California’s New Legislation is a Game-Changer for Student Athletes

California’s New Legislation is a Game-Changer for Student Athletes

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California’s New Legislation is a Game-Changer for Student Athletes

It is no secret that the NCAA is a very profitable business, and student athletes are clamoring for their fairshare. To that end, the Fair Pay to Play Act was introduced earlier this year and picked up steam after California Governor Gavin Newsom signed the bill into law.  The Act would allow Californian student athletes to receive compensation for their name and likeness as soon as 2023. California’s recent legislation is paving the way, with other states like Iowa and Georgