 U.S. 392,

398 (1927); see also, e.g., Broad. Music, Inc. v. CBS, Inc.,

441 U.S. 1, 19–20 (1979) (arrangements that “almost always

tend to restrict competition and decrease output” are usually

per se illegal). The Board of Regents Court decided,

however, that because college sports could not exist without

certain horizontal agreements, NCAA rules should not be

held per se unlawful even when—like the television rules in

Board of Regents—they appear to be pure “restraints on the

ability of member institutions to compete in terms of price

and output.” Bd. of Regents, 468 U.S. at 103.

Board of Regents, in other words, did not approve the

NCAA’s amateurism rules as categorically consistent with

the Sherman Act. Rather, it held that, because many NCAA
30 O’BANNON V. NCAA

rules (among them, the amateurism rules)9are part of the

“character and quality of the [NCAA’s] ‘product,’” id. at 102,

no NCAA rule should be invalidated without a Rule of

Reason analysis. The Court’s long encomium to amateurism,

though impressive-sounding, was therefore dicta. To be sure,

“[w]e do not treat considered dicta from the Supreme Court

lightly”; such dicta should be accorded “appropriate

deference.” United States v. Augustine, 712 F.3d 1290, 1295

(9th Cir. 2013). Where applicable, we will give the quoted

passages from Board of Regents that deference. But we are

not bound by Board of Regentsto conclude that every NCAA

rule that somehow relates to amateurism is automatically

valid.

What is more, even if the language in Board of Regents

addressing amateurism were not dicta, it would not support

the tremendous weight that the NCAA seeks to place upon it. 

The Court’s opinion supports the proposition that the

preservation of amateurism is a legitimate procompetitive

purpose for the NCAA to pursue, but the NCAA is not asking

us to find merely that its amateurism rules are

procompetitive; rather, it asks us to hold that those rules are

essentially exempt from antitrust scrutiny.

10 Nothing in

9

Importantly, the Court was quite clear that the preservation of

amateurism, standing alone, was not the justification for its decision to

reject a per se analysis. Bd. of Regents, 468 U.S. at 100–01 (“This

decision [not to apply a per se rule] is not based on . . . our respect for the

NCAA’s historic role in the preservation and encouragement of

intercollegiate amateur athletics.”).

10 The NCAA appears at some places in its briefs to concede that the

amateurism rules are subject to Rule of Reason analysis and merely to

argue that Board of Regents “dictates the outcome” of that analysis. But
O’BANNON V. NCAA 31

Board of Regents supports such an exemption. To say that

the NCAA’s amateurism rules are procompetitive, as Board

of Regents did, is not to say that they are automatically

lawful; a restraint that serves a procompetitive purpose can

still be invalid under the Rule of Reason if a substantially less

restrictive rule would further the same objectives equally

well. See Bd. of Regents, 468 U.S. at 101 n.23 (“While as the

guardian of an important American tradition, the NCAA’s

motives must be accorded a respectful presumption of

validity, it is nevertheless well settled that good motives will

not validate an otherwise anticompetitive practice.”).

The NCAA cites decisions of three of our sister circuits,

claiming that each adopted its view of Board of Regents. 

Two of these three cases, however, ultimately subjected the

NCAA’s rules to Rule of Reason scrutiny—the veryapproach

we adopt today. See Smith v. NCAA, 139 F.3d 180, 186 (3d

Cir. 1998), vacated on other grounds by NCAA v. Smith,

525 U.S. 459 (1999); McCormack v. NCAA, 845 F.2d 1338,

1344–45 (5th Cir. 1988). Only one—the Seventh Circuit’s

decision in Agnew v. NCAA, 683 F.3d 328 (7th Cir. 2012)—

comes close to agreeing with the NCAA’s interpretation of

Board of Regents, and we find it unpersuasive.

In Agnew, two former college football players who lost

their scholarships challenged certain NCAA rules that

prohibited schools from offering multi-year scholarships and

capped the number of football scholarships each school could

offer. Id. at 332–33. The Agnew court read Board of Regents

broadly and concluded that, “when an NCAA bylaw is clearly

meant to help maintain the ‘revered tradition of amateurism

we see no distinction between that position and an argument for blanket

antitrust immunity.
32 O’BANNON V. NCAA

in college sports’ or the ‘preservation of the student-athlete in

higher education,’ the bylaw [should] be presumed

procompetitive.” Id. at 342–43 (quoting Bd. of Regents,

468 U.S. at 120). The court concluded, however, that the

scholarship limitations that were before it did not “implicate

the preservation of amateurism,” since awarding more or

longer scholarships to college athletes would not change their

status as amateurs. Id. at 344. Thus, no “procompetitive

presumption” applied to the scholarship rules. Id. at 345. 

Instead of dismissing the plaintiffs’ antitrust claims on the

merits, the court dismissed them on the unrelated ground that

the plaintiffs had failed to plead the existence of a cognizable

market. Id.

Like the amateurism language in Board of Regents,

Agnew’s “procompetitive presumption” was dicta that was

ultimately unnecessary to the court’s resolution of that case. 

But we would not adopt the Agnew presumption even if it

were not dicta. Agnew’s analysis rested on the dubious

proposition that in Board of Regents, the Supreme Court

“blessed” NCAA rules that were not before it, and did so to

a sufficient degree to virtually exempt those rules from

antitrust scrutiny. Id. at 341. We doubt that was the Court’s

intent, and we will not give such an aggressive construction

to its words.

In sum, we accept Board of Regents’ guidance as

informative with respect to the procompetitive purposes

served by the NCAA’s amateurism rules, but we will go no

further than that. The amateurism rules’ validity must be

proved, not presumed.
O’BANNON V. NCAA 33

B. The Compensation Rules Regulate “Commercial

Activity”

The NCAA next argues that we cannot reach the merits of

the plaintiffs’ Sherman Act claim because the compensation

rules are not subject to the Sherman Act at all. The NCAA

points out that Section 1 of the Sherman Act applies only to

“restraint[s] of trade or commerce,” 15 U.S.C. § 1, and claims

that its compensation rules are mere “eligibility rules” that do

not regulate any “commercial activity.”

This argument is not credible. Although restraints that

have no effect on commerce are indeed exempt from Section

1, the modern legal understanding of “commerce” is broad,

“including almost every activity from which the actor

anticipates economic gain.” Phillip Areeda & Herbert

Hovenkamp, Antitrust Law: An Analysis of Antitrust

Principles and Their Application, ¶ 260b (4th ed. 2013). That

definition surely encompasses the transaction in which an

athletic recruit exchanges his labor and NIL rights for a

scholarship at a Division Ischool because it is undeniable that

both parties to that exchange anticipate economic gain from

it. See, e.g., Agnew, 683 F.3d at 340 (“No knowledgeable

observer could earnestly assert that big-time college football

programs competing for highly sought-after high school

football players do not anticipate economic gain from a

successful recruiting program.”). Moreover, Board of

Regents’ discussion of the procompetitive justifications for

NCAA amateurism rules shows that the Court “presume[d]

the applicability of the Sherman Act to NCAA bylaws, since

no procompetitive justifications would be necessary for

noncommercial activity to which the Sherman Act does not

apply.” Id. at 339.
34 O’BANNON V. NCAA

It is no answer to these observations to say, as the NCAA

does in its briefs, that the compensation rules are “eligibility

rules” rather than direct restraints on the terms of agreements

between schools and recruits. True enough, the compensation

rules are written in the form of eligibility rules; they provide

that an athlete who receives compensation other than the

scholarships specifically permitted by the NCAA loses his

eligibility for collegiate sports. The mere fact that a rule can

be characterized as an “eligibility rule,” however, does not

mean the rule is not a restraint of trade; were the law

otherwise, the NCAA could insulate its member schools’

relationships with student-athletes from antitrust scrutiny by

renaming everyrule governing student-athletes an “eligibility

rule.” The antitrust laws are not to be avoided by such

“clever manipulation of words.” Simpson v. Union Oil Co. of

Cal., 377 U.S. 13, 21–22 (1964).

In other words, the substance of the compensation rules

matters far more than how they are styled. And in substance,

the rules clearly regulate the terms of commercial

transactions between athletic recruits and their chosen

schools: a school may not give a recruit compensation

beyond a grant-in-aid, and the recruit may not accept

compensation beyond that limit, lest the recruit be

disqualified and the transaction vitiated. The NCAA’s

argument that its compensation rules are “eligibility”

restrictions, rather than substantive restrictions on the price

terms of recruiting agreements, is but a sleight of hand. 

