California defies NCAA, will allow college athletes to earn from endorsement deals, hire agents to represent them

The NCAA called the move unnecessary saying the athletes are already compensated in the form of academic scholarships and cost-of-attendance payments


                            California defies NCAA, will allow college athletes to earn from endorsement deals, hire agents to represent them
(Source : Getty Images)

In a first-in-the-nation move, California Governor Gavin Newsom signed a bill on Monday, September 30, that makes state’s college athletes eligible to earn money from endorsement deals and hire agents to represent them.

The bill will take effect on January 1, 2023, and could go on to change the course of amateur sports in the country. But not without sparking a major battle as the bill defies the National Collegiate Athletic Association (NCAA) that nationally regulates collegiate sports.

The Democratic governor signed the 'SB-206' or ‘Fair Pay to Play Act’ alongside Los Angeles Lakers forward LeBron James on an episode of the latter’s HBO show ‘The Shop’. Newsom said on the occasion that the move is “the beginning of a national movement—one that transcends geographic and partisan lines.”

James is a big supporter of the idea of paying college athletes. As is Democratic presidential runner Bernie Sanders, who said in a tweet last month: "College athletes are workers. Pay them."

'A bankrupt model'

"Collegiate student athletes put everything on the line—their physical health, future career prospects and years of their lives to compete. Colleges reap billions from these student athletes' sacrifices and success but, in the same breath, block them from earning a single dollar," Newsom said in a statement. He called it a “bankrupt model” and wanted it to be “disrupted”. While California became the first state to make such a law, Newsom was optimistic that other states will follow suit. 

California’s new path puts it at odds with the policies that are currently practiced under the NCAA.

Under the current laws, college students can not sell the rights to their names or images to another person/company for money. The NCAA is against making student-athletes eligible to accept compensation for “the use of his or her name or picture to advertise, recommend or promote directly the sale or use of a commercial product or service of any kind”.

The NCAA had opposed the bill when it was passed in the legislature saying that it would create an inequality between universities of varying sizes on the playing field.

As far as the compensation to the college athletes are concerned, the NCAA said that the athletes are already compensated in the form of academic scholarships and cost-of-attendance payments but the critics are not convinced. They cited the cases of actors and singers who can earn by showcasing their talents while studying at the university and questioned why the same could not be applied for talented college players. 

In a letter dated September 11 that the NCAA wrote to Newsom opposing the law, the 22-member board of governors of the NCAA said the bill will scrap fairness and equal treatment which “forms the bedrock” of college sports. 

Reactions to the bill

One would have expected the NCAA not to feel amused by the developments in California. The body released a statement on Monday, though its tone was less antagonistic. While it said "changes are needed to continue to support student-athletes", it also warned that “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 likeness rules that are both realistic in modern society and tied to higher education,” it added.

The NCAA is not the only body to be disappointed by the move. The Pac-12—a Power Five conference with four schools in California—also felt that California’s decision will see professionalization of college sports. 

What happens now?

It is still early to say how this is going to head, but looks like California was the first to score. Since it’s over three years before the law comes into effect, more twists and turns will certainly be in play. Legal battles will be something most expect to see in the future.

The NCAA has already threatened to ban California schools from competing for NCAA championships and called the bill “unconstitutional”.

On the other hand, Nancy Skinner, member of the California State Senate and one of the authors of the bill, has warned that any kind of retaliation from the collegiate sports’ governing body would be considered a violation of law. The new scenario is also likely to impact the recruiting and scheduling patterns for players. Besides, financial stakes in the dispute are also high.

Other states mulling similar moves

The NCAA will however not like to see California’s efforts gaining traction elsewhere. Already, lawmakers in three states—Illinois, New York and South Carolina—have either introduced bills on similar lines or are planning to do so. The NCAA’s statement issued on Monday has expressed its apprehension over such an outcome saying: “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.”