The NCAA has long fought to preserve amateurism in collegiate sports. As a result, NCAA athletes have not been able to profit off of their name, image, and likeness (NIL). However, that recently changed when California Governor Gavin Newsom signed the Fair Pay to Play Act, making it legal for athletes at California universities to profit from selling the rights to their NIL starting in January 2023. 

The Fair Pay to Play Act was approved unanimously (73-0) by the California State Assembly on September 9, 2019. Its purpose is to allow college athletes to profit by selling the use of their NIL to outside commercial bidders. Currently, NCAA athletes become ineligible and are stripped of their scholarships if they profit off of their NIL, but that will be illegal in California starting in 2023. California lawmakers plan to delay the implementation for three years in hopes that either the NCAA will change its rules or other states will pass similar legislation.

Additionally, this law will allow student-athletes to hire an agent to seek out endorsement deals. This is also currently prohibited by NCAA rules, barring some exceptions regarding professional drafts.

The argument in support of this law is simple: If regular students are able to profit off of their unique abilities, why shouldn’t student-athletes be allowed to do the same? For example, a student receiving an academic scholarship for her mathematical abilities can also make money as a private tutor. However, a student on the swim team couldn’t host her own swim camp during the summer without losing her scholarship and NCAA eligibility. Democratic State Senator Nancy Skinner, who sponsored the bill, says it is a mechanism to correct both civil rights issues and unfair labor practices that the NCAA’s system has created. 

NCAA president Mark Emmert and California schools in the NCAA have voiced their opposition to the law in written letters sent directly to Newsom. Their view is that (1) education should come first for NCAA athletes, and (2) this bill would put compensation and athletics above the goal of education. 

However, the more obvious reason the NCAA opposes this bill is because it would create a competitive imbalance in college sports. Now that California schools will allow players to profit off of their NIL, the most talented athletes will almost certainly attend those schools. Emmert threatened to exclude California schools from participating in NCAA championship games after the bill passed in the State Assembly. Now that Governor Newsom has made it a law, the NCAA has two options.

The NCAA could continue to oppose the bill and take legal action against it. Emmert and the NCAA have already argued in letters to Newsom that this bill violates the U.S. Constitution’s Commerce Clause in that it allows a state to regulate a national association. According to the Commerce Clause, the U.S. Congress is the sole entity that has the right to regulate interstate commerce. 

However, the California legislature has expressly stated that they will not be bullied by Emmert and the NCAA and that it would be an illegal restraint of trade if Emmert bans all California schools from championship games. Since the NCAA is a national association with market power, it would arguably violate federal antitrust law by banning schools that choose to operate in California. The NCAA has lost many antitrust cases before so taking legal action will likely not be in its best interest.  

The second option advocated for by member schools in California would be for the NCAA to change its rules on a national scale. The NCAA has formed a working group tasked to evaluate the possible ways it could allow players to be compensated for the use of their NIL in all fifty states. The goal for the NCAA is to create fair rules for student-athletes to be compensated for their NIL across the board, rather than each individual state passing its own version of the Fair Pay to Play Act. Maintaining competitive balance would be almost impossible if there were different laws in each state. 

There are also regional aspects to consider. For example, it will be much easier for a star athlete to make money off of endorsement deals in Los Angeles than in Lincoln, Nebraska. This could persuade top recruits to attend schools located in cities where they are more likely to capitalize on their NIL, which would create a heightened competitive imbalance. The NCAA certainly has a lot to figure out in the next three years, but it appears that a foundation of the NCAA’s business model changed drastically on September 30, 2019. 

Tom Dozeman

 

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