In the wake of the French Labour Union of Basketball (Syndicat National du Basket, SNB) image rights dispute with Euroleague and EA Games, we threw the “jump ball” to start a series on players’ image rights in international professional basketball. In our first blogpost, we discussed why image rights contracts in professional basketball became a fertile ground for disputes when it comes to the enforcement of these contracts by the Basketball Arbitral Tribunal (BAT). Indeed, we pointed out that clubs might take advantage of the BAT’s inconsistent jurisprudence to escape obligations deriving from image rights contracts.

In this second limb, we will open a second field of legal battles “around the rim”: the unauthorized use of players’ image rights by third parties. We will use as a point of reference the US College Athletes image rights cases before US Courts and we will thereby examine the legal nature of image rights and the precise circumstances in which such rights may be infringed. Then, coming back to where we started, we will discuss the French case through the lens of US case law on players’ image rights. 

Source: http://philadelphia.cbslocal.com/2013/09/27/ea-sports-settles-college-likeness-case/ 

The American College Athletes image rights cases in a nutshell

The legal qualification of image rights varies in different jurisdictions. In the USA, image rights refer to the right of publicity: an intellectual property right, which gives the player an exclusive right on his image. The commercial exploitation of this image without permission constitutes an offence and practice of unfair competition.[1] Although the right of publicity is a creation of the common law not recognized under Federal law, many state courts and legislatures have embraced it.

The US legal system as a “true forerunner of marketing applied to sport”[2] considers, contrary to other legal systems, that image rights extends to the exploitation of players’ image rights linked to college championships. Indeed, the National Collegiate Athletic Association (NCAA) Basketball has acquired a monopoly power in the college sports entertainment market, with broadcast and cable television serving as powerful handmaidens.[3] This financially massive industry exploits the free labour of student-athletes’ due to their so-called amateur status.[4]  In fact, as a precondition to participate in NCAA Championships, student-athletes have to sign the ‘Form 08-3a’ authorizing NCAA to use their “name and picture to generally promote NCAA championships or other NCAA events, activities or programs”.[5]

The NCAA’s exploitation of players’ image rights generates millions of dollars of profits through licensing agreements for their use in e.g. television broadcasts, advertising, DVDs or video games. The fact that student-athletes are not compensated for the use of their rights has given rise to a wave of lawsuits filed by former student athletes against the NCAA and video game makers. O’Bannon’s, Sam Keller’s and other former student athletes’ image is still making money for the NCAA through licensed merchandizing.

As a result of the NCAA’s exploitation of players’ image rights, an unprecedented legal battle started in 2009 before the Federal Courts of the US. In May 2009, Sam Keller, a former football player of the Arizona University sued NCAA and EA Games for unlawfully using his image and likeness in a video game. The case continued before the 9th Circuit Court of Appeals in California which dismissed the appeal of EA Games on the grounds that EA was not protected by the First Amendment, which offers a shield to video games via freedom of speech. In fact, the Court concluded that the EA’s use of the player recreates him in the very setting in which he has achieved fame.[6] Similarly, in Ryan Hart’s case, a former Rutgers football player, the Federal Court of Appeals, overturning the district court’s ruling, concluded that players in video games are renditions of actual players who should be compensated.

Undoubtedly, the O’Bannon case is to be considered a milestone. It is the widest-ranging anti-trust lawsuit before US Courts with regards to college athletes’ image rights. On 21 July 2009, Ed O’Bannon, one of the most recognized collegiate basketball players of the last 30 years, along with another 19 former college athletes, filed a class action against EA Games, NCAA, and the Collegiate Licencing Company, the nation’s leading collegiate trademark licensing and marketing firm, seeking compensation from the unauthorized use of their image rights. Their claim implicated two core areas of law: (1) federal antitrust law and (2) intellectual property rights law. By requiring athletes to relinquish in perpetuity their image rights through the ‘Form 08-3a’ and fixing at zero the amount of compensation athletes could receive from the share of revenues, they contended that the NCAA has restrained trade and, thus, acted in violation of the Sherman Act, i.e. federal antitrust law. The athletes that signed this form had been deprived of their right to negotiate on their own with licensing firms after leaving college. Furthermore, they argued that they had been deprived of their right of publicity and their subsequent right to the commercial exploitation of their image, name, likeness or voice.

