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 likeness 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 likeness. 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The NCAA’s detractors insist the governing body’s long-held policy of amateurism is, at best, outdated, unfair and immoral; at worst, they deem it to be flagrant exploitation of a labour force that essentially helps to prop up a college sports system that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 likeness. 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 like 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 out of 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 like 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 like accommodation, and other non-monetary benefits like 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 FBI 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 likenesses 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.
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 likeness 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 likeness. 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 morally wrong; 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 likeness. 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 like 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 out of 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 like 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 like accommodation, and other non-monetary benefits like 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 FBI 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 likenesses 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, meanwhile, 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.
Some lawmakers, including those in California, have indicated that if the NCAA does change its rules, their bills could be amended accordingly. The onus is therefore on the governing body to make the next move.
Getty Images