There is real money at issue here.

As the NCAA points out, two circuits have held that

certain NCAA rules are noncommercial in nature. In Smith

v. NCAA, the Third Circuit dismissed a student-athlete’s

challenge to the NCAA’s “Postbaccalaureate Bylaw,” which
O’BANNON V. NCAA 35

prohibited athletes from participating in athletics at

postgraduate schools other than their undergraduate schools,

on the grounds that the Sherman Act did not apply to that

Bylaw. The Smith court held that eligibility rules such as the

Postbaccalaureate Bylaw “are not related to the NCAA’s

commercial or business activities. Rather than intending to

provide the NCAA with a commercial advantage, the

eligibility rules primarily seek to ensure fair competition in

intercollegiate athletics.” Smith, 139 F.3d at 185.

The Sixth Circuit, meanwhile, held in Bassett v. NCAA,

528 F.3d 426, 430, 433 (6th Cir. 2008), that the NCAA’s

rules against giving recruits “improper inducements” were

“explicitly noncommercial.” The court explained:

In fact, th[e]se rules are anti-commercial and

designed to promote and ensure

competitiveness amongst NCAA member

schools. Violation of the applicable NCAA

rules gives the violator a decided competitive

advantage in recruiting and retaining highly

prized student athletes. It also violates the

spirit of amateur athletics by providing

remuneration to athletes in exchange for their

commitments to play for the violator’s

football program. Finally, violators of these

rules harm the student-athlete academically

when coaches and assistants complete

coursework on behalf of the student-athlete.

Id. at 433.

Neither Smith nor Bassett convinces us that the NCAA’s

compensation rules are noncommercial. The
36 O’BANNON V. NCAA

Postbaccalaureate Bylaw challenged in Smith was a true

“eligibility” rule, akin to the rules limiting the number of

years that student-athletes may play collegiate sports or

requiring student-athletes to complete a certain number of

credit hours each semester. As the Smith court expressly

noted, the Postbaccalaureate Bylaw was “not related to the

NCAA’s commercial or business activities.” Smith, 139 F.3d

at 185. By contrast, the rules here—which regulate what

compensation NCAA schools may give student-athletes, and

how much—do relate to the NCAA’s business activities: the

labor of student-athletes is an integral and essential

component of the NCAA’s “product,” and a rule setting the

price of that labor goes to the heart of the NCAA’s business. 

Thus, the rules at issue here are more like rules affecting the

NCAA’s dealings with its coaches or with corporate business

partners—which courts have held to be commercial—than

they are like the Bylaw challenged in Smith. See Bd. of

Regents, 468 U.S. at 104–13 (applying Sherman Act to rules

governing NCAA members’ contracts with television

networks); Law v. NCAA, 134 F.3d 1010, 1024 (10th Cir.

1998) (applying Sherman Act to NCAA rules limiting

compensation of basketball coaches).

Bassett cannot be distinguished here in the way that Smith

can since it involved an NCAA rule relating to payments to

athletic recruits, but we believe Bassett was simply wrong on

this point. Bassett’s reasoning, in fine, is that rules that seek

to combat commercialism in college sports by preventing

schools from competing to pay student-athletes cannot be

considered restraints on “commerce.” We simply cannot

understand this logic. Rules that are “anti-commercial and

designed to promote and ensure competitiveness,” Bassett,

528 F.3d at 433, surely affect commerce just as much as rules

promoting commercialism. The intent behind the NCAA’s
O’BANNON V. NCAA 37

compensation rules does not change the fact that the

exchange they regulate—labor for in-kind compensation—is

a quintessentially commercial transaction.

We therefore conclude that the NCAA’s compensation

rules are within the ambit of the Sherman Act.

C. The Plaintiffs Demonstrated that the Compensation Rules

Cause Them Injury in Fact

The NCAA’s last argument antecedent to the merits is

that the plaintiffs’ Section 1 claim fails at the threshold

because the plaintiffs have failed to show that they have

suffered “antitrust injury.” Antitrust injury is a heightened

standing requirement that applies to private parties suing to

enforce the antitrust laws. To satisfy the antitrust-injury

requirement, a plaintiff must show “injury of the type the

antitrust laws were intended to prevent and that flows from

that which makes defendants’ acts unlawful.” Glen Holly

Entm’t, Inc. v. Tektronix Inc., 343 F.3d 1000, 1007–08 (9th

Cir. 2003) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat,

Inc., 429 U.S. 477, 489 (1977)) (internal quotation marks

omitted).

Although the NCAA purports to be making an antitrustinjury argument, it is mistaken. The NCAA has not

contended that the plaintiffs’ injuries are not “of the type the

antitrust laws were intended to prevent.” Rather, the NCAA

has made a garden-variety standing argument: it alleges that

the plaintiffs have not been injured in fact by the

compensation rules because those rules do not deprive them

of any NIL compensation they would otherwise receive. 

Addressing each of the potential markets for NIL rights that

the district court identified, the NCAA argues that (1) there
38 O’BANNON V. NCAA

are no legally-recognized NIL rights for participants in live

game broadcasts; (2) the NCAA’s compensation rules do not

deprive the plaintiffs of compensation for use of their NILs in

video games because the NCAA no longer permits college

sports video games to be made and has a separate policy

forbidding the use of student-athletes’ NILs in video games;

and (3) the NCAA’s licensing agreement for archival footage

with T3Media does not deprive athletes of NILcompensation

for archival footage because it prevents T3Media from

licensing student-athletes’ NILs while they are in school and

requires the company to obtain consent once student-athletes

have left school.

We conclude that the plaintiffs have shown that they are

injured in fact as a result of the NCAA’s rules having

foreclosed the market for their NILs in video games. We

therefore do not reach the thornier questions of whether

participants in live TV broadcasts of college sporting events

have enforceable rights of publicity or whether the plaintiffs

are injured by the NCAA’s current licensing arrangement for

archival footage.

1. Absent the NCAA’s compensation rules, video game

makers would negotiate with student-athletes for the

right to use their NILs

As we have explained, the district court found that, if

permitted to do so, video game makers such as EA would

negotiate with college athletes for the right to use their NILs

in video games because these companies want to make games

that are as realistic as possible. O’Bannon, 7 F. Supp. 3d at

970. The district court noted that EA currently negotiates

with the NFL and NBA players’ unions for the right to use

their members’ NILs in pro sports video games. Id. The
O’BANNON V. NCAA 39

plaintiffs also put into evidence a copy of a 2005 presentation

by EA representatives to the NCAA, which stated that EA’s

inability to use college athletes’ NILs was the “number one

factor holding back NCAA video game growth.”

The NCAA argues, however, that we cannot find that the

plaintiffs have suffered an injury in fact based on lost

compensation from video game companies because the

NCAA has terminated its relationship with EA and is not

currently working with any other video game maker.

11 We

disagree. The district court found that it is entirely possible

that the NCAA will resume its support for college sports

video games at some point in the future, given that the NCAA

found such games to be profitable in the past, id., and that

finding of fact was not clearly erroneous. Given the NCAA’s

previous, lengthy relationship with EA and the other evidence

presented, it was reasonable for the district court to conclude

that the NCAA may well begin working with EA or another

video game company in the future.12

11 The NCAA also asserts before us that it has no intent to license its

intellectual property for use in video games in the future, but we place no

weight on that assertion. Statements in appellate briefs are not evidence. 

See, e.g., Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d

987, 1002 (9th Cir. 2003).

12 Even if the district court had not made this factual finding, we would

be reluctant to conclude that the NCAA’s current moratorium on college

sports video games precludes the plaintiffs’ suit. When a defendant has

voluntarily ceased “allegedly improper behavior in response to a suit, but

is free to return to it at any time,” a challenge to the defendant’s behavior

is generally not considered moot unless “there is no reasonable

expectation that the illegal action will recur.” Native Vill. of Noatak v.

Blatchford, 38 F.3d 1505, 1510 (9th Cir. 1994). Under this logic, the

NCAA’s decision to terminate its relationship with video game companies
40 O’BANNON V. NCAA

Our conclusion is unaffected by the NCAA’s claim that

other rules and policies, not directly at issue here, would

forbid video game makers from using student-athletes’ NILs

in their games if such games were to be made again. The

NCAA did, after all, permit EA to continue making NCAA

video games for some time after EA began incorporating

recognizable player avatars into the games. Moreover, Joel

Linzner, a EA executive, testified at trial that EA “made a

long-sustained effort to work with the NCAA” to change the

policy against using student-athletes’ NILs, and that NCAA

executives were “supportive” of the idea. It was not clearly

erroneous for the district court to conclude on the basis of this

evidence that the NCAA might well either change its policy

barring the use of athletes’ NILs in video games or decline to

enforce it.

