A Rapid Reaction to O’Bannon: The Need for Analytics in Applying the Sherman Act to Overly Restrictive Joint Venture Schemes

Posted by Social Science Research Network

A Rapid Reaction to O’Bannon: The Need for Analytics in Applying the Sherman Act to Overly Restrictive Joint Venture Schemes

Stephen F. Ross (Pennsylvania State University) & Wayne S. DeSarbo (Pennsylvania State University)

Abstract:     This Article reviews the recent and highly publicized district court decision holding that NCAA rules, which bar student-athletes from any compensation for image rights, violated the Sherman Act, and that big-time athletic programs could lawfully agree among themselves to limit compensation to $5,000 annually in trust for each athlete upon leaving school. This Article briefly discusses why the decision correctly found the current rule to be illegal, but also details why, under settled antitrust law, the critical question of how much compensation would significantly harm consumer appeal for college football and basketball is a question better left to marketing science experts. This Article then explains why neither the flawed survey offered in evidence by the NCAA, nor the anecdotal testimony of NCAA officials, should have been credited. Rather, this Article proposes, as a superior alternative, the use of conjoint analysis, a well-recognized technique of marketing science analytics employed to answer the critical legal question that the antitrust doctrine asks in cases like this.