Skip to content

NCAA’s credit outlook now negative, in part because of Ed O’Bannon case

Jun 24, 2013, 9:59 PM EDT

NCAA Men's Final Four - Practice Getty Images

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

Latest Posts
  1. Indiana freshman Max Hoetzel to transfer out of the program

    Mar 27, 2015, 12:43 PM EDT

    Getty Images Getty Images

    Two transfers in one week is not a good thing.

  2. The making of the Final Four court (VIDEO)

    Mar 27, 2015, 11:20 AM EDT

    Print

    It’s pretty cool to see this process in action.

  3. Wichita State assistant Steve Forbes to take over at East Tennessee State

    Mar 27, 2015, 10:31 AM EDT

    STEVEFORBES150X2201

    Forbes spent two years as an assistant at Wichita State.

  4. Tennessee fires head coach Donnie Tyndall after one season

    Mar 27, 2015, 9:08 AM EDT

    cd0ymzcznguwzdbhnduynddiytjhm2yyzthlmtjjotqwyyznpte3owi1njbhnjg0mtc2yjbkzdgzmdzhnzm2mtbjytc1 AP

    Tennessee has parted ways with head coach Donnie Tyndall after only one season.

  5. Tourney Snacks: Kentucky, Notre Dame win in Midwest; Arizona, Wisconsin advance to set up Elite Eight rematch

    Mar 27, 2015, 1:45 AM EDT

    (AP) AP

    The Elite Eight will feature a rematch in the West Regional between Arizona and Wisconsin and Kentucky battling Notre Dame in the Midwest Regional.

  6. Updated tournament records: Kentucky moves SEC above .500

    Mar 27, 2015, 1:00 AM EDT

    AP Photo AP Photo

    Kentucky’s win also means that the Big 12 is down to one team: Oklahoma.

  7. No. 2 Arizona pulls away from No. 6 Xavier, setting up West regional final rematch

    Mar 27, 2015, 12:59 AM EDT

    (AP) AP

    Arizona played slightly better on both ends of the floor in the second half, and they’ll take on No. 1 Wisconsin as a result.

  8. Kentucky responds to Daxter Miles Jr.’s pregame comments

    Mar 27, 2015, 12:48 AM EDT

    Getty Images Getty Images

    If you are going to talk, you better be able to back it up

  9. Tip times, announcer pairing and channel guide for 2015 Elite 8

    Mar 27, 2015, 12:19 AM EDT

    AP Photo AP Photo

    The schedule for Saturday has been released.

  10. #POSTERIZED: Jalen Reynolds dunks on Kaleb Tarczewski (VIDEO)

    Mar 27, 2015, 12:11 AM EDT

    Jalen Reynolds Jalen Reynolds

    Jalen Reynolds dunks everything he gets his hands on, it seems.

  11. No. 1 Kentucky dominates No. 5 West Virginia to advance to Elite 8

    Mar 27, 2015, 12:06 AM EDT

    (AP) AP

    No. 1 Kentucky looked completely dominant in an easy win over No. 5 West Virginia.

  12. Sam Dekker, Frank Kaminsky lead No. 1 Wisconsin to second consecutive Elite Eight

    Mar 26, 2015, 9:59 PM EDT

    (AP) AP

    After Dekker scored 15 points in the first half, Kaminksy scored 15 in the second half for the Badgers.

  13. USC sophomore guard Kahlil Dukes to transfer

    Mar 26, 2015, 6:20 PM EDT

    Getty Images Getty Images

    Dukes averaged 2.1 points in 7.2 minutes of action per game.

  14. Josh Jackson, No. 1 player in Class of 2016, cuts his list to nine schools

    Mar 26, 2015, 5:35 PM EDT

    2014 Under Armour Association Finals

    Josh Jackson, the No. 1 player in the Class of 2016, is down to nine schools.

  15. Virginia Tech’s leading scorer Adam Smith to transfer, will be eligible immediately

    Mar 26, 2015, 4:24 PM EDT

    AP Photo AP

    Adam Smith averaged a team-high 13.4 points per game as a redshirt junior.