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

Fair Pay to Play: Is the NCAA learning an expensive lesson?

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

Last month, lawmakers in California delivered a shock to the US college sports system by passing a bill that will permit student-athletes in the state to make money from their name, image and ness for the first time.

It was a landmark move that could have far-reaching implications for the National Collegiate Athletic Association (NCAA) and its multi-billion dollar enterprise – provided it survives the inevitable legal challenges.

What’s in the bill?

Senate Bill 206 – also known as the Fair Pay to Play Act – prevents the NCAA, its member conferences and universities from punishing athletes for being paid for the use of their name, image, and ness.

Signed into law by California governor Gavin Newsom at the end of last month, it is due to come into effect on 1st January 2023, at which point student-athletes in the state will be permitted to sign endorsement deals and licensing contracts, as well as hiring state-licensed agents for commercial representation.

Crucially, schools in California will not be forced to pay students as employees. Some state legislators –  including senator Nancy Skinner, who authored the original bill – had supported that idea, but the pared-down Fair Pay to Play Act was ultimately seen as a necessary compromise to bring about enforceable change.

California governor Gavin Newsom signed the Fair Pay to Play act into law in September

Who supports the bill?

It is fair to say support for California’s bill is far-reaching, with backers hailing from both sides of the political divide. Among the most prominent supporters of student-athlete compensation is basketball star LeBron James, and it was on his HBO show, The Shop, that Newsom made an appearance to sign the bill into law.

“I don’t want to say this is checkmate, but this is a major problem for the NCAA,” said Newsom, explaining his decision. “It’s going to change college sports for the better by having now the interests, finally, of the athletes on par with the interests of the institution. Now we’re rebalancing that power arrangement.”

The NCAA’s detractors insist the governing body’s long-held policy of amateurism is, at best, outdated, unfair and immoral; at worst, they deem it to be flagrant exploitation of a labour force that essentially helps to prop up a college sports system that generated more than US$14 billion last year.

“SB 206 addresses this civil rights issue of today, which is about fairness and equity,” California state senator Steven Bradford said in a statement. “Our colleges and universities should no longer treat student-athletes as chattel, but as the valued individuals they are.”

One argument often cited by NCAA critics is that college scholarship students in other subjects and disciplines are already able to earn money – musicians, for example, are allowed to play paid gigs. That athletes are not afforded the same luxury thus seems wholly unjust.

“While we have made significant progress in recent years, we have not always responded to the needs and rights of our players swiftly, and frankly, we’re playing catch-up after years of stagnant rules,” Mike Krzyzewski, the basketball coach at Duke University, said in a statement issued last week.

“I hope and trust that not only will there be a plan to put the student-athletes’ best interests at the forefront, but that we’ll also have a firm plan for implementation at the national level.”

How has the NCAA responded?

The NCAA, which operates as a non-profit, tax-exempt organisation, has long been vehemently opposed to any legislation that challenges its amateurism bylaws, yet there are signs its stance is softening.

A working group, set up in May and co-chaired by Ohio State athletic director Gene Smith, is currently exploring potential modifications to the organisation's rules, with its results expected to be made public later this month.

That, in itself, was a clear acknowledgement that amendments are required, but the NCAA says it, not the federal government or lawmakers in individual states, should have the right to decide what they are and how to implement the rules nationally.

In a statement, the governing body insisted that “a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field”.

Indeed, the notion of consistent, nationally enforceable legislation is central to the NCAA’s argument, and anything that goes against that is a non-starter.

Mark Emmert, the NCAA president, warned in June that California universities could be punished if the bill passed, with bans from national competition mooted as a possibility.

In California, meanwhile, strong opposition has come from university administrators and athletic directors who fear being expelled from NCAA competition. According to the New York Times, California schools and their supporters collectively forked out more than US$500,000 lobbying state legislators on various issues in the lead up to last month’s ruling.

California, America’s most populous state, currently boasts two-dozen NCAA division one schools, including four that compete in the Pac-12 Conference, whose commissioner, Larry Scott, has said he is “firmly against anything that would lead to a pay-for-play system”.

“One thing is clear: this issue simply cannot be addressed on a state-by-state basis,” Scott said in a recent interview with Cynopsis Media. “I think we all know that just can’t work.

