The NCAA has been sued in a class-action lawsuit initially brought by a student-athlete who lost his scholarship and alleges a violation of federal antitrust laws.
The NCAA, according to the lawsuit filed in the Northern District of California, is making money off of the backs of college students and simultaneously standing in their way of getting a better deal. Annual revenues for the NCAA were $614 million while the direct expenses for operating the games totaled $59 million.
“We believe the monopoly is designed to safeguard the school sports programs’ profitability, which spawns multi-million-dollar coaching contracts and rich revenue streams for the schools,” said Steve Berman, managing partner of Hagens Berman Sobol Shapiro LLP.
The potential class for the lawsuit is large. It seeks to include any student that enrolled at a NCAA school and received a scholarship but had it reduced or removed.
Annual revenues for the NCAA’s 2007-2008 fiscal year were $614 million. The organization’s financial operations are also highly profitable. The direct expenses for operating the actual games amounted to just $59 million, making it possible for NCAA executives to treat themselves to perks normally associated with Fortune 500 companies. The organization’s Indiana headquarters cost an estimated $50 million, and the NCAA plans a $35 million expansion, according to the suit.
Related Resources:
- Lawsuit against NCAA seeks to remove limits on athletic scholarships (USA TODAY)
- Report: Recruiting of Nate Miles by UConn Violated NCAA Rules (FindLaw’s Common Law)
- NCAA Initial Eligibility Clearinghouse (FindLaw)
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