Following a contentious five years trial proceeding and thousands of pages of filings, on 8 August 2014, the US District Judge Claudia Wilken in a 99-page decision shook the basketball world by ruling in favour of O’Bannon and the other plaintiffs.[7] The injunction issued allows college athletes to get a share of the licensing revenues via the creation of a trust fund available to them once they leave college.

The O’Bannon landmark ruling: What the French (and Europe) can learn?

The O’Bannon ruling, while under appeal, has been ground-breaking in that it questions the ‘sacrosanct’ NCAA notion of amateurism. Judge Wilken was clear: maintaining amateurism is not legitimate sufficient justification for implementing anticompetitive labour rules, which bar players from being compensated for the use of their image rights. The collapse of NCAA’s amateurism defence and the resulting establishment of an equitable bargaining relationship between student-athletes and NCAA could blow up the entire college basketball system. Nonetheless, this not the only important lesson we can derive from the O’Bannon ruling and the American cases.

The link between amateurism and image rights, which deprives student-athletes from any compensation, is a unique phenomenon of US college sports system and lies at the heart of the American cases. In Europe, as we extensively explained in our fist blogpost, some professional basketball players assign to their clubs the commercial use of their image rights and they receive an adequate compensation through an image rights contract concluded with a third party, an image rights contract. However, this sum cannot be deemed as an actual compensation for the use of their image, but rather it constitutes a part of their remuneration under the employment contract. Therefore, at the European level, the question that could be raised is whether basketball players can request further compensation, i.e. a compensation proportionate to the revenues generated by the exploitation of their image rights. In this light, the O’Bannon ruling has the potential to create an important precedent for image rights disputes in European professional basketball as well:

(1) The license agreement of image rights between players and basketball associations

The issue at heart of the O’Bannon case regarding the ownership of the student-athletes image and likeness is the NCAA ‘Form 08-3a’. By means of this form, student-athletes authorize the NCAA to use their image rights for the promotion of its activities.[8] O’Bannon strongly argued that this form is illegal for the following reasons: First and foremost, the language of Part IV, which provides that the NCAA can use their “name and picture to generally promote NCAA championships or other NCAA events, activities or programs”, is vague and ambiguous. It does not define when, where, for how long, and how the NCAA may ‘generally’ promote events or activities. Secondly, as a result of student-athletes’ amateur status, this form is signed without representation. This can be considered as exploitative, since student-athletes’ are usually unaware of the legal consequences of signing such forms. Finally, this form is illegal, because it is coerced from student-athletes in exchange for their eligibility to play in the championship. Doug Szymul, former star football player at Northwestern University puts it clearly: “I had to sign it to be able to play, so it’s not like I’m going to argue about it”.[9]

Let’s transpose these arguments to the European professional basketball world and more particularly to the potential French case at hand. In fact, in the contracts between professional basketball players and National or European Basketball Associations, there is an image rights provision according to which players or their union agree, without further compensation, to the use of players’ image rights by the Club, the National or European League.[10] In this regard, the reference to the use of players’ image rights “in any manner” is quite ambiguous.[11]

In the French case, players transfer their image rights to the French Labour Union of Basketball (SNB). But, when players sign their contract with their club, they license the use of their image rights to their Club, French Basketball League and Euroleague, without further compensation. Can this agreement be interpreted as giving carte blanche to the Clubs, National Leagues or Euroleague to use basketball players’ image rights for an indefinite time period and indefinite manner, without further compensation? Well, if we follow the reasoning used in the O’Bannon ruling, this question should be answered in the negative: players and subsequently their labour union should have a share of licensing revenues. 

(2) The ‘without further compensation’ provision

A key issue raised during the O’Bannon trial was whether image rights (as well as name and likeness rights) even exist for the purposes of licencing agreements. The NCAA argued and provided supporting evidence[12] that although image rights are included in the contractual language, in practice, during the negotiation of broadcasting or licencing deals, they are not valued separately. The contractual provisions on image rights refer only to their use in event promotions and they play no further role during the licencing dealing.

Plaintiff’s witness, Edwin Desser, who was formerly the NBA head of broadcasting, disputed this argument by stating the ‘obvious’ from a commercial point of view: “ it’s simply impossible to conceive of sports telecast without being able to show the images of the participants”.[13] In other words, players’ image rights are a quid pro quo requirement of every broadcasting or licencing agreement.

