NCAA athlete pay: How a California bill could change the business of college sports

Is “Fair Pay to Play” Fair in College Sports? What California’s New Law Means for the Future of Amateur Athletics

NCAA athlete pay: How a California bill could change the business of college sports

Saturday, November 9, 2019

On September 30, 2019, Governor Gavin Newsom signed California legislation—Senate Bill (SB) 206—that would permit college student athletes to benefit financially (for example, from endorsement deals) from their names, images, and nesses while still in school.

Governor Newsom signed the Fair Pay to Play Act, which Senator Nancy Skinner (D-Berkeley) and Senator Steven Bradford (D-Gardena) sponsored, with much fanfare, alongside a high-profile professional basketball player and several former college student athletes.

The new law is scheduled to take effect in January 2023.

Several other states, including Florida, Illinois, and Georgia, are reportedly considering similar legislation, and some expect federal legislation since the Supreme Court of the United States refused to hear an appeal in a case involving a similar issue several years ago. In October 2016, the Supreme Court denied certiorari requested in O’Bannon, et al. v.

NCAA, et al., by both the plaintiffs and the National Collegiate Athletic Association (NCAA). That decision meant that a Ninth Circuit Court of Appeals decision from September 2015, which upheld a lower court’s ruling that the NCAA’s amateurism rules violated federal antitrust laws, remained in effect.

That Ninth Circuit decision also rejected a court order that the NCAA could no longer enforce its rules limiting payments to athletes. Since then, U.S. senators Mitt Romney (R-UT) and Bernie Sanders (D-VT) have publicly supported the idea of a free-market approach to permitting college athletes to earn compensation from their names, images, and nesses.

Given this history, the current notion of amateurism may be ending.

Senator Skinner cited the financial revenue generated by athletes as support for the legislation, stating, “For decades, college sports has generated billions for all involved except the very people most responsible for creating the wealth. That’s wrong.

” Senator Bradford also noted a financial imbalance as a justification for the bill: “While our student athletes struggle to get by with basic necessities such as food and clothing, universities and the NCAA make millions off their talent and labor.

College coaches are now some of the highest paid employees in the country because of the talented young men and women who play for them.”

The NCAA’s Response

Meanwhile, in response to Governor Newsom’s signing of SB 206, the NCAA stated that it agrees that “changes are needed to continue to support student-athletes, but improvement needs to happen on a national level through the NCAA’s rules-making process.” According to the statement:

Unfortunately, this new law already is creating confusion for current and future student-athletes, coaches, administrators and campuses, and not just in California.

We will consider next steps in California while our members move forward with ongoing efforts to make adjustments to NCAA name, image and ness rules that are both realistic in modern society and tied to higher education.

As more states consider their own specific legislation related to this topic, it is clear that a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field for 1,100 campuses and nearly half a million student-athletes nationwide.

Prior to California’s enactment of SB 206, the NCAA’s Board of Governors Federal and State Legislation Working Group, which included “presidents, commissioners, athletics directors, administrators and student-athletes,” had studied ways to permit athletes to receive additional compensation. The group submitted comprehensive recommendations to the NCAA’s Board of Governors on October 29, 2019, recommending that athletes be permitted to “benefit from the use of their name, image and ness in a manner consistent with the collegiate model.”

The View From the Sidelines

There are multiple secondary effects of California’s legislation. On the one hand, California colleges are expected to have an advantage in recruiting athletes, as the new legislation would give some athletes the potential for financial gain.

On the other hand, the NCAA’s response seems to indicate that the NCAA may change its rules in the near future rather than face “a patchwork of different laws from different states.

” The NCAA has also reportedly threatened to keep California schools championship games, contending that allowing students rights to their names, images, and nesses will give California schools an unfair advantage in recruiting.

Caught between these two forces are the colleges that are NCAA members. For their part, member schools in California will have to decide if they will leave the NCAA or comply with California’s law and defy the NCAA’s rules.

