This is generally correct. There was more to the suit than just the video-game related likeness, and though I haven't read every document related to the suit, the essential issue was whether the myriad of actors could legally generate revenues associated with the class members' likenesses.
[From an anti-trust standpoint, this relates to group boycotts/refusals to deal. These "concerted actors" are acting to suppress the class' ability to sell their likeness and, in turn, the group reaps monopolistic-like rewards for the privilege.]
In addition, the court had to determine whether the NCAA's rules (regarding relinquishment of players' rights associated with these revenues) were "anti-competitive" in the sense that they were contrary to anti-trust law. The basis of the suit, at least from EA's standpoint, could be cured by getting away from the likeness of both current and former players, absent explicit contracts with each individual as opposed to "group licensing."
O'Bannon claimed the NCAA's practice of group licensing meant he could not individually choose to license himself out; this meant the supply of his license was restricted to the number of instances in which the NCAA/CLC chose to barter it, and in turn the price for his likeness was artificially inflated (basic economic supply and demand function).
[In terms of anti-trust law, this relates to output and/or capacity restrictions which are illegal under the Sherman Act].
The problem, of course, from EA's standpoint is doing the roster manipulation. If they randomly generated all rosters, it would still be possible to end up with players that look similar to the real-life counterparts. They would likely want to vet each and every player on every team to make sure there is no possible likeness. There's almost always bound to be some overlap, though, and I think that's why many schools and the NCAA will be reticent to get back on board.
Of course a big portion of the problem was the historical teams, and those are most certainly gone for good. I believe this is where O'Bannon's standing arose from (his likeness being on one of the historical teams featured, and as he claimed without his consent and without him receiving royalties for the use).
An in-game editor would
probably withstand legal scrutiny, as EA wouldn't technically be marketing players' likenesses and the NCAA would most certainly have nothing to do with the editor itself, but I think one could argue there's still a bit of a grey area. In my own opinion I don't think an editor is illegal
per se, but it could possibly be challenged, and EA most certainly wants to avoid any grey areas.
- For clarification's sake, anti-trust is not my field of expertise, but I do have some limited experience in it.