In fact, it’s pretty clear from their remarks in the media that even many of the legislators who passed this California bill know that, and their intent was to send a message to the NCAA that they want change.

I understand that. 

“But the bill’s flaws go even deeper.

Rather than a narrowly and carefully tailored effort to address this issue, it would effectively create a free-for-all in which large payments to a relative handful of star athletes from boosters and others could be thinly disguised as payment for the use of their name, image and ness. In no time, recruitment in certain sports would become a cash-driven competition with essentially no limits on pay-to-play.”

Scott added that implementation of the bill would lead to “unintended consequences” and will hit women’s and Olympic sports hardest, with “massive amounts of dollars redirected to paying people to play revenue sports football and basketball”. Others have gone so far as to suggest it could spell the end of Title IX legislation, which prohibits organisations from discriminating against any group on the basis of gender.

The NCAA has voiced similar concerns – although some female athletes have indicated that college may be the only time in their careers in which they can capitalise on their talents. It has also been argued that if money flows towards the most powerful sports and institutions, smaller ones could be forced business.

From a purely athletic standpoint, some argue that the Fair Pay to Play Act will also give California schools a competitive advantage when it comes to attracting top talent, with the biggest, wealthiest organisations hoovering up the best athletes. Yet others see it actually working against them, not least if those schools are barred from competing at the national level.

NCAA president Mark Emmert said in June that California universities could be punished if the bill passed

What’s the bigger picture?

Make no mistake: US college sport, particularly football and basketball, is hugely lucrative. Many millions attend and tune in for major events March Madness, the NCAA’s annual basketball showpiece, or football’s bowl games, which in turn helps to generate substantial income from ticketing, sponsorship, advertising and merchandise.

The NCAA itself generates annual revenues in excess of US$1 billion, almost three quarters of which comes from a mammoth multimedia rights contract with CBS and Turner Broadcasting System. Some 30 US universities’ athletic departments make over US$100 million a year, with top coaches earning handsome seven or even eight-figure salaries that include hearty performance-related bonuses.

Student-athletes, by contrast, do not receive a penny. Instead, they are forced to settle for tuition scholarships, 'cost of attendance' stipends over and above basic expenses accommodation, and other non-monetary benefits  food and free clothing.

It is true that the top student-athletes generally have it good – not only are they granted free education, allowing them to graduate debt-free, but they also enjoy access to world-class coaching, state of the art facilities, and a clear pathway directly to the professional leagues.

Yet the disparity inherent within the NCAA’s economic model creates a host of other challenges, opening up the system to corrupt influences.

An I investigation in 2017, for example, exposed a network of corruption in men’s basketball, where top coaches were being offered illicit payments by agents and sportswear brands to ensure the best athletes sign with schools sponsored by those companies.

There have also been legal challenges to the NCAA’s amateurism rules in the past.

In 2009, for instance, former UCLA basketball player Ed O’Bannon filed a class-action lawsuit claiming that not compensating students for use of their nesses was a violation of federal antitrust law.

In 2014, a federal judge in Oakland ruled in favour of the plaintiffs, leading the NCAA to halt production of EA Sports’ NCAA Football video game.

Such episodes have highlighted structural weaknesses in the college sports system, yet California’s ruling strikes at the very heart of the NCAA’s ideals.

The question, then, is how long the governing body can continue to maintain its distinction between professionals and amateurs – particularly at a time when athletes globally are growing ever more acutely aware of their own worth, and public figures from all walks of life are increasingly able to monetise their personal ‘brands’ through social media and other on and off-line activities.

The NCAA generates annual revenues in excess of US$1 billion

What will happen next?

Clearly, California’s ruling has served as a catalyst in the nationwide push for fair compensation in US college sports.

Following its decision, lawmakers in at least ten other states, including Illinois, Pennsylvania, Florida, Washington and Colorado, are considering similar moves.

In New York, legislators are planning to go a step further by introducing a law that requires colleges to pay 15 per cent of ticket sales income to student-athletes.

The release of the NCAA working group’s report later this month should help move the conversation on further, but the broader implications of California’s ruling are not yet clear.

What is known is that some other states are planning to introduce new laws before 2023 – Florida wants to implement its proposal as early as April 2020 – thereby giving the NCAA less time to appeal, while on Capitol Hill support is growing for the implementation of federal legislation. 