Can the NCAA Ban California Schools?

Before Governor Newsom signed the Fair Pay to Play Act, the NCAA issued a letter to the governor stating:

California Senate Bill 206 would upend that balance.

If the bill becomes law and California’s 58 NCAA schools are compelled to allow an unrestricted name, image and ness scheme, it would erase the critical distinction between college and professional athletics and, because it gives those schools an unfair recruiting advantage, would result in them eventually being unable to compete in NCAA competitions. These outcomes are untenable and would negatively impact more than 24,000 California student-athletes across three divisions.

. . .

We urge the state of California to reconsider this harmful and, we believe, unconstitutional bill and hope the state will be a constructive partner in our efforts to develop a fair name, image and ness approach for all 50 states. [Emphasis added.]

Despite these statements, there’s a question of whether the NCAA can lawfully ban California schools from competing because they are following a state law.

Senator Skinner has noted that a ban on California schools would constitute an antitrust violation: “Numerous legal scholars assert that SB 206 is constitutional and that an NCAA ban of California colleges from championship competition is a clear violation of federal antitrust law.”

Proponents of the new law assert that Section 1 of the Sherman Act precludes the NCAA from banning California schools simply for complying with state law, as it would arguably constitute an illegal form of wage fixing and an unlawful restraint of trade. For now, the NCAA has not taken any legal action against California to test whether a ban on California schools would survive antitrust scrutiny.

With California’s law not taking effect until 2023, the schools, athletes, and NCAA have time to prepare for a new order in college sports, even if the exact form is still unknown. In the interim, the only certainty is that change is coming and college sports will never be the same.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume IX, Number 313


What California bill means for NCAA image and ness debate

NCAA athlete pay: How a California bill could change the business of college sports
playThe 'Fair Pay to Play Act' explained (2:52)

Dan Murphy explains the landmark “Fair Pay to Play Act,” which would allow financial compensation for collegiate athletes in California. (2:52)

Oct 1, 2019

The NCAA now has an official deadline to decide how it will respond and react to a new California law that the organization believes is an existential threat to the current collegiate sports model.

On September 30, California Gov. Gavin Newsom signed the Fair Pay To Play Act, which opens the door for college athletes in that state to collect money from endorsement deals without fear of losing their NCAA eligibility or scholarships. The law, first proposed by Berkeley-based state Sen. Nancy Skinner, will go into effect in January 2023.

That gives the NCAA and every other state in the U.S. a three-year window to figure out how they will respond. A lot is ly to change in that time. The law has spawned plenty of confusion and concern about the future of college sports. Here's some basic background to get you up to speed on how we got here, and what might be coming next.

Who will be paying California's college athletes?

Paychecks to athletes won't be coming from the schools themselves — at least not any more than the athletes already receive. NCAA rules allow colleges to provide their student-athletes with tuition, room and board, a stipend to cover some basic costs for attending college and a long list other non-monetary benefits free food and clothing.

Instead, the law creates an unrestricted market for others who want to use the athlete's name, image or ness. Money could come in the form of major brands Nike or McDonald's using the athletes in commercials.

It could also come from small businesses car dealerships putting an athlete on a local billboard or memorabilia shops paying an athlete to show up for an autograph session for fans.

Athletes could also make money themselves by monetizing social media feeds, selling T-shirts online or advertising to give lessons in their sport to younger kids. The new law allows athletes to hire an agent to help manage the process.

Is California the only state with this new law?

For now, California is on its own. Several other states have discussed similar proposals and some of them anticipate starting the legislative process to make their own laws in the coming months.

Lawmakers in Colorado, Florida, Maryland, Nevada, New York, North Carolina, South Carolina, Pennsylvania, Minnesota and Washington state have all floated at least some kind of similar idea. There is also a proposal making its way through the U.S.

House of Representatives that would have the same effect on a national level.