2. Whether the Copyright Act preempts right-ofpublicity claims based on sports video games is

tangential to this case and irrelevant to the plaintiffs’

standing

In addition to arguing that its current policies against

college sports video games defeat the plaintiffs’ claims to

standing, the NCAA also contends that there are legal barriers

that would prevent the plaintiffs from being compensated by

a video game maker. Specifically, the NCAA argues that the

Copyright Act would preempt any right-of-publicity claim

should not moot the plaintiffs’ video game-related claims or show that the

NCAA’s conduct does not injure the plaintiffs.
O’BANNON V. NCAA 41

arising out of the use of those NILs in sports video games.13

Thus, the NCAA maintains, if it were to resume its support

for college sports video games and permit video game

companies to use student-athletes’ NILs, the video game

makers would not pay student-athletes for their NILs; rather,

they could use the NILs for free.

We decline to consider this argument, for two reasons. 

First, it is convoluted and far afield from the main issues in

this case. The NCAA asks us to decide whether, assuming

that EA or some other video game company were to make a

college sports video game that incorporated student-athletes’

NILs and then refuse to pay student-athletes for those NILs,

the game maker would have a viable Copyright Act defense

to a right-of-publicity lawsuit brought by the athletes. That

question is a complex one, implicating both Section 301 of

the Copyright Act, 17 U.S.C. § 301, which expressly

preempts certain common-law claims, and a murky body of

case law holding that, in some circumstances, the Act

impliedly preempts claims that fall outside of Section 301’s

scope. See, e.g., Facenda v. NFL Films, Inc., 542 F.3d 1007,

1028–32 (3d Cir. 2008) (suggesting, on the basis of a conflict

preemption analysis, that federal copyright law can

“impliedly preempt[]” right-of-publicity claims). It is

scarcely fit for resolution within the confines of a standing

inquiry in an antitrust suit between the NCAA and its studentathletes that involves neither EA nor any other video game

13 The NCAA also argues that the First Amendment would preclude any

right-of-publicity claim arising out of a sports video game. We rejected

that argument in Keller, 724 F.3d at 1284, and we will not consider it

further in this appeal. Accord Hart v. Electronic Arts, Inc., 717 F.3d 141,

170 (3d Cir. 2013) (holding that “the NCAA Football . . . games at issue

in this case do not sufficiently transform [student-athletes’] identit[ies] to

escape [a] right of publicity claim”).
42 O’BANNON V. NCAA

company as a party. Should a college sports video game be

made in the future and the right-of-publicity suit envisioned

by the NCAA come to pass, the court hearing that suit will be

in a far better position to resolve the question of Copyright

Act preemption than we are.

Second and more importantly, the NCAA’s argument

about the Copyright Act, even if correct, is irrelevant to

whether the plaintiffs lack standing. On the NCAA’s

interpretation of the Copyright Act, professional football and

basketball players have no enforceable right-of-publicity

claims against video game makers either—yet EA currently

pays NFL and NBA players for the right to use their NILs in

its video games. O’Bannon, 7 F. Supp. 3d at 970. Thus,

there is every reason to believe that, if permitted to do so, EA

or another video game company would pay NCAA athletes

for their NIL rights rather than test the enforceability of those

rights in court. That the NCAA’s rules deny the plaintiffs all

opportunity to receive this compensation is sufficient to

endow them with standing to bring this lawsuit. See 13A

Charles Alan Wright &Arthur R. Miller, Federal Practice and

Procedure § 3531.4 (3d ed. 1998) (“[L]oss of an opportunity

may constitute injury, even though it is not certain that any

benefit would have been realized if the opportunity had been

accorded.” (collecting cases)); cf., e.g., United States v.

Students Challenging Regulatory Agency Procedures

(SCRAP), 412 U.S. 669, 689 n.14 (1973) (rejecting the

government’s argument that standing should be limited “to

those who have been ‘significantly’ affected by agency

action”); Preminger v. Peake, 552 F.3d 757, 763 (9th Cir.

2008) (“The injury may be minimal.”).

* * *
O’BANNON V. NCAA 43

Because the plaintiffs have shown that, absent the

NCAA’s compensation rules, video game makers would

likely pay them for the right to use their NILs in college

sports video games, the plaintiffs have satisfied the

requirement of injury in fact and, by extension, the

requirement of antitrust injury.

IV

Having rejected all of the NCAA’s preliminary legal

arguments, we proceed to review the plaintiffs’ Section 1

claim on the merits. Although in another context the

NCAA’s decision to value student-athletes’ NILat zero might

be per se illegal price fixing, we are persuaded—as was the

Supreme Court in Board of Regents and the district court

here—that the appropriate rule is the Rule of Reason. As the

Supreme Court observed, the NCAA “market[s] a particular

brand . . . [that] makes it more popular than professional

sports to which it might otherwise be comparable.” Board of

Regents, 468 U.S. at 101–02. Because the “integrity of the

‘product’ cannot be preserved except by mutual agreement,”

“restraints on competition are essential if the product is to be

available at all.” Id. at 101, 102; see also id. at 117 (“Our

decision not to apply a per se rule to this case rests in large

part on our recognition that a certain degree of cooperation is

necessary if the type of competition that [the NCAA] and its

member institutions seek to market is to be preserved.”

(footnote omitted)).

Like the district court, we follow the three-step

framework of the Rule of Reason: “[1] The plaintiff bears the

initial burden of showing that the restraint produces

significant anticompetitive effects within a relevant market. 

[2] If the plaintiff meets this burden, the defendant must come
44 O’BANNON V. NCAA

forward with evidence of the restraint’s procompetitive

effects. [3] The plaintiff must then show that any legitimate

objectives can be achieved in a substantially less restrictive

manner.” Tanaka v. Univ. of S. Cal., 252 F.3d 1059, 1063

(9th Cir. 2001) (citations and internal quotation marks

omitted).

A. Significant Anticompetitive Effects Within a Relevant

Market

As we have recounted, the district court made the

following factual findings: (1) that a cognizable “college

education market” exists, wherein colleges compete for the

services of athletic recruits by offering them scholarships and

various amenities, such as coaching and facilities; (2) that if

the NCAA’s compensation rules did not exist, member

schools would compete to offer recruits compensation for

their NILs; and (3) that the compensation rules therefore have

a significant anticompetitive effect on the college education

market, in that they fix an aspect of the “price” that recruits

pay to attend college (or, alternatively, an aspect of the price

that schools pay to secure recruits’ services). These findings

have substantial support in the record.

By and large, the NCAA does not challenge the district

court’s findings. It does not take issue with the way that the

district court defined the college education market. Nor does

it appear to dispute the district court’s conclusion that the

compensation rules restrain the NCAA’s member schools

from competing with each other within that market, at least

to a certain degree. Instead, the NCAA makes three modest

arguments about why the compensation rules do not have a

significant anticompetitive effect. First, it argues that

because the plaintiffs never showed that the rules reduce
O’BANNON V. NCAA 45

output in the college education market, the plaintiffs did not

meet their burden of showing a significant anticompetitive

effect. Second, it argues that the rules have no

anticompetitive effect because schoolswould not paystudentathletes anything for their NIL rights in any event, given that

those rights are worth nothing. And finally, the NCAA

argues that even if the district court was right that schools

would pay student-athletes for their NIL rights, any such

payments would be small, which means that the

compensation rules’ anticompetitive effects cannot be

considered significant.

We can dispose of the first two arguments quickly. First,

the NCAA’s contention that the plaintiffs’ claim fails because

they did not show a decrease in output in the college

education market is simply incorrect. Here, the NCAA

argues that output in the college education market “consists

of opportunities for student-athletes to participate in FBS

football or Division I men’s basketball,” and it quotes the

district court’s finding that these opportunities have

“increased steadily over time.” See O’Bannon, 7 F. Supp. 3d

at 981. But this argument misses the mark. Although output

reductions are one common kind of anticompetitive effect in

antitrust cases, a “reduction in output is not the only measure

of anticompetitive effect.” Areeda & Hovenkamp ¶ 1503b(1)

(emphasis added).

