Last August, a federal judge ruled against the NCAA in the O'Bannon case, contending that the NCAA broke antitrust laws and that football and men's basketball players were entitled to compensation for the use of their names, images and likenesses on broadcasts. U.S. District Court Judge Claudia Wilken ruled that the NCAA could cap that compensation, which would be given to players in the form of a trust fund, at no less than $5,000 a year. On Friday, the NCAA and its schools got a break when they were granted a stay of the injunction that delayed the date -- originally set for Aug. 1 -- when payments could be promised until after their appeal is heard.
Q: So what happens now?
A: If the NCAA didn't get the injunction, it would have had to make some sort of ruling on Friday in order to avoid a Wild West scenario, in which schools interpret the ruling how they want and offer recruits a large amount of money in what essentially becomes a kind of free-agent market. Now, at least the NCAA will have some time to come up with a plan should it lose the appeal.
Q: What would the offers look like?
A: Wilken ordered that the NCAA could cap compensation at no less than $5,000 per year. With the cost of attendance also in play, let's assume that $5,000 would be the number. Some schools could offer less, but it would put them at disadvantage in recruiting if, say over a four-year period, they are offering $12,000 beyond a scholarship while another school offers the hypothetical max of $20,000.
Q: Do schools have the money?
A: It's assumed that college programs are money-making machines, especially since they don't have to pay the talent. While it's certainly true there are some games played with budgets to make programs zero out what they bring in, it's possible that the compensation would not only apply to football and men's basketball, but that not paying athletes in the women's programs would also be a Title IX violation. Add walk-ons, and the additional compensation could run in the millions of dollars for some schools.
Q: When can athletes take the money out of the trust?
A: The original idea was that the money wouldn't be available until a player actually graduates, but it's not likely it will be tied to academics, because that would mean schools wouldn't have to pay out athletes who were the most influential. Those are the players who leave early. So the more realistic idea is that once these athletes leave school, the money that was put in trust would become available to them.
Q: Is it all a net positive for the athletes?
A: Probably not. The $5,000 is clearly compensation and would most likely be taxable, unlike most of their scholarship money, but because it would likely be in a trust fund, taxes likely would not have to be paid until the money is actually received or withdrawn. It gets more complicated when an athlete has been given a Pell Grant, which provides a maximum of $5,700 a year to students who come from financially challenged families. It is not known whether compensation promised by a school before it has been made available to an athlete would be considered annual compensation, therefore potentially making some student-athletes ineligible for Pell Grants.
Q: All I care about is that I get my college video games back. Does all of this get me any closer?
A: No. Video games are a separate case and both the NCAA and EA Sports have agreed to settle the case with former players, though that has no bearing on how the video-game companies will proceed in the future. Sources tell ESPN's Darren Rovell that Take Two Interactive has secured at least 10 licenses to put college basketball teams in its 2K games, though it's not clear how they would do it. Electronic Arts also has contacted schools to put out feelers on whether or not they can pull off a football game in the future. It is believed that until a system of further compensation is set up, licenses will include logos, mascots, arenas and stadiums, but not anything close to resembling actual players.