Paid College Athletes & The Developing Law

California recently enacted legislation aimed at allowing collegiate athletes to make money off their images and likeness.  This legislation has the potential to upend the infrastructure of college sports, governed primarily by the National Collegiate Athletics Administration (“NCAA”), and the way amateur athletes both choose colleges or pursue professional careers.

By way of brief background, the NCAA, a non-profit organization, takes in revenue in the billions of dollars with some individual universities making tens or hundreds of millions of dollars in sports-related revenue.  Meanwhile, student athletes are prohibited from using their name, image, or likeness to earn compensation for themselves and are largely prohibited from earning income from their athletics while in school, other than scholarships and various stipends.

This disparity has been a point of criticism for the NCAA for years, with critics noting that schools and businesses in the industry make millions off these student athletes, while the students themselves make nothing and may never earn if they do not go on to compete professionally because of injury or otherwise.  New legislation in California, home to some of the largest collegiate sports programs such as the University of Southern California, the University of California Los Angeles, and University of California Berkley, aims to allow students to profit, or at least earn some income, through their role as collegiate athletes.

The California bill on point, signed into law on September 30, 2019 by Governor Gavin Newsom, is landmark legislation in that will allow student athletes who compete for California schools to use their name, image, and likeness for personal gain and allow them to hire agents to help them navigate professional engagements.  The NCAA, along with other major conferences like the PAC-12, oppose this law on the grounds that it would affect the “amateur” status of student-athletes and would give California schools a competitive advantage over states that do not have similar legislation, as the state would presumably attract higher caliber student-athletes based on this financial incentive.  The law will not take effect until 2023 and presumably this is to allow students to adjust and to allow the NCAA to carve out its own rules.

The NCAA’s main weapon in keeping other states from adopting similar legislation is prohibiting schools that compensate their players from competing in NCAA competition.  California arguably took this step because it felt it had a strong position relative to the NCAA given that it is “one of the biggest media markets on planet Earth” according to Governor Newsom.  The popularity and strength of California athletic programs, which are often regularly in collegiate playoffs or championship games makes it unlikely that the NCAA would take the drastic measure of barring these schools from competition.

In New York, State Senator Kevin S. Parker of Brooklyn introduced a bill, S6722A, which is currently in committee.  This bill is similar to the California law, but also offers additional forms of compensation for college athletes.  Like California’s law, this bill allows student athletes to earn compensation pursuant to his or her name, image, or likeness without affecting their eligibility.  It also allows the student to retain an agent or legal representation for these purposes.  That said, New York, unlike California, has much less bargaining power with the NCAA considering there are fewer colleges that boast large athletics programs within the state.

The NCAA is likely to challenge all such legislation in this vein, and whether these laws take effect or whether the NCAA backs down from its own strict stance of not allowing student-athletes to receive compensation is still undetermined.  However, with this new law and potentially others like it, the NCAA may have to adapt faster than it would like.  At a minimum, over the long term this has great impact for student/athletes and we are keeping an eye on it as advocates in the intersection of the education and labor spaces.  #TheBoydLawGroup