Some of the state proposals — New York and South Carolina — are attempting to go beyond guaranteeing athletes' their name, image and ness rights and would require schools to set aside more money for their players. Florida is hoping to dramatically shorten the NCAA's timeline to change. One Florida lawmaker said he hopes to have a new law in place by April 2020.

How does the NCAA feel about all this?

The NCAA and leaders from the conferences and universities that comprise its membership remain opposed to California's new law. The organization said the law is “creating confusion” among current and future student-athletes.

The Pac-12 said it is afraid the law will have “very significant negative consequences” for athletes due to the unintended consequences of professionalizing college sports.

SEC commissioner Greg Sankey told Sports Illustrated he was concerned that individual states having different laws will make it hard to manage a nationwide group of colleges.

Sankey and the NCAA both acknowledged that some change is needed. The association and its members, though, want to be the ones to dictate what those changes are and when they take place.

What is the NCAA going to do about it?

The NCAA formed a working group in May to examine the possibility of updating the way it handles name, image and ness rights. The group of university presidents, conference commissioners and athletic directors are planning to provide recommendations to the NCAA's board of governors at the end of the October.

Ohio State athletic director Gene Smith, one of the co-chairs of the group, told reporters the day after California's law was signed that it was “a complex issue” and he was worried about how the NCAA and schools would monitor “bad actors” in an open market.

NCAA President Mark Emmert asked California lawmakers to hold off on creating their law until the NCAA had a change to reviews it own rules. Skinner, the bill's author, said the NCAA has had decades to change its rules and was in need of some legislative pressure to be forced to act.

Are California schools going to be kicked the NCAA?

If the NCAA doesn't change its rules before 2023, there could be a standoff between California and the NCAA. The NCAA has said the law would prohibit schools in California from participating in NCAA events.

The association also has argued that the new law is unconstitutional because it infringes on the NCAA's right to conduct interstate business. Proponents of the law disagree and say that kicking California schools the NCAA would be a violation of federal antitrust laws.

Those arguments would ly lead to lawsuits decided in court.

However, politicians and athletic directors in California both think it's unly that the conflict will ever reach that point.

What about Title IX issues?

Among the Pac-12's arguments against the Fair Pay To Play Act was a suggestion that the law will negatively impact female athletes more than male athletes. The conference isn't alone in questioning how changing college athlete compensation could affect women's sports, which generate less money than men's sports.

Title IX is a federal law that prohibits colleges and universities from discriminating against any group on the basis of their sex.

In the sports world, that means providing equal opportunities for female and male students to participate on college teams and receive equal benefits from the school for doing so.

California's new law provides the same opportunity for female athletes to collect endorsement money as it does for male athletes. Because the schools aren't paying themselves, they don't have to make sure the amount of money is equal, only that the opportunity is.

Some have argued that if money starts to flow to players directly instead of through the athletic department, there will be fewer dollars to support non-revenue teams.

The fear is that schools will have to eliminate some of their teams to make ends meet if their budget shrinks significantly.

However, Title IX would prevent schools from taking more opportunities away from their women than from their men.

Sen. Skinner, co-author Sen. Steven Bradford and Gov. Newsom all said they felt the law actually opens more doors for female athletes who can now promote themselves rather than relying on the schools, which typically spend most of their marketing budget on revenue sports football and men's basketball.

Who is Nancy Skinner and why does she care about paying college athletes?

Skinner is a state senator representing a district that includes Berkeley — the home of the Cal Golden Bears.

While a graduate student at Cal, Skinner was part of an effort to organize graduate assistant teachers to ask for better benefits. She also attended lectures led by Dr.

Harry Edwards, an outspoken advocate for black athletes who has long considered the NCAA's amateur rules a method of exploitation.

Skinner says she sees her bill as a way to correct a civil rights issue and unfair labor practices that affect all college athletes regardless of their race. Skinner co-wrote the bill with Bradford and with the help of several economists and activists who have been working on this issue for nearly 20 years.


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