Stanford professor labels NCAA 'a cartel' on Day 2 of O'Bannon trial

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OAKLAND, Calif. -- In order for Judge Claudia Ann Wilken to make a decision in the case of O'Bannon v. NCAA, she must have a clear vision of how the big business of college sports operates and, for comparison's sake, how the enterprise would function in a world without the restrictions the NCAA rule book currently places on its most high-profile athletes.

During this three-week trial, as more witnesses are called to the stand, including NCAA president Mark Emmert, that picture will crystallize further. But, for now, through two days of grueling testimony lasting about eight hours, one man has shouldered the responsibility of laying the economic groundwork for Judge Wilken, and Roger Noll somehow has made it seem as if he could go on forever.

He is straight out of central casting, a 74-year-old bespectacled professor emeritus of economics at Stanford University with wispy gray hair, a goofy smile and a propensity for speaking way too fast when he is making a point (just ask the court reporter, whose pleas for him to slow down have been heard all too often on the fourth floor of the United States Courthouse).

In himself, Noll presents the perfect contrast -- a Stanford Cardinal fan who believes that college athletes should always remain students and yet is making $800 an hour for the plaintiffs to show that those same students should receive fair-market compensation for the use of their names, images and likenesses.

O'Bannon trial: Day 2

•The day's developments: Roger Noll, the plaintiffs' expert witness, remained on the stand for the entire five hours Tuesday, finishing his direct testimony with Ed O'Bannon attorney Michael Hausfeld and going through two hours of cross-examination with NCAA attorney Rohit Singla. Singla tried to put pressure on Noll to say that there was not a valid product market for college athletes' names, images and likenesses -- particularly trying to drive the point home for TV broadcasts -- but Noll would not be pushed into a corner.

•Impact on trial: Singla did not battle Noll's contention that the NCAA is a cartel, but he still has more time with Noll today.

•What's ahead: When Noll is finished, the plaintiffs will call former Alabama wide receiver Tyrone Prothro to the stand.

To Noll, there is absolutely no reason that he and the millions of college sports fans shouldn't be able to have it both ways. Why can't an athlete work toward a degree while simultaneously being paid closer to what his talents are actually worth to his university?

Well, right now, the NCAA's eligibility rules are the reason. And it is Noll's purpose to help prove that the NCAA -- by fixing the price of players' names, images and likenesses in video games, rebroadcasts of games and live broadcasts at zero dollars -- has created anti-competitive effects that outweigh any pro-competitive ones and therefore has violated the Sherman Antitrust Act.

"It's called a cartel," Noll first asserted Monday. "The NCAA is a cartel that creates a price-fixing agreement with member schools [by] the granting of scholarships and the acquisition of names, images and likenesses. It has monitoring activities to detect whether its members are adhering to the cartel agreement and has punishments that enable it to enforce it should they violate the agreement."

Noll presented evidence that most economics experts also consider the NCAA a cartel and made repeated references showing that the NCAA's own expert witness, Daniel Rubenfeld, had used the NCAA as an example of a cartel that had eliminated competition to the detriment of consumers in a Microeconomics textbook.

The fact that football and basketball programs routinely have broken NCAA rules over the years, even with the threat of sanctions looming, proves to Noll that, if not for the rules, many schools would be happy to provide more aid to the athletes than the cost of attendance.

"That is exactly what a cartel tries to do," Noll said.

"Prevent members from self-interest."

In the current system, he said, universities have spent money in other places that should have been going to the players, creating "inefficient substitution." Noll's data showed that coaches' salaries have increased by 512 percent since 1985 compared to just 108 percent for university presidents. He also pointed to the massive inflation in the amount spent on athletic facilities, which, ironically, has happened partly to attract recruits to the schools.

Tuesday, he brought up the "Big Five" (ACC, Big Ten, Big 12, Pac-12 and SEC) conferences' request for more autonomy from the NCAA as an example of a cartel breaking into two parts because the rules no longer benefit everyone equally.

He quoted a recent letter from the Pac-12 presidents admitting that they wanted more freedom to compensate their athletes.

Indirectly, in comments dispersed throughout his time on the stand, Noll presented his view of what the college sports business model could look like with an injunction:

* Each school could offer a "bundle" to third-party licensees like video-game companies and TV networks with the players' permission and give them a pre-determined cut of the revenues. This would be an addition to the current cost of attendance. Big schools such as Notre Dame, Michigan and Texas likely would demand more for their bundle than smaller schools, but the market would dictate that.

* For individually licensed products such as jerseys, bobblehead dolls and trading cards, players could sell their name, image and likeness themselves.

* It could be similar to the Olympic model, in which athletes are not allowed to be paid directly in relation to how they perform but can pursue endorsements. Noll pointed out that the Olympics are more lucrative after leaving the amateur model behind.

At the end of the proceedings Tuesday, NCAA attorney Rohit Singla finally got his chance to cross-examine Noll. Singla implied that Noll was advocating a totally unregulated market in the recruitment of high school athletes that would result in a bidding war between schools.

Noll, still going strong after five hours, said that, no, that wasn't quite it.

"They would offer some sort of an arrangement about how they treat student-athletes," Noll said.

"It would be up to them to decide what that arrangement was. It doesn't have to be a salary. Right now, it's money in an athletic scholarship. It would be for more money. It would include a share of group licensing."

J. Brady McCollough: and Twitter @BradyMcCollough.

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