CALIFORNIA vs NCAA
Updated: Jan 27
This article was originally published on October 2nd, 2019.
One of the current core tenets of the NCAA's identity and business model is student-athletes, amateur athletes who should not financially profit from their talents.
The state of California is looking to change this, after Governor Gavin Newsom (@GavinNewsom) signed the Fair Pay to Play Act, which will give collegiate athletes the ability to hire agents and make money through endorsement deals with apparel companies, soft drink makers, car dealerships and other sponsors, just like a professional athlete.
This sets up the possibility that leaders in the NCAA will have to choose between changing the rules for athletes nationwide or banning some of the country's biggest names from competitions.
The bedrock principle behind college sports is that student-athletes should not be paid beyond the costs of attending a university.
The HBO documentary, Student Athlete, would be one source that would highlight how this rule can have an adverse effect on collegiate athletes.
The documentary opened up the life of a former Rutgers football player, who after graduating was sleeping in his car while working multiple part-time jobs.
Only a fraction of college athletes eventually turn professional, and for the rest, “college is the only time they have to profit off their hard-earned athletic successes,” Hayley Hodson (@theHayleyHodson), a former Stanford volleyball player, said during legislative testimony in July.
Former NFL and college coach John Shoop (@coachjohnshoop) said, "The coaches are making millions of dollars and they're coaching players whose parents live below the poverty line."
"If you're a reasonable person, it's insane to build a $150 million recruiting facility, pay your head coach $10 million, the rest of your staff $20 million cumulative, but then say there's not enough money to help the players."
This inequality is evident throughout the collegiate level, former USC athletic director and NFL Hall of Famer, Lynn Swann (@Lynn88Swann), was seen signing memorabilia for $200 per autograph. If a current USC player had been seen doing this, the player would have been suspended from competing or had their scholarship taken away from them.
While compensation from outside parties is prohibited, the NCAA allows Division I players to receive tuition scholarships and the coverage of housing, books, and other expenses. The financial aid decreases greatly and is not offered to Division II and III players respectively.
What California has done with the Fair to Play Act is a game-changer. The California law passed both the Assembly (73-0) and the Senate (39-0) without a single no vote.
The law that will go into effect on January 1st, 2023, will prohibit its colleges and universities from upholding “any rule, requirement, standard, or other limitation that prevents a student of that institution participating in intercollegiate athletics from earning compensation as a result of the use of the student’s name, image, or likeness.”
Essentially, Governor Gavin Newsom has made it illegal for California colleges to deny their student-athletes opportunities to gain compensation for the use of their names, images, and likenesses.
Once the bill goes into effect in 2023, athletes at all of California’s 58 NCAA member institutions could hypothetically sign deals to do advertisements for a local car dealership or be paid to host a party or even negotiate with video game publishers for their avatars to appear in college sports video games.
The Act also authorizes college athletes to hire agents and other representatives to assist them in negotiating and securing commercial opportunities.
However, the bill does not give the right for college athletes to be paid a salary, by their schools.
Gov. Newsom and others within the California Government see it as an attempt to bring more fairness to big-money college athletics and let players share in the wealth that they create for their schools. Critics have long complained that universities are getting rich off the backs of athletes, often struggling to get by financially.
"Other college students with a talent, whether it be literature, music, or technological innovation, can monetize their skill and hard work," Gov. Newsom said. "Student-athletes, however, are prohibited from being compensated while their respective colleges and universities make millions, often at great risk to athletes' health, academics, and professional careers."
"A majority of these athletes, it's no secret, are African American," said Sen. Steven Bradford (@ElectBradford), a co-author of the bill. "It's an issue of fairness, and it's an issue that has been long overdue."
The legislation bypasses an NCAA ban on players receiving any compensation aside from scholarships. While also baring the NCAA from retaliating against the colleges and student-athletes.
"Look, they're a little panicked, because they recognize they're vulnerable. People are hitting this, not just in California, but all across the country, because the gig's up," Newsom said.
"Billions and billions of dollars, 14-plus billion dollars, goes to these universities, goes to these colleges, billion-plus revenue to the NCAA themselves," he said. "And the actual product, the folks that are putting their lives on the line, putting everything on the line, are getting nothing."
The bill has been amended several times, from its original form, including a recent provision that prevents athletes from signing endorsement deals that conflict with their team's sponsors. For example, a basketball player could not wear Nike products during team events if he or she plays for a school that is sponsored by Under Armour.
California State Senator Nancy Skinner (@NancySkinnerCA) believes others will follow California's lead and said the law's authors delayed its implementation for three years to give others a chance to catch up.
She highlighted that lawmakers from several states have contacted her office in recent months to ask about her proposal. Politicians in Florida, New York, Washington state, Colorado, Maryland, North Carolina and South Carolina have publicly supported the idea of creating similar laws in their states.
North Carolina Representative Mark Walker (@RepMarkWalker), has even proposed a change to the federal tax code that would force the NCAA to choose between giving athletes the rights to their names, images, and likenesses or risking the loss of their tax-exempt nonprofit status.
Senator Nancy Skinner also highlighted the benefit this bill brings to less prominent athletes, who could benefit from things such as being able to advertise their connection to their university team while teaching lessons to youth athletes or collect revenue from selling advertisements on social media accounts.
This will hugely benefit female athletes, who are afforded far fewer opportunities to make substantial money when they turn professional.
“College is the time when these women athletes have the spotlight on them,” said Senator Skinner.
She points to former UCLA gymnast Katelyn Ohashi (@katelyn_ohashi), whose floor routine went viral, attracting over 64 million YouTube views.
“What other human on the planet wouldn’t have been able to monetize their 60 million Youtube followers?” says Skinner. “Only the student-athlete.”