The “combination[s] condemned by the [Sherman] Act”

also include “price-fixing . . . by purchasers” even though

“the persons specially injured . . . are sellers, not customers

or consumers.” Mandeville Island Farms, Inc. v. Am. Crystal

Sugar Co., 334 U.S. 219, 235 (1948). At trial, the plaintiffs

demonstrated that the NCAA’s compensation rules have just

this kind of anticompetitive effect: they fix the price of one
46 O’BANNON V. NCAA

component of the exchange between school and recruit,

thereby precluding competition among schools with respect

to that component. The district court found that although

consumers of NCAA football and basketball may not be

harmed directly by this price-fixing, the “student-athletes

themselves are harmed by the price-fixing agreement among

FBS football and Division I basketball schools.” O’Bannon,

7 F. Supp. 3d at 972–73. The athletes accept grants-in-aid,

and no more, in exchange for their athletic performance,

because the NCAA schools have agreed to value the athletes’

NILs at zero, “an anticompetitive effect.”14

Id. at 973. This

anticompetitive effect satisfied the plaintiffs’ initial burden

under the Rule of Reason. Cf. Cal. Dental Ass’n v. FTC,

526 U.S. 756, 777 (1999) (“[R]aising price, reducing output,

and dividing markets have the same anticompetitive effects.”

(quoting Gen. Leaseways, Inc. v. Nat’l Truck Leasing Ass’n,

744 F.2d 588, 594–95 (7th Cir. 1984))).

Second, the NCAA’s argument that student-athletes’

NILs are, in fact, worth nothing is simply a repackaged

version of its arguments about injury in fact, which we have

rejected.

Finally, we reject the NCAA’s contention that any NIL

compensation that student-athletes might receive in the

absence of its compensation rules would be de minimis and

that the rules therefore do not significantly affect competition

14 As we have explained, the district court alternatively characterized

student-athletes as buyers of educational services from a cartel rather than

sellers of labor to a monopsony. This different way of describing the

college education market did not alter either the district court’s analysis

of how the market functioned or its assessment that student-athletes are

harmed by the NCAA’s compensation rules. O’Bannon, 7 F. Supp. 3d at

973, 991–93.
O’BANNON V. NCAA 47

in the college education market. This “too small to matter”

argument is incompatible with the Supreme Court’s holding

in Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980)

(per curiam). In Catalano, a group of beer retailers sued a

group of beer wholesalers, alleging that the wholesalers had

secretly agreed to end their customary practice of extending

the retailers interest-free credit for roughly a month after the

delivery of beer. Id. at 644. The Court unanimously held that

this agreement was unlawful per se. It reasoned that the

agreement was clearly a means of “extinguishing one form of

[price] competition among the sellers,” given that credit terms

were part of the price of the beer, and that the agreement was

therefore tantamount to price-fixing. Id. at 649. The Court

was not concerned with whether the agreement affected the

market adversely: “It is no excuse that the prices fixed are

themselves reasonable.” Id. at 647.

The NCAA’s compensation rules function in much the

same way as the agreement at issue in Catalano: they

“extinguish[] one form of competition” among schools

seeking to land recruits. We acknowledge that Catalano was

a per se case in which the Court did not analyze the

anticompetitive effect of the wholesalers’ agreement in

detail,15but the decision nonetheless indicates that an antitrust

court should not dismiss an anticompetitive price-fixing

agreement as benign simply because the agreement relates

only to one component of an overall price. That proposition

finds further support in Board of Regents: in Board of

Regents, a Rule of Reason case, the Court held that the

NCAA’s television plan had “a significant potential for

15 Indeed, the Catalano defendants declined to “suggest a procompetitive

justification for [their] horizontal agreement to fix credit.” Catalano,

446 U.S. at 646 n.8.
48 O’BANNON V. NCAA

anticompetitive effects” without delving into the details of

exactly how much the plan restricted output of televised

games or how much it fixed the price of TV contracts. 

468 U.S. at 104–05. While the precise value of NIL

compensation is uncertain, at this point in the analysis and in

light of Catalano and Board of Regents, we conclude that the

plaintiffs have met their burden at the first step of the Rule of

Reason by showing that the NCAA’s compensation rules fix

the price of one component (NIL rights) of the bundle that

schools provide to recruits.

Because we agree with the district court that the

compensation rules have a significant anticompetitive effect

on the college education market, we proceed to consider the

procompetitive justifications the NCAA proffers for those

rules.

B. Procompetitive Effects

As discussed above, the NCAA offered the district court

four procompetitive justifications for the compensation rules: 

(1) promoting amateurism, (2) promoting competitive balance

among NCAA schools, (3) integrating student-athletes with

their schools’ academic community, and (4) increasingoutput

in the college education market. The district court accepted

the first and third and rejected the other two.

Although the NCAA’s briefs state in passing that the

district court erred in failing to “credit all four justifications

fully,” the NCAA focuses its arguments to this court entirely

on the first proffered justification—the promotion of

amateurism. We therefore accept the district court’s factual

findings that the compensation rules do not promote

competitive balance, that they do not increase output in the
O’BANNON V. NCAA 49

college education market, and that they play a limited role in

integrating student-athletes with their schools’ academic

communities, since we have been offered no meaningful

argument that those findings were clearly erroneous. See,

e.g., Md. Cas. Co. v. Knight, 96 F.3d 1284, 1291 (9th Cir.

1996).

The district court acknowledged that the NCAA’s current

rules promote amateurism, which in turn plays a role in

increasing consumer demand for college sports. O’Bannon,

7 F. Supp. 3d at 978. The NCAA does not challenge that

specific determination, but it argues to us that the district

court gave the amateurism justification short shrift, in two

respects. First, it claims that the district court erred by

focusing solely on the question of whether amateurism

increases consumers’ (i.e., fans’) demand for college sports

and ignoring the fact that amateurism also increases choice

for student-athletes by giving them “the only opportunity

[they will] have to obtain a college education while playing

competitive sports as students.” Second, it faults the district

court for being inappropriately skeptical of the NCAA’s

historical commitment to amateurism. Although we might

have credited the depth of the NCAA’s devotion to

amateurism differently, these arguments do not persuade us

that the district court clearly erred.

The NCAA is correct that a restraint that broadens

choices can be procompetitive. The Court in Board of

Regents observed that the difference between college and

professional sports “widen[s]” the choices “available to

athletes.” Bd. of Regents, 468 U.S. at 102. But we fail to see

how the restraint at issue in this particular case—i.e., the

NCAA’s limits on student-athlete compensation—makes

college sports more attractive to recruits, or widens recruits’
50 O’BANNON V. NCAA

spectrum of choices in the sense that Board of Regents

suggested. As the district court found, it is primarily “the

opportunity to earn a higher education” that attracts athletes

to college sports rather than professional sports, O’Bannon,

7 F. Supp. 3d at 986, and that opportunity would still be

available to student-athletes if they were paid some

compensation in addition to their athletic scholarships. 

Nothing in the plaintiffs’ prayer for compensation would

make student-athletes something other than students and

thereby impair their ability to become student-athletes.

Indeed, if anything, loosening or abandoning the

compensation rules might be the best way to “widen”

recruits’ range of choices; athletes might well be more likely

to attend college, and stay there longer, if they knew that they

were earning some amount of NIL income while they were in

school. See Jeffrey L. Harrison & Casey C. Harrison, The

Law and Economics of the NCAA’s Claim to Monopsony

Rights, 54 Antitrust Bull. 923, 948 (2009). We therefore

reject the NCAA’s claim that, by denying student-athletes

compensation apart from scholarships, the NCAA increases

the “choices” available to them.16

The NCAA’s second point has more force—the district

court probably underestimated the NCAA’s commitment to

amateurism. See Bd. of Regents, 468 U.S. at 120 (referring to

16

It may be that what the NCAA means by this argument is that its

compensation rules make it possible for schools to fund more scholarships

than they otherwise could and thereby increase the number of

opportunities that recruits have to play college sports. To the extent the

NCAA is making that argument, it is the functional equivalent of the

NCAA’s argument that the rules increase output in the college education

market. The district court found that argument unproved, and we have

affirmed that finding.
O’BANNON V. NCAA 51

the NCAA’s “revered tradition of amateurism in college

sports”). But the point is ultimately irrelevant. Even if the

NCAA’s concept of amateurism had been perfectly coherent

and consistent, the NCAA would still need to show that

amateurism brings about some procompetitive effect in order

to justify it under the antitrust laws. See id. at 101–02 &

n.23. The NCAA cannot fully answer the district court’s

finding that the compensation rules have significant

anticompetitive effects simply by pointing out that it has

adhered to those rules for a long time. Nevertheless, the

district court found, and the record supports that there is a

concrete procompetitive effect in the NCAA’s commitment

to amateurism: namely, that the amateur nature of collegiate

sports increases their appeal to consumers. We therefore

conclude that the NCAA’s compensation rules serve the two

procompetitive purposes identified by the district court:

integrating academics with athletics, and “preserving the

popularity of the NCAA’s product by promoting its current

understanding of amateurism.” O’Bannon, 7 F. Supp. 3d at

1005.17

17 The dissent suggests that during the second step the district court

defined the procompetitive benefits as “limits on large amounts of

student-athlete compensation preserve the popularity of the NCAA’s

product.” Dissent at 69, 70. But this cannot be right. During the second

step, the district court could only consider the benefits of the NCAA’s

existing rule prohibiting NIL payments—it could not consider the

potential benefits of an alternative rule (such as capping large payments). 