Some lawmakers, including those in California, have indicated that if the NCAA does change its rules in favour of student-athletes, their bills could be amended accordingly. The onus is therefore on the governing body to make the next move.


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.


What it means: How California bill will impact college sports, and what comes next

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

SportsPulse: Former NBPA Executive Director Charles Grantham spoke with Trysta Krick about his feelings on compensation for collegiate athletes. USA TODAY

California Gov. Gavin Newsom announced Monday that he has signed into law a bill that will allow college athletes in the state to profit off their name, image and ness — prompting cheers from activists and consternation from the NCAA.

Newsom signed the “Fair Pay to Play Act” alongside Los Angeles Lakers forward LeBron James on an episode of James' HBO show “The Shop,” describing it as a step toward “re-balancing” the power dynamic in college sports. 

But the law will not go into effect until 2023, and there are certainly a lot of questions that still need to be answered between now and then.

In the meantime, here's a quick look at what the bill aims to accomplish, and what it means for schools, athletes and the NCAA moving forward.

California Governor Gavin Newsom (Photo: USA TODAY)

What does the bill do?

The California bill is not about paying athletes, but rather about clearing an avenue through which athletes can be paid.

Under current NCAA bylaws, college athletes are not allowed to sell the rights to their name, image or ness to another person or company in an effort to make money.

So someone Clemson quarterback Trevor Lawrence, for example, cannot authorize a T-shirt company to sell shirts with his face on them. Or endorse a brand of shoes or soft drinks.

Or team up with a local store to sell Lawrence bobblehead dolls and keychains.

This bill allows all of that, for athletes in California anyway — opening the door for a quarterback at USC or gymnast at UCLA to profit from their star power without necessarily being paid by their schools. It also, notably, allows college athletes to hire agents to help them navigate such deals.

(You can read the full text of the bill here.)

Why does this matter?

The NCAA has long positioned itself as an organization that oversees amateur sports. So even as coaching contracts have skyrocketed, conference executives have raked in millions of dollars and television contracts have reached eye-popping levels, it has insisted that athletes receiving revenue from outside sources would ruin what it calls “the amateur model.”

The NCAA has argued that athletes are fairly compensated for their athletic achievements because they are offered full academic scholarships and cost-of-attendance payments — which are intended to be used for cost-of-living expenses transportation. 

But critics say athletes' earning potential is unfairly limited, regardless of scholarship status. If a talented opera singer or actor at a university can monetize their talents while they're in school, critics argue, why can't a talented basketball or volleyball player?

How did the NCAA react?

As you could probably guess, given its stance on amateurism, the NCAA was not thrilled by Monday's news.

“Unfortunately, this new law already is creating confusion for current and future student-athletes, coaches, administrators and campuses, and not just in California,” the organization said in part of a statement released Monday.

“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.”

The Pac-12, a Power Five conference with four schools in California, also bemoaned the bill, claiming it will “lead to the professionalization of college sports.”

What happens now?

Because the new law will not go into effect until Jan. 1, 2023, expect plenty of public jockeying — and, in all lihood, legal action — between California and the NCAA over the next few years.

The NCAA has already threatened to ban California schools from competing for NCAA championships and called the bill “unconstitutional.” Meanwhile, one of the bill's authors, Sen. Nancy Skinner, has said that any retaliation from the NCAA would “be a violation of antitrust (law).”

Legal sparring aside, the bill will undoubtedly have short-term impact on recruiting and scheduling. For example: If the early posturing from both sides turns out to be true, someone who commits to play women's basketball at USC this week could one day have the benefit of profiting of her name, image and ness, but also not be eligible to play in the NCAA tournament.

Another short-term development that will bear watching is the release of a report from an NCAA panel that was appointed to study this issue. That report is expected to be presented at an NCAA board of governors meeting in Atlanta next month.

What about schools in other states?

While the California bill will affect only a fraction of NCAA athletes, it could very well fuel similar efforts in other legislatures across the country. Newsom, in a statement announcing Monday's news, called it “the beginning of a national movement.” 

Lawmakers in three states — Illinois, New York and South Carolina — have already introduced similar bills, or announced that they plan to do so, while legislative efforts in other states are ongoing.

Contributing: Steve Berkowitz

Contact Tom Schad at or on @Tom_Schad.


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