The NCAA is facing what sports law experts say is its worst crisis since President Roosevelt gathered the presidents of Harvard, Yale and Princeton in 1905 to hash out reforms to improve safety. An effort that would drive the creation of the NCAA the following year.
The NCAA has always insisted that college athletes are amateurs, and should not be able to profit financially from their talents.
As an organization, the NCAA has a lot at stake, with revenues of over $14 billion in 2018, the new law threatens the future viability of the organization.
Mark Emmert, the NCAA president, has claimed that by giving the opportunity for football and basketball players to be paid, it would increase their visibility and draw the attention away from less-attended sports.
The NCAA, along with a number of college sports conferences, are fighting the new law, arguing that it will bring chaos to college sports and “and make unattainable the goal of providing a fair and level playing field,” according to an NCAA statement.
Due to their opposition of the bill, the NCAA urged Gov. Newsom to veto it. In a letter to state legislative leaders, the NCAA's board of governors called the measure "harmful and, we believe, unconstitutional." It said California colleges would have an unfair advantage in recruiting star athletes, an edge that it said "would result in them eventually being unable to compete in NCAA competitions."
In a statement, the NCAA said it is working to revise its rules on making money off a player's name and likeness. But it said any changes should be made at the national level "through the NCAA's rules-making process," not through a patchwork of state laws.
"Unfortunately, this new law already is creating confusion for current and future student-athletes, coaches, administrators and campuses, and not just in California," it said.
The NCAA said it was considering "next steps in California while our members move forward with ongoing efforts to make adjustments to NCAA name, image and likeness rules that are both realistic in modern society and tied to higher education."
The Pac-12 conference would also release a statement saying that it is "disappointed" by the passage of the bill because the conference believes it "will have very significant negative consequences for our student-athletes and broader universities in California."
"This legislation will lead to the professionalization of college sports and many unintended consequences related to this professionalism, imposes a state law that conflicts with national rules, will blur the lines for how California universities recruit student-athletes and compete nationally, and will likely reduce resources and opportunities for student-athletes in Olympic sports and have a negative disparate impact on female student-athletes," the Pac-12 said in its statement.
"Our universities have led important student-athlete reform over the past years, but firmly believe all reforms must treat our student-athletes as students pursuing an education, and not as professional athletes. We will work with our universities to determine next steps and ensure continuing support for our student-athletes."
Furthermore, before the bill was signed the NCAA threatened to bar California universities from future competitions, meaning powerhouses such as the USC, UCLA, Stanford, and the University of California, Berkeley, could find themselves banned.
If that were to happen, California schools could form a new governing body and get schools from like-minded states to join, in a threat to the NCAA's dominance.
However, some athletic directors in California are concerned that the law will actually put their schools at a recruiting disadvantage if they stay in the NCAA. San Diego State athletic director John David Wicker (@jdwicker) said he's concerned that no out-of-state schools will be willing to schedule games with his teams.
Wicker said that if forced to choose between abiding by the state's law and following NCAA rules, he would likely follow NCAA rules.
In the weeks before the bill was passed, several high-profile figures voiced their support, including NBA superstars Lebron James (@KingJames) and Draymond Green (@Money23Green).
Both Lebron and Green stated the change as "overdue" and a potential game-changer for college athletes. Democratic presidential candidate Bernie Sanders (@BernieSanders) responded to James on Twitter, after the bill was passed, by saying, "College athletes are workers. Pay them."
James would say after the bill was passed, that even though he didn't attend college, the issue is personal for him because "I was one of those underprivileged kids."
"Obviously I was fortunate enough and talented enough to be able to skip college," James said.
"But for sure, I would have been one of those kids if I would have went off to Ohio State or if I would have went off to any one of these big-time colleges where pretty much that 23 jersey would have got sold all over the place - without my name on the back, but everybody would have known the likeness. My body would have been on the NCAA basketball game 2004, and the Schottenstein Center would have been sold out every single night if I was there.
"And coming from just me and my mom, we didn't have anything, and we wouldn't have been able to benefit at all from it, and the university would have been able to capitalize on everything that I would have been there for that year or two or whatever. So I understand what those kids are going through. I feel for those kids that have been going through it for so long."
Green, who played four seasons at college level, for Michigan State, before entering the NBA, told reporters, that college athletes spend so much of their time broke while the schools make "a ton of money off your likeness.''
Green would also add that the law will help college athletes who "have no voice", as "the NCAA is a dictatorship," adding "I'm tired of seeing people get ripped off, and I'm tired of seeing these college athletes being ripped off."
However, not everyone has been in favor of the new law. Heisman Trophy winner, Tim Tebow (@TimTebow), believes that college should be about following your dreams and contributing to an institution, as opposed to a means of making some money.
"If I could support my team, support my college, support my university, that's what it's all about. But now we're changing it from 'us'...from being an alumni where I care, which makes college sports special, to then okay it's not about 'us,' it's not about 'we.' It's just about 'me.'" Tebow added, "It changes what's special about college football. We turn it into the NFL, where who has the most money, that's where you go."
No matter whether you agree with the Fair to Play Act or not, something that has to be appreciated is that it forces the NCAA to act.
Left to their own devices, the NCAA would have rather added reforms to their own rules at a much slower rate.
However, outside forces are again forcing their hand, just like with the deregulation of TV broadcast rights, or with the cost of attendance scholarships.
The NCAA will not want different states to have different rules about likeness rights, but now they have a hard deadline to come up with a real solution.
The final result may not be as revolutionary when the final bill comes to fruition in 2023, as it seems in 2019, but it will unquestionably lead to more athletes being able to secure more money in their pockets, which without a doubt is a positive step.