The correct inquiry under the Rule of Reason is: What procompetitive

benefits are served by the NCAA’s existing rule banning NIL payments?

The district court found that the NCAA’s existing ban provides the

procompetitive benefit of preserving amateurism, and thus consumer

demand. It is only in the third step, where the burden is on the plaintiffs,

when the court could consider whether alternative rules provide a
52 O’BANNON V. NCAA

We note that the district court’s findings are largely

consistent with the Supreme Court’s own description of the

college football market as “a particular brand of football” that

draws from “an academic tradition [that] differentiates [it]

from and makes it more popular than professional sports to

which it might otherwise be comparable, such as, for

example, minor league baseball.” Bd. of Regents, 468 U.S. at

101–02. “Thus, the NCAA plays a vital role in enabling

college football to preserve its character, and as a result

enables a product to be marketed which might otherwise be

unavailable.” Id. at 102. But, as Board of Regents

demonstrates, not every rule adopted by the NCAA that

restricts the market is necessary to preserving the “character”

of college sports. We thus turn to the final inquiry—whether

there are reasonable alternatives to the NCAA’s current

compensation restrictions.

C. Substantially Less Restrictive Alternatives

The third step in the Rule of Reason analysis is whether

there are substantially less restrictive alternatives to the

NCAA’s current rules. We bear in mind that—to be viable

under the Rule of Reason—an alternative must be “virtually

as effective” in serving the procompetitive purposes of the

NCAA’s current rules, and “without significantly increased

cost.” Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d

1148, 1159 (9th Cir. 2001) (internal quotation marks

omitted). We think that plaintiffs must make a strong

evidentiary showing that its alternatives are viable here. Not

only do plaintiffs bear the burden at this step, but the

procompetitive benefit. And even then, the courts' analysis is cabined to

considering whether the alternative serves the same procompetitive

interests identified in second step.
O’BANNON V. NCAA 53

Supreme Court has admonished that we must generally afford

the NCAA “ample latitude” to superintend college athletics. 

Bd. of Regents, 468 U.S. at 120; see also Law v. Nat'l

Collegiate Athletic Ass'n, 134 F.3d 1010, 1022 (10th Cir.

1998) (“[C]ourts should afford the NCAA plenty of room

under the antitrust laws to preserve the amateur character of

intercollegiate athletics.”); Race Tires Am., Inc. v. Hoosier

Racing Tire Corp., 614 F.3d 57, 83 (3d Cir. 2010) (noting

that, generally, “sports-related organizations should have the

right to determine for themselves the set of rules that they

believe best advance their respective sport”).

The district court identified two substantially less

restrictive alternatives: (1) allowing NCAA member schools

to give student-athletes grants-in-aid that cover the full cost

of attendance; and (2) allowing member schools to pay

student-athletessmall amounts of deferred cash compensation

for use of their NILs.18 O’Bannon, 7 F. Supp. 3d at 1005–07. 

We hold that the district court did not clearly err in finding

that raising the grant-in-aid cap would be a substantially less

restrictive alternative, but that it clearly erred when it found

that allowing students to be paid compensation for their NILs

is virtually as effective as the NCAA’s current amateur-status

rule.

18 Although the NCAA now permits schools and conferences to elect to

raise their scholarship caps to the full cost of attendance, it could reverse

its position on that issue at any time. The district court’s injunction

prohibiting the NCAA from setting a cap any lower than the cost of

attendance thus remains in effect, which means that the NCAA’s

challenge to that portion of the injunction is not moot.
54 O’BANNON V. NCAA

1. Capping the permissible amount of scholarships at the

cost of attendance

The district court did not clearly err in finding that

allowing NCAA member schools to award grants-in-aid up to

their full cost of attendance would be a substantially less

restrictive alternative to the current compensation rules. All

of the evidence before the district court indicated that raising

the grant-in-aid cap to the cost of attendance would have

virtually no impact on amateurism: Dr. Mark Emmert, the

president of the NCAA, testified at trial that giving studentathletes scholarships up to their full costs of attendance would

not violate the NCAA’s principles of amateurism because all

the money given to students would be going to cover their

“legitimate costs” to attend school. Other NCAA witnesses

agreed with that assessment. Id. at 983. Nothing in the

record, moreover, suggested that consumers of college sports

would become less interested in those sports if athletes’

scholarships covered their full cost of attendance, or that an

increase in the grant-in-aid cap would impede the integration

of student-athletes into their academic communities. Id.

The NCAA, along with fifteen scholars of antitrust law

appearing as amici curiae, warns us that if we affirm even

this more modest of the two less restrictive alternative

restraints identified by the district court, we will open the

floodgates to new lawsuits demanding all manner of

incremental changes in the NCAA’s and other organizations’

rules. The NCAA and these amici admonish us that as long

as a restraint (such as a price cap) is “reasonably necessary to

a valid business purpose,” it should be upheld; it is not an

antitrust court’s function to tweak every market restraint that

the court believes could be improved.
O’BANNON V. NCAA 55

We agree with the NCAA and the amici that, as a general

matter, courts should not use antitrust law to make marginal

adjustments to broadly reasonable market restraints. See,

e.g., Bruce Drug, Inc. v. Hollister, Inc., 688 F.2d 853, 860

(1st Cir. 1982) (noting that defendants are “not required to

adopt the least restrictive” alternative); Am. Motor Inns, Inc.

v. Holiday Inns, Inc., 521 F.2d 1230, 1249 (3d Cir. 1975)

(denying that “the availability of an alternative means of

achieving the asserted business purpose renders the existing

arrangement unlawful if that alternative would be less

restrictive of competition no matter to how small a degree”). 

The particular restraint at issue here, however—the grant-inaid cap that the NCAA set below the cost of attendance—is

not such a restraint. To the contrary, the evidence at trial

showed that the grant-in-aid cap has no relation whatsoever

to the procompetitive purposes of the NCAA: by the

NCAA’s own standards, student-athletes remain amateurs as

long as any money paid to them goes to cover legitimate

educational expenses.

Thus, in holding that setting the grant-in-aid cap at

student-athletes’ full cost of attendance is a substantially less

restrictive alternative under the Rule of Reason, we are not

declaring that courts are free to micromanage organizational

rules or to strike down largely beneficial market restraints

with impunity. Rather, our affirmance of this aspect of the

district court’s decision should be taken to establish only that

where, as here, a restraint is patently and inexplicably stricter

than is necessary to accomplish all of its procompetitive

objectives, an antitrust court can and should invalidate it and

order it replaced with a less restrictive alternative.

A compensation cap set at student-athletes’ full cost of

attendance is a substantially less restrictive alternative means
56 O’BANNON V. NCAA

of accomplishing the NCAA’s legitimate procompetitive

purposes. And there is no evidence that this cap will

significantly increase costs; indeed, the NCAA already

permits schools to fund student-athletes’ full cost of

attendance. The district court’s determination that the

existing compensation rules violate Section 1 of the Sherman

Act was correct and its injunction requiring the NCAA to

permit schools to provide compensation up to the full cost of

attendance was proper.

2. Allowing students to receive cash compensation for

their NILs

In our judgment, however, the district court clearly erred

in finding it a viable alterative to allow students to receive

NIL cash payments untethered to their education expenses. 

