NCAA's credit outlook revised to 'negative'

Ed O’Bannon and the plaintiffs are seeking class-action status in their case against the NCAA. (AP)

By Zac Ellis

The NCAA’s credit outlook was revised to “negative” by the credit agency Moody’s on Monday in light of the recent Ed O’Bannon v. NCAA lawsuit making its way through federal court, according to the Wall Street Journal.

A federal judge last week heard arguments concerning class-action certification for the plaintiffs in the suit, led by former UCLA basketball star Ed O’Bannon. The plaintiffs seek compensation from video game and television broadcast revenue.

The agency’s report on the NCAA alluded to the eroding public perception of amateurism in today’s college sports.

“The escalation of risks reflect the growing perceived disconnect between the amateurism of student-athletes, as codified by the NCAA, and the commercial success of high-profile college sports,” the agency’s report said. “Increased public discourse about the best interest of student-athletes combined with highly publicized litigation could destabilize the current intercollegiate athletic system and negatively impact the NCAA and its member universities.”

Though no decision was made by Judge Claudia Wilken when both parties presented their arguments in Oakland last Wednesday, the possibility of class-action certification for all or part of the plaintiffs’ side is not dead, SI.com’s Stewart Mandel wrote last week. If class-action status is granted, thousands of current and former student-athletes could join the case, significantly increasing the potential damages to the NCAA. SI.com’s Andy Staples thinks it won’t be long before a current student-athlete joins the case.

A non-profit, the NCAA listed $614 million in total assets in its most recent tax filings.

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