More than 20 current and former athletes sued, saying that players should share in the profits of college athletics, a highly lucrative business in which universities reap billions of dollars from men's football and basketball.
U.S. District Judge Claudia Wilken in Oakland, California, on Friday issued an injunction to allow students to recover some revenue generated from use of their names, images and likenesses. Wilken did not put the injunction on hold pending appeal but said it will not take effect until the start of the next recruiting cycle.
“We disagree with the Court's decision that NCAA rules violate antitrust laws," said NCAA Chief Legal Officer Donald Remy.
"We note that the Court's decision sets limits on that compensation, but are reviewing the full decision and will provide further comment later. As evidenced by yesterday’s Board of Directors action, the NCAA is committed to fully supporting student-athletes."
The ruling adds to the mounting legal, political and public pressure for colleges to share the revenue athletic programs generate and give student athletes better benefits. In April, football players at Northwestern University became the first U.S. student athletes to vote on whether to unionize.
The majority of college athletes do not go on to play professionally and critics say the NCAA's current scholarship policy short-changes athletes who risk injury and devote many hours to practice sessions, travel and competition.
Earlier this week, the NCAA gave the five biggest college conferences broader authority to set their own rules on areas such as scholarships, insurance and travel for athletes' families.
The NCAA grosses roughly $770 million per year in media rights for its annual Division I men's basketball tournament, known as March Madness, which are then shared with member schools.
The richest conferences, however, generate billions of dollars each year exclusively for themselves through media contracts and their own cable TV networks, primarily on the popularity of football and men's basketball.
Wilken's ruling follows a three week bench trial earlier this summer. The judge ordered the NCAA to allow schools to hold a limited share of licensing revenue in trust for recruits, payable when they leave school or when their eligibility expires.
The NCAA is still allowed to enforce rules that ban student-athletes from endorsing commercial products, Wilken ruled.
The case in U.S. District Court, Northern District of California is In Re NCAA Student-Athlete Name & Likeness Licensing Litigation, 09-1967.