Jun 24, 2013, 9:59 PM EDT
The Ed O’Bannon case could be hurting the NCAA’s credit outlook, according to the Wall Street Journal.
Looks like the case is starting to affect other things outside the courtroom, with the case slowly catching on nationally after a slow start. O’Bannon, a former UCLA player, is looking to help former college players recoup royalties from their likenesses being used in video games.
The report marked the first time that litigation has emerged as a risk in a Moody’s report for NCAA debt. A federal judge in Oakland is weighing a class-action certification for the suit, launched by former UCLA basketball star Ed O’Bannon in 2009, that would add potentially thousands more current and former athletes to the case and expose to the NCAA to greater damages if it loses.
The NCAA’s credit rating has not changed, but the outlook presents a prediction of what it will be in the near future. This is especially true if the lawsuit O’Bannon is keying gains class status. The credit watch is a prediction that covers the next two years. Their current credit rating sits at Aa2, the third-highest rating available. If the case does gain class status, that would prompt the change, more than likely.
If the O’Bannon case gains class certification, Moody’s says the NCAA could face greater danger of a downgrade from the third-highest Aa2 rating, which would affect $40 million in debt the association took out in 2005 and 2010 to buy rights to basketball’s National Invitation Tournament and renovate its Indianapolis headquarters, among other expenses.
The NCAA is currently staring down $40 million of debt taken from 2005-2010.
Increasing interest in the case was the reason for the report. “We felt the trial has advanced to a point where it was worth looking at the credit again,” said Moody’s spokesman David Jacobson.
Follow David Harten on Twitter at @David_Harten
- 2015 College Basketball Updated Early Entry List 14
- Providence announces return of point guard Kris Dunn for 2015-16 season 0
- Five-star guard Malik Newman commits to Mississippi State 0
- UPDATED: 2015-2016 College Basketball Way-Too-Early Preseason Rankings 0
- Oklahoma guard Buddy Hield returning for senior season 0
- Arizona forward Stanley Johnson enters 2015 NBA Draft 2
- California guard Tyrone Wallace to return for senior season 0
- Duke lands commitment from elite PG Derryck Thornton, who will reclass (17)
- 2015 College Basketball Updated Early Entry List (14)
- Five-star Kentucky commit believes the NCAA will clear him to play (10)
- Five members of Iowa State’s 2014-15 team have been arrested after two more arrests this week (9)
- UPDATED: 2015-2016 College Basketball Way-Too Early Preseason Top 25 (9)