This argument, which stems from commercial law practice, could serve as the perfect pick-n-roll in other image rights cases, including the French case. True, when, for example, EA Games negotiates with Euroleague for the conclusion of a licencing agreement, image rights are not separately calculated. However, in practice, the package of entitlements conveyed to video makers by the Clubs and Euroleague in exchange for exclusive licensing rights is essential for the deal. Realistically speaking, would it be possible for EA Games to create the NBA 2K 15 with Strasbourg and Nanterre playing, without including their players’ image rights? Clubs and Euroleague license players’ image rights and it goes without saying that they get significant revenues from the licencing agreement, while some players receive only a compensation which has been fixed in advance as part of their overall remuneration. It is this ‘without further compensation’ use of image rights provided by the contracts signed by players, therefore, that infringes their right to the commercial exploitation of their own image rights. 

Conclusive Remarks

In our previous blogpost, we cited the SNB’s president words: the SNB motion against EA Games is not about the money, but rather to defend basketball players’ rights.[14] Undoubtedly, image rights are also about the money, even if in the European context the monetary compensation is limited. We have shown that the unauthorized use of players’ image rights or the loss of their exclusive use may deprive them from a fair share of the club’s lucrative endorsement contracts. Furthermore, the existence of products bearing a player’s image without his authorization can in some cases seriously damage the value of his licensing rights.[15] Moreover, irrespectively of the legal qualification of image rights as ‘right of publicity’ or ‘right to personality’, this is a right gained through hard work on the basketball courts and the player should in any events get a share of the licensing revenues it generates.

The ‘David against Goliath’ American college sports crusade shows the way for European professional basketball players: a ‘without further compensation’ use of image rights or the denial of liability of the Clubs for non-payment of image rights contracts can be (and should be) successfully fought against.

[1] L Colantuoni and C Novazio, ‘Intellectual Property Righs in Basketball’ (2011) 1-2 International Sports Law Journal, 59.

[2] Ibid, 58.

[3] http://economics.stanford.edu/files/Theses/RobertLemonsHonorsThesis-May2014.pdf

[4] For an interesting insight on NCAA practice, see: B Starkey, ‘College Sports Aren't Like Slavery. They're Like Jim Crow’ where the author compares college athletes’ status to the status of “blacks after slavery”.

[5] Form 08-3a, Part Iv

[6] United States Courts of Appeals for the Ninth Circuit, NCAA Student-Athlete name & likeness litigation (No 10-15387)

[7] Edward O’Bannon et al v National Collegiate Athletics Association, Electronic Arts Inc and Collegiate Licensing Company (US District Court, 08.08.2014)

[8] M Zylstra, Ed. O’Bannon vs. NCAA: An examination of O’Bannon’s legal claim that the NCAA illegally uses the likeness and image of former student-athletes (2009) 205 Business Law, 5.

[9] Ibid, 6.

[10] See for example, Article 69  of the Euroleague Bylaws 2012-2013: “The Company and EP have the right to use the image of the club’s players, the players’ likeness (photograph, caricature, etc), name, number, or any combination thereof for any and all commercial and promotional purposes solely in connection with the Euroleague and provided that the image of the player appears linked to the club, the player wearing its apparel and footwear, or when the player participates in public events organised by the club or by the Company”.

[11] See, Standard Player Contract of SIG BASKET SAEMSL , Clause 9.1 : “The Player agrees, without further compensation, to allow the Club or the National League or Euroleague Basketball and their respective sponsors to take pictures of the Player, during game action or posed, as necessary, alone or together with others, for still photographs, motion pictures, internet, TV or any other form of media whether presently known or unknown, at such times as the Club or the National League or Euroleague Basketball may designate. Such pictures may be used, without further compensation, in any manner desired by either the Club or the National League or Euroleague Basketball or their respective sponsors only for publicity or promotional purposes. The rights in any such pictures taken by the Club or by the National League or by Euroleague Basketball shall belong to the Club or to the National League or to Euroleague Basketball as their interests may appear.”

[12] Reporter’s Transcript of Proceedings, Testimony of the NCAA’s lead expert Neal Pilson (vol 4) 715-815

[13] Reporter’s Transcript of Proceedings, Testimony of Edwin Desser (vol 4), 618-708.

[14] Johan Passave-Ducteil, the president of SNB remarks in l’Equipe:"Ce n’est pas une histoire d’argent, on défend le droit des joueurs".

[15] L Colantuoni and C Novazio (n1), 60