A judge said California high schoolers haven’t defined a plausible market for their name, image and likeness rights, potentially dooming their antitrust case against the state’s high school sports federation.
(CN) — Patrick Hall spent his junior year playing varsity football for Mater Dei High School in Santa Ana, appearing in his school’s promotional content along the way. He was never paid for it, and under the rules of the California Interscholastic Federation, he couldn’t be.
That rule, which bars student athletes from licensing their name, image and likeness when it’s tied to their school jersey, insignia or team affiliation, was what was left of a class action that once challenged nearly every restriction the federation places on high school sports.
U.S. Magistrate Judge Laurel Beeler dismissed the case Thursday, ruling for the second time that the plaintiffs have not identified a plausible market that could support an antitrust claim.
The federation and its 10 regional sections govern interscholastic sports for California high schools. Beeler had already ruled previously the federation’s rules capping athletic awards and restricting transfers are protected under the state-action immunity doctrine from Parker v. Brown, which shields those rules from federal antitrust challenges.
Only the NIL licensing rule survived that ruling, only for Beeler to strike that down as well.
The plaintiffs tried to fix the market-definition problems Beeler flagged the first time. It narrowed the athlete labor market to California varsity athletes, split it into a separate submarket for each sport and argued that a national market exists for broadcasters and advertisers who want to use those athletes’ likenesses. It also added Hall as a plaintiff to establish standing.
But Beeler still wasn’t persuaded. She found the statewide labor markets implausible because the suppression the athletes point to comes from the amateurism and transfer rules she already ruled immune, not from the NIL rule being challenged. The national market didn’t fare better.
“The amended complaint still does not explain why California high-school NIL is not reasonably interchangeable with the NIL of athletes in other states or with the NIL of other athletes who play different sports at different skill levels,” Beeler wrote.
Setting market definition aside, Beeler found a second, independent problem: The athletes can’t show the NIL rule caused their purported losses.
Their two theories — that they’re owed direct payments from schools and a cut of broadcast revenue — are both foreclosed by other rules and a state statute, rather than by the NIL licensing rule itself.
“An injury that an independent lawful constraint would inflict is not injury caused by the challenged conduct,” Beeler wrote.
On the broadcast theory, Beeler pointed to a provision of California’s right-of-publicity statute providing that a broadcast use of a student-athlete’s likeness does not require consent.
Because the statute independently permits that use without the consent the plaintiffs claim would support compensation, she reasoned, the athletes can’t attribute a lost share of broadcast revenue to the federation’s separate NIL rule.
Beeler left the plaintiffs a possible revival option: a narrower theory of a plausible market for school-affiliated NIL licensing outside of broadcasting, paired with an injury theory tied specifically to the challenged rule. She barred the plaintiffs from reviving the labor-market or broadcast-NIL theories she just rejected.
Representatives for the plaintiffs and the California Interscholastic Federation did not immediately respond to a request for comment.
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