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 ┬áthe 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. Summer mixtape of five-star guard Markelle Fultz (VIDEO)

    Jul 31, 2015, 10:00 PM EDT

    markelle fultz

    Markelle Fultz was one of the best players during the July live evaluation period.

  2. Five-star Class of 2016 guard Frank Jackson cancels visit and sets official to Duke

    Jul 31, 2015, 8:45 PM EDT

    (adidas) (adidas)

    Duke gets a huge official visit in late August from a five-star guard.

  3. UCLA gets commitment from Class of 2019 guard and brother of five-star commitment

    Jul 31, 2015, 7:15 PM EDT

    Getty Images Getty Images

    LaMelo Ball, a 13-year-old guard, committed to UCLA like his two older brothers.

  4. Michigan State guard returns from multiple foot injuries

    Jul 31, 2015, 5:45 PM EDT

    Maryland v Michigan State Getty Images

    Michigan State sophomore guard Javon Bess will try to stay healthy and in the rotation next season.

  5. Richmond lands its second 2016 commitment of the week

    Jul 31, 2015, 4:15 PM EDT

    Chris Mooney - UR AP

    Both are perimeter players, giving the Spiders additional depth moving forward.

  6. Four-star combo guard trims list to five schools

    Jul 31, 2015, 3:30 PM EDT

    Kelly Kline/Under Armour/Rivals Kelly Kline/Under Armour/Rivals

    McLaughlin de-committed from Washington in mid-May, but the Huskies remain in the mix.

  7. Appeals court grants stay of injunction in O’Bannon lawsuit

    Jul 31, 2015, 1:30 PM EDT

    ed o'bannon Getty Images

    The injunction would have allowed current and future players to be compensated for the uses of their names, images and likenesses.

  8. Kentucky announces plans for alumni game against former North Carolina players

    Jul 31, 2015, 12:03 PM EDT

    150731-UK-UNC Getty Images

    The two programs are ranked first and third, respectively, on the NCAA all-time wins list.

  9. Shooting guard Maverick Rowan’s junior season highlight video

    Jul 31, 2015, 11:07 AM EDT

    adidas adidas

    Louisville, NC State, St. John’s and West Virginia remain in the running for his pledge.

  10. Three-star guard Myles Powell trims list to eight

    Jul 30, 2015, 8:15 PM EDT

    Kelly Kline/Under Armour/Getty Images Kelly Kline/Under Armour/Getty Images

    Powell’s recruiting profile has risen thanks to the way he’s played throughout the summer.

  11. Power forward becomes Iowa’s second 2016 commitment

    Jul 30, 2015, 6:56 PM EDT

    Fran McCaffery AP

    With Jarrod Uthoff and Adam Woodbury being seniors, having two front court commits in 2016 is good news for the Hawkeyes.

  12. Italy trip comes at good time for young Stanford team

    Jul 30, 2015, 5:40 PM EDT

    Johnny Dawkins AP

    The Cardinal need to account for the loss of their top three scorers (and top two rebounders) from last season’s NIT champion team.

  13. Valparaiso star center receives extra year of eligibility

    Jul 30, 2015, 2:37 PM EDT

    Getty Images Getty Images

    The Crusaders are getting back the league’s defensive player of the year.

  14. Throwback Thursday: Donnie Tyndall’s only NCAA tournament win (VIDEO)

    Jul 30, 2015, 1:25 PM EDT

    Murray St Morehead St Basketball AP

    Tyndall’s one NCAA tournament win sure was memorable.

  15. Steady improvement turning Alize Johnson into valued Division I prospect

    Jul 30, 2015, 12:03 PM EDT

    Alize Johnson Alize Johnson

    The cousin of former Pitt forward Chevon Troutman has developed into a quality recruit himself.

  16. Report: SMU’s Larry Brown up against ‘lack of coach control’ charge

    Jul 29, 2015, 11:40 PM EDT

    Larry Brown AP

    According to the report SMU met with the NCAA Committee on Infractions last month.

  17. BYU lands third 2016 commitment in 6-foot-6 guard/forward

    Jul 29, 2015, 10:35 PM EDT

    Connor Harding, Zach Hillman AP

    Harding won’t join the program until 2018 however, as he’ll be taking his two-year LDS mission beforehand.

  18. Marquette coaches discuss daily ‘noon ball’ tradition (VIDEO)

    Jul 29, 2015, 8:50 PM EDT

    AP Photo AP

    Director of player personnel Travis Diener is pegged as the best player in the games, with he and assistant Chris Carrawell trading some good-natured shots at each other.