Again, the district court identified two procompetitive

purposes served by the NCAA’s current rules: “preservingthe

popularity of the NCAA’s product by promoting its current

understanding of amateurism” and “integrating academics

and athletics.” O’Bannon, 7 F. Supp. 3d at 1005; see also

Board of Regents, 468 U.S. 117 (“It is reasonable to assume

that most of the regulatory controls of the NCAA are

justifiable means of fostering competition among amateur

athletic teams and therefore procompetitive because they

enhance public interest in intercollegiate athletics.”). The

question is whether the alternative of allowing students to be

paid NILcompensation unrelated to their education expenses,

is “virtually as effective” in preserving amateurism as not

allowing compensation. Cnty. of Tuolumne, 236 F.3d at 1159

(internal quotation marks omitted).

We cannot agree that a rule permitting schools to pay

students pure cash compensation and a rule forbidding them
O’BANNON V. NCAA 57

from paying NIL compensation are both equally effective in

promoting amateurism and preserving consumer demand.19

Both we and the district court agree that the NCAA’s

amateurism rule has procompetitive benefits. But 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.

20

19 Although our analysis focuses on whether the alternative serves

procompetitive purposes, our prior cases make clear that plaintiffs must

prove that any alternative will not significantly increase costs to

implement. Cnty. of Tuolumne, 236 F.3d at 1159. And the district court

here failed to make any findings about whether allowing schools to pay

students NIL cash compensation will significantly increase costs to the

NCAA and its member schools.

20 The dissent suggests that the district court found amateurism itself has

no procompetitive value, and that “[a]mateurism is relevant only insofar

as popular demand for college sports is increased by consumer perceptions

of and desire for amateurism.” Dissent at 70. But this ignores that the

district court found that the NCAA’s “current understanding of

amateurism” helps “preserv[e] the popularity of the NCAA’s product.” 

Amateurism is not divorced from the procompetitive benefit identified by

the court; it is its core element.

Elsewhere the dissent argues that “we are not tasked with deciding

what makes an amateur an amateur,” Dissent at 72 n.5, and that “the

distinction between amateur and professional sports is not for the court to

delineate. It is a line for consumers to draw,” id. at 71 n.4. However, if

we do not have some shared conception of what makes an amateur an

amateur—or, more precisely, the difference between amateurs and

professionals—then the district court’s findings on the role of amateurism

in college sports make no sense. We may not agree on all the particulars,

but the basic difference was spelled out by Neal Pilson, a witness the

district court relied on when determining that small cash payments to

students was a viable alternative: “if you’re paid for performance, you’re

not an amateur.”
58 O’BANNON V. NCAA

Having found that amateurism is integral to the NCAA’s

market, the district court cannot plausibly conclude that being

a poorly-paid professional collegiate athlete is “virtually as

effective” for that market as being as amateur. Or, to borrow

the Supreme Court’s analogy, the market for college football

is distinct from other sports markets and must be

“differentiate[d]” from professional sports lest it become

“minor league [football].” Bd. of Regents, 468 U.S. at 102.

Aside from the self-evident fact that paying students for

their NIL rights will vitiate their amateur status as collegiate

athletes, the court relied on threadbare evidence in finding

that small payments of cash compensation will preserve

amateurism as well the NCAA’s rule forbidding such

payments. Most of the evidence elicited merely indicates that

paying students large compensation payments would harm

consumer demand more than smaller payments would—not

that small cash payments will preserve amateurism. Thus, the

evidence was addressed to the wrong question. Instead of

asking whether making small payments to student-athletes

served the same procompetitive purposes as making no

payments, the evidence before the district court went to a

different question: Would the collegiate sports market be

better off if the NCAA made small payments or big

payments? For example, the district court noted that a

witness called by the NCAA, Bernard Muir, the athletic

director at Stanford University, testified that paying studentathletes modest sums raises less concern than paying them

large sums. The district court also relied on Dr. Dennis’s

opinion survey, which the court read to indicate that in the

absence of the NCAA’s compensation rules, “the popularity

of college sports would likely depend on the size of payments

awarded to student-athletes.” O’Bannon, 7 F. Supp. 3d at

983. Dr. Dennis had found that payments of $200,000 per
O’BANNON V. NCAA 59

year to each athlete would alienate the public more than

would payments of $20,000 per year. Id. at 975–76, 983. At

best, these pieces of evidence indicate that small payments to

players will impact consumer demand less than larger

payments. But there is a stark difference between finding that

small payments are less harmful to the market than large

payments—and finding that paying students small sums is

virtually as effective in promoting amateurism as not paying

them.

The other evidence cited by the district court is even less

probative of whether paying these student-athletes will

preserve amateurism and consumer demand. The district

court adverted to testimonyfrom a sports management expert,

Daniel Rascher, who explained that although opinion surveys

had shown the public was opposed to rising baseball salaries

during the 1970s, and to the decision of the International

Olympic Committee to allow professional athletesto compete

in the Olympics, the public had continued to watch baseball

and the Olympics at the same rate after those changes. Id. at

976–77. But professional baseball and the Olympics are not

fit analogues to college sports.21 The Olympics have not been

nearly as transformed by the introduction of professionalism

as college sports would be.

Finally, the district court, and the dissent, place particular

weight on a brief interchange during plaintiffs’ cross21 The district court also considered evidence that Division I tennis

recruits are permitted to earn up to ten thousand dollars per year in prize

money from athletic events before they enroll in college. O’Bannon, 7 F.

Supp. 3d at 974, 1000. Allowing college-bound tennis players to accept

award money from outside athletic events implicates amateurism

differently than allowing schools to pay student-tennis players directly.
60 O’BANNON V. NCAA

examination of one of the NCAA’s witnesses, Neal Pilson, a

television sports consultant formerly employed at CBS. 

Pilson testified that “if you’re paid for your performance,

you’re not an amateur,” and explained at length why paying

students would harm the student-athlete market. Plaintiffs

then asked Pilson whether his opinions about amateurism

“depend on the level of the money” paid to players, and he

acknowledged that his opinion was “impacted by the level.” 

When asked whether there was a line that “should not be

crossed” in paying players, Pilson responded “that’s a

difficult question. I haven’t thought about the line. And I

haven’t been asked to render an opinion on that.” When

pressed to come up with a figure, Pilson repeated that he was

“not sure.” He eventually commented that “I tell you that a

million dollars would trouble me and $5,000 wouldn’t, but

that’s a pretty good range.” When asked whether deferred

compensation to students would concern him, Pilson said that

while he would not be as concerned by deferred payments, he

would still be “troubled by it.”22

So far as we can determine, Pilson’s offhand comment

under cross-examination is the sole support for the district

court’s $5,000 figure. But even taking Pilson’s comments at

face value, as the dissent urges, his testimony cannot support

the finding that paying student-athletes small sums will be

virtually as effective in preserving amateurism as not paying

them. Pilson made clear that he was not prepared to opine on

22 Later in his cross-examination, Pilson was asked if “the public

watches college sports because they perceive student athletes as playing

for the love of the game and for the value and opportunities available to

them from a college education?” Pilson responded that that was “one of

the reasons that . . . would be jeopardized.” He then commented that “the

public has . . . a sense of college sports that is different from professional

[sports] and it’s at the bedrock of the popularity of college sports.”
O’BANNON V. NCAA 61

whether pure cash compensation, of anyamount, would affect

amateurism. Indeed, he was never asked about the impact of

giving student-athletes small cash payments; instead, like

other witnesses, he was asked only whether big payments

would be worse than small payments. Pilson’s casual

comment—“[I] haven’t been asked to render an opinion on

that. It’s not in my report”—that he would not be troubled by

$5,000 payments is simply not enough to support the district

court’s far-reaching conclusion that paying students $5,000

per year will be as effective in preserving amateurism as the

NCAA’s current policy.

23

The difference between offering student-athletes

education-related compensation and offering them cash sums

untethered to educational expenses is not minor; it is a

quantum leap.24 Once that line is crossed, we see no basis for

23 The dissent contends that the record supports the finding that $5,000

payments to student-athletes will have little to no effect on consumer

demand for college football. Dissent at 68 n.3, 72 (suggesting the district

court found “the distinction between offering student-athletes no

compensation and offering them a small amount of compensation is so

minor that it most likely will not impact consumer demand in any

meaningful way”). But there is little evidence in the record about the

impact of these $5,000 NIL payments. There is evidence only that small

payments will be less harmful than larger payments, and that a single

witness would not be as troubled by $5,000 payments. This is not enough

for plaintiffs to meet their burden to show that payments to studentathletes will be as effective in preserving consumer demand as the

NCAA’s current amateurism policy.

