Proposed NCAA video game settlement could pay players more
July 23, 2014 8:40 pm ET
A revised NCAA video-game proposed settlement filed Wednesday has removed a $5,000-a-year cap for current and former college football and men's basketball players who appeared in the games.
The change could open the door for players to receive "what some might consider a windfall," said Rob Carey, an attorney for former Nebraska and Arizona State quarterback Sam Keller in the settlement. If 10 percent of the eligible class opts into the settlement, Carey estimated a player who appeared four years in a video game could receive $50,000 to $55,000.
Initially, the $5,000-per-year cap was for recoveries if fewer than 10 percent of the eligible players opted into the settlement. That cap has been removed in the settlement prior to US District Judge Claudia Wilken's preliminary approval hearing Thursday, when she will discuss the combined $60 million settlements by Electronic Arts and Collegiate Licensing Company ($40 million) and the NCAA ($20 million).
If the settlement is approved, current and former players could receive more money than initially expected with a second round of payments.
Carey said the $5,000-per-year cap for each claimant was removed because an agreement couldn't be reached on carrying over the cap from the NCAA settlement to the EA settlement. The settlements are being combined into one class notice. Initially, the cap was $1,818 per year for the NCAA settlement and $3,182 for the EA settlement.
Now there's no such cap. Different claims rates would impact the amount a player receives, along with the nature of appearing in the video game. Appearing on a roster and having a photograph in the game are the distinguishing factors. Players who appeared in a video game since May 5, 2007, are worth more than those who appeared before due to a statute of limitations.
Since the cap is gone, there's also essentially no longer a trust fund for extra money not claimed by players, although the language still exists, Carey said.
The first proposed settlement said that if the participation rate is below 10 percent, a program would be created to distribute any residual funds into a trust to class members who didn't file a claim. After five years, the video game fund would convert into a hardship-based scholarship fund to assist class members who did not graduate and wish to return to college.
Under the new proposed settlement, if money remains after validly-timed claims, there would be a second distribution of money to claimants who already got paid.
"If you have larger recoveries, it will certainly incentivize people to participate in class actions down the road, and that's one of the main benefits," Carey said. "You won't assume it's worthless. We wanted the cap initially. It was a close call. Other people didn't want it. Our number one function is to assure the most people who can possibly participate do."
Carey said the average settlement claims rate from a public notice is under 1 percent, but he believes the video-game rate could be well over 10 percent.
"Unlike most class claims, where you take a buyer of a Chevy and he doesn't know who else buys a Chevy, this is a very different class," Carey said. "They all know one another. They stay in touch to a large degree. A guy who sees this settlement may contact 10 teammates, and those guys contact 10 other teammates."
There's a provision in the settlement that allows the NCAA to rescind the agreement if 1,000 class members opt out. A similar provision was put in the EA settlement with a redacted opt-out number. Attorneys' fees and expense reimbursements could reach up to $19 million (31.7 percent of the combined settlements).
O'Bannon plaintiffs challenge terms of settlement
Also, Wednesday's filing showed that Wilken is being asked to decide whether the NCAA settlement affects the injunctive relief claims by the Ed O'Bannon plaintiffs in their antitrust lawsuit against the NCAA.
The O'Bannon claims say their antitrust injunctive relief claims regarding NCAA-licensed video games cannot be validly disclosed since they never negotiated any possible release. The Keller plaintiffs and the NCAA argue they properly resolved all EA video game claims with the lead counsel appointed to oversee that issue.
The O'Bannon plaintiffs and NCAA are awaiting a ruling from Wilken on whether NCAA rules banning players from being paid for their name, image and likeness violates antitrust law. Wilken has previously said she wants to include the O'Bannon trial outcome in the video-game class notice.
In a court filing, the NCAA wrote it settled the video game claims to achieve a resolution for all such complaints.
"The Antitrust Plaintiffs presented evidence relating to EA Videogames in the O'Bannon trial, but their choice to present this evidence does not negate the NCAA's settlement of EA Videogame claims," the NCAA wrote. "A class settlement can compromise and release all claims relating to a particular subject -- here, collegiate-themed videogames."
The proposed video-game notice for players to opt in or out of the settlement mentions that the O'Bannon trial involved claims that the NCAA used athletes' likenesses without permission, but only whether those claims violated antitrust laws. Three alternative endings were filed to Wilken for that section of the settlement.
O'Bannon plaintiffs: "Additionally, that trial concerned a request for injunctive relief [a court order discontinuing certain practices] -- not cash payments for past conduct. The 'EA Videogame Settlement' and the 'NCAA Videogame Settlement' do not affect the injunctive claims recently tried in the O'Bannon vs. NCAA case."
Keller plaintiffs: "Also unlike the claims being resolved by this settlement, the claims in the trial did not involve claims for cash payments."
NCAA: "The NCAA believes that the O'Bannon antitrust injunction claims are covered by the NCAA Videogame Settlement. The O'Bannon Plaintiffs believe they are not. The Parties agree that the Court has the authority to decide these issues."