24 The district court suggested that compensating athletes beyond the full

cost of attendance would not be problematic because student-athletes are

already permitted to accept Pell grants that raise their total aid package

above the cost of attendance. O’Bannon, 7 F. Supp. 3d at 1000; Dissent

at 65. This reasoning was faulty because it improperly equates

compensation intended for education-related expenses (i.e., Pell grants)
62 O’BANNON V. NCAA

returning to a rule of amateurism and no defined stopping

point; we have little doubt that plaintiffs will continue to

challenge the arbitrary limit imposed by the district court

until they have captured the full value of their NIL. At that

point the NCAA will have surrendered its amateurism

principles entirely and transitioned from its “particular brand

of football” to minor league status. Bd. of Regents, 468 U.S.

at 101–02. In light of that, the meager evidence in the record,

and the Supreme Court’s admonition that we must afford the

NCAA “ample latitude” to superintend college athletics, Bd.

of Regents, 468 U.S. at 120, we think it is clear the district

court erred in concluding that small payments in deferred

compensation are a substantially less restrictive alternative

restraint.25 We thus vacate that portion of the district court’s

decision and the portion of its injunction requiring the NCAA

to allow its member schools to pay this deferred

compensation.

with pure cash compensation. The fact that Pell grants (which are

available to athletes and nonathletes alike) have not eroded the NCAA’s

culture of amateurism says little about whether cash payments into trust

funds to compensate student-athletes for their prowess on the gridiron or

the court would do so.

25 The dissent criticizes us for citing “no record evidence to support [our]

conclusion that paying student-athletes $5,000 in deferred compensation

will significantly reduce consumer demand.” Dissent at 68 n.3. But we

do not decide, and the NCAA need not prove, whether paying student

athletes $5,000 payments will necessarily reduce consumer demand. The

proper inquiry in the Rule of Reason’s third step is whether the plaintiffs

have shown these payments will not reduce consumer demand (relative to

the existing rules). And we conclude they have not.
O’BANNON V. NCAA 63

V

By way of summation, we wish to emphasize the limited

scope of the decision we have reached and the remedy we

have approved. Today, we reaffirm that NCAA regulations

are subject to antitrust scrutiny and must be tested in the

crucible of the Rule of Reason. When those regulations truly

serve procompetitive purposes, courts should not hesitate to

uphold them. But the NCAA is not above the antitrust laws,

and courts cannot and must not shy away from requiring the

NCAA to play by the Sherman Act’s rules. In this case, the

NCAA’s rules have been more restrictive than necessary to

maintain its tradition of amateurism in support of the college

sports market. The Rule of Reason requires that the NCAA

permit its schools to provide up to the cost of attendance to

their student athletes. It does not require more.

We vacate the district court’s judgment and permanent

injunction insofar as they require the NCAA to allow its

member schools to pay student-athletes up to $5,000 per year

in deferred compensation. We otherwise affirm. The parties

shall bear their own costs on appeal.

AFFIRMED IN PART and VACATED IN PART.
64 O’BANNON V. NCAA

THOMAS, Chief Judge, concurring in part and dissenting in

part:

I largely agree with all but one of the majority’s

conclusions.1I respectfully disagree with the majority’s

conclusion that the district court clearly erred in ordering the

NCAA to permit up to $5,000 in deferred compensation

above student-athletes’ full cost of attendance.

I

We review the district court’s determinations of fact for

clear error. We are not permitted to “review the evidence de

novo and freely substitute our judgment for that of the trial

judge.” United States v. Ironworkers Local 86, 443 F.2d 544,

549 (9th Cir. 1971). Rather, the clear error standard “is

significantly deferential, and we will accept the lower court’s

findings of fact unless we are left with the definite and firm

conviction that a mistake has been committed.” Lentini v.

Cal. Ctr. for the Arts, Escondido, 370 F.3d 837, 848-49 (9th

Cir. 2004).

There was sufficient evidence in the record to support the

award. The district court’s conclusion that the proposed

alternative restraint satisfied the Rule of Reason was based on

testimony from at least four experts–including three experts

1 The majority concludes that the plaintiffs established antitrust injury

in fact because the NCAA has foreclosed them from the market for the

athletes’ names, images, and likenesses (“NILs”) in video games. 

Because we are bound by In re NCAA Student-Athlete Name & Likeness

Licensing Litig. (“Keller”), 724 F.3d 1268 (9thCir. 2013), a case in which

I dissented, I agree that the plaintiffs have sufficiently established antitrust

injury. However, absent Keller, there is a serious question as to whether

the plaintiffs have established the requisite antitrust injury in fact.
O’BANNON V. NCAA 65

presented by the NCAA–that providing student-athletes with

small amounts of compensation above their cost of attendance

most likely would not have a significant impact on consumer

interest in college sports. O’Bannon, 7 F. Supp. 3d at

976–77, 983–84, 1000–01. It was also based on the fact that

FBS football players are currently permitted to accept Pell

grants in excess of their cost of attendance, and the fact that

Division I tennis recruits are permitted to earn up to $10,000

per year in prize money from athletic events before they

enroll in college. Id. at 974, 1000. The majority

characterizes the weight of this evidence as “threadbare.” 

Op. at 58. I respectfully disagree.

The NCAA’s own expert witness, Neal Pilson, testified

that the level of deferred compensation would have an effect

on consumer demand for college athletics, but that paying

student-athletes $5,000 per year in trust most likelywould not

have a significant impact on such demand. He also testified

that any negative impact that paying student-athletes might

have on consumer demand could be partially mitigated by

placing the compensation in a trust fund to be paid out after

graduation.

The majority dismisses this testimony because it was

made in a very “offhand” manner, and because Pilson

proffered the $5,000 amount on cross-examination “[w]hen

pressed.” Op. at 60. However, the NCAA presented this

witness as an expert on the issue of whether paying college

athletes will negatively impact consumer demand for college
66 O’BANNON V. NCAA

sports.2 Pilson testified at length on the topic, and his

qualifications were not challenged. It is not appropriate for

us on appeal to assess demeanor we did not see. As a result,

 

2

 Pilson’s testimony included the following exchanges:

Q: Okay. And let me just turn finally to your last

opinion just briefly, Mr. Pilson, regarding whether

paying basketball and football players in college

threatens the popularity of college sports with the

television audience. Just briefly sir, over the course of

your career in the sports broadcast industry, have you

come to have opinions about why viewers are interested

in college sports on television?

A: Yes, I have.

Q: And how did you come to have those opinions?

A: I [sic] been in the industry for 40 years. I’ve

acquired and telecast thousands of hours of college

sports. I watch college sports and evaluate them, so I

have a pretty good handle on the industry. Of course,

I have personal opinions as well, but I certainly—I’ve

worked in the industry a long time.

* * * *

Q: Okay. Now, your opinions about why this would be

damaging to the sport are based on your—what you

think viewers appreciate, what the public perceives. I

have that correct?

A: Yes. And I would suggest I’ve been in that

business measuring viewers—my whole job at CBS

over 20 years was to try to figure out what the viewers

wanted to watch and give it to them, so I’m not a

layman on that subject.
O’BANNON V. NCAA 67

I would take the testimony at face value, and the district court

did not clearly err in crediting it.

The majority also dismisses the testimony given by expert

witness Dr. Daniel Rascher demonstrating that consumer

interest in major league baseball and the Olympics increased

after baseball players’ salaries rose and professional athletes

were allowed to compete in the Olympics. The majority

reasons that major league baseball and the Olympics are “not

fit analogues to college sports,” speculating that college

sports would be more significantly transformed by

professionalism than have the Olympics. Op. at 59. 

However, the majority does not offer any evidentiary support

for the distinction, nor explain how or why the district court

clearly erred in crediting this testimony.

Moreover, Rascher also testified that consumer demand

in sports such as tennis and rugby increased after the sports’

governing boards permitted athletes to receive payment. 

O’Bannon, 7 F. Supp. 3d at 977. In my view, the majority

errs in dismissing this testimony. The import of Rascher’s

testimony was that consumer demand typically does not

decrease when athletes are permitted to receive payment, and

that this general principle holds true across a wide variety of

sports and competitive formats. The district court did not

clearly err in crediting it.

The district court accepted the testimony of multiple

experts that small amounts of compensation would not affect

consumer demand, and then used the lowest amount
68 O’BANNON V. NCAA

suggested by one of the NCAA’s experts. The district court

was within its right to do so.3

II

The disagreement between my view and the majority

view largely boils down to a difference in opinion as to the

procompetitive interests at stake. The majority characterizes

our task at step three of the Rule of Reason as determining

“whether the alternative of allowing students to be paid NIL

compensation unrelated to their education expenses is

‘virtually as effective’ in preserving amateurism as not

allowing compensation.” Op. at 56 (emphasis added). This

conclusion misstates our inquiry. Rather, we must determine

whether allowing student-athletes to be compensated for their

NILs is ‘virtually as effective’ in preserving popular demand

for college sports as not allowing compensation. In terms of

antitrust analysis, the concept of amateurism is relevant only

insofar as it relates to consumer interest.

3 The majority states that it “cannot agree that a rule permitting schools

to pay students pure cash compensation and a rule forbidding them from

paying NIL compensation are both equally effective in promoting

amateurism and preserving consumer demand.” Op. at 56–57. And yet

the majority cites no record evidence to support its conclusion that paying

student-athletes $5,000 in deferred compensation will significantly reduce

consumer demand. Rather, the majority declares that it is a “self-evident

fact” that “[t]he difference between offering student-athletes educationrelated compensation and offering them cash sums untethered to

educational expenses is not minor; it is a quantum leap.” Op. at 58, 61. 

To the contrary, the district court concluded after a full bench trial that the

distinction between offering student-athletes no compensation and

offering them a small amount of compensation is so minor that it most

likely will not impact consumer demand in any meaningful way. See

O’Bannon, 7 F. Supp. 3d at 976–77, 983–84, 1000–01.
O’BANNON V. NCAA 69

The district court found that there are two, limited

procompetitive benefits to the current rule. It found that

limits on large amounts of student-athlete compensation

preserve the popularity of the NCAA’s product, and that

limits on large amounts of student-athlete compensation

promote the integration of academics and athletics. 

O’Bannon, 7 F. Supp. 3d at 1004–05. In reaching these

conclusions, the district court explained:

[S]ome restrictions on compensation may still

serve a limited procompetitive purpose if they

are necessary to maintain the popularity of

FBS football and Division I basketball. If the

challenged restraints actually play a

substantial role in maximizing consumer

demand for the NCAA’s product—

specifically, FBS football and Division I

basketball telecasts, re-broadcasts, ticket

sales, and merchandise—then the restrictions

would be procompetitive. Id. at 1000

(emphasis added).

The district court recounted the testimony of NCAA

expert witness Dr. J. Michael Dennis, who conducted a

survey of consumer attitudes concerning college sports in

2013. The court found that “[w]hat Dr. Dennis’s survey does

suggest is that the public’s attitudes toward student-athlete

compensation depend heavily on the level of compensation

that student-athletes would receive.” Id. at 1000–01. It noted

that this conclusion “is consistent with the testimony of the

NCAA’s own witnesses, including [Stanford athletic director

Bernard] Muir and Mr. Pilson, who both indicated that

smaller payments to student-athletes would bother them less

than larger payments.” Id. at 1001.
70 O’BANNON V. NCAA

The district court determined that “the evidence presented

at trial suggests that consumer demand for FBS football and

Division I basketball-related products is not driven by the

restrictions on student-athlete compensation but instead by

other factors, such as school loyalty and geography.” Id. The

court therefore concluded that:

the NCAA’s restrictions on student-athlete

compensation play a limited role in driving

consumer demand for FBS football and

Division I basketball-related products. 

Although they might justify a restriction on

large payments to student-athletes while in

school, they do not justify the rigid

prohibition on compensating student-athletes,

in the present or in the future, with any share

of licensing revenue generated from the use of

their names, images, and likenesses.

Id.

The district court’s findings of fact provide that one

procompetitive benefit of the current rule is that restricting

large payments to student-athletes plays a limited role in

preserving the popularity of the NCAA’s products. In the

context of this antitrust suit, the concept of “amateurism” is

useful only to the extent that it furthers this goal. In terms of

antitrust analysis, amateurism is relevant only insofar as

popular demand for college sports is increased by consumer

perceptions of and desire for amateurism. Viewed through
O’BANNON V. NCAA 71

the antitrust lens, it is consumer desire that we must credit;

not the NCAA’s preferred articulation of the term.4

Plaintiffs are not required, as the majority suggests, to

show that the proposed alternatives are “virtually as

effective” at preserving the concept of amateurism as the

NCAA chooses to define it. Indeed, this would be a difficult

task, given that “amateurism” has proven a nebulous concept

prone to ever-changing definition. See O’Bannon, 7 F. Supp.

3d at 973–75 (describing the ways that the NCAA’s

definition of amateurism has changed over time). Even

today, the NCAA’s conception of amateurism does not fall

4 The majority argues that “[h]aving found amateurism is integral to the

NCAA’s market, the district court cannot plausibly conclude that being a

poorly-paid professional athlete is ‘virtually as effective’ for that market

as being an amateur. Or, to borrow the Supreme Court’s analogy, the

market for college football is distinct from other sports markets and must

be ‘differentiate[d]’ from professional sports lest it become ‘minor league

[football].’” Op. at 58. The district court found that amateurism played

a limited role in preserving the popularity of college sports, and that other

factors, such as school loyalty, served as the primary force driving interest

in college athletics. O’Bannon, 7 F. Supp. 3d at 1000. But I agree that an

antitrust court should not eliminate the distinction between professional

and college sports; to do so would undermine competition. However, in

terms of antitrust analysis, the distinction between amateur and

professional sports is not for the court to delineate. It is a line for

consumers to draw. If consumers believe that paying college football

players $5,000 to be held in trust for use of their NILs will convert college

football into professional football, and as a consequence they stop

watching college football, then the proposed alternative will not be

virtually as effective as the current rule. But, taken to its literal extreme

to prohibit even small, deferred payments, the idea that “if you’re paid for

performance, you’re not an amateur,” Op. at 57 n.20, does not reflect

consumer behavior. The district court made factual findings that modest

payments, including those held in trust, would not significantly affect

consumer demand. See O’Bannon, 7 F. Supp. 3d at 976–77, 983–84,

1000–01. Therefore, I cannot conclude that the district court clearly erred.
72 O’BANNON V. NCAA

easily into a bright line rule between paying student-athletes

and not paying them. Tennis players are permitted to receive

payment of up to $10,000 per year for playing their sport. A

tennis player who begins competing at a young age could

presumably earn upwards of $50,000 for playing his sport and

still be considered an amateur athlete by the NCAA.5

The NCAA insists that consumers will flee if studentathletes are paid even a small sum of money for colleges’ use

of their NILs. This assertion is contradicted by the district

court record and by the NCAA’s own rules regarding

amateurism. The district court was well within its right to

reject it. Division I schools have spent $5 billion on athletic

facilities over the past 15 years. The NCAA sold the

television rights to broadcast the NCAA men’s basketball

championship tournament for 12 years to CBS for $10.8

billion dollars. The NCAA insists that this multi-billion

dollar industry would be lost if the teenagers and young

adults who play for these college teams earn one dollar above

their cost of school attendance. That is a difficult argument

to swallow. Given the trial evidence, the district court was

well within its rights to reject it.

5 The majority states 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.” Op. at 57. This is not true even under the

NCAA’s current definition of the term. But more importantly, we are not

tasked with deciding what makes an amateur an amateur. We are tasked

with determining whether a proposed less-restrictive alternative restraint

will affect consumer demand.
O’BANNON V. NCAA 73

III

The national debate about amateurism in college sports is

important. But our task as appellate judges is not to resolve

it. Nor could we. Our task is simply to review the district

court judgment through the appropriate lens of antitrust law

and under the appropriate standard of review. In the end, my

disagreement with the majority is founded on the appropriate

standard of review. After an extensive bench trial, the district

court made a factual finding that payment of $5,000 in

deferred compensation would not significantly reduce

consumer demand for college sports. This finding was

supported by extensive testimony from at least four expert

witnesses. There was no evidence to the contrary. Therefore,

on this record, I cannot agree with the majority that the

district court clearly erred when it determined that paying

student-athletes up to $5,000 per year would be “virtually as

effective” at preserving the pro-competitive benefits of the

current rule. Therefore, I would affirm the district court in all

respects.

For these reasons, I concur in part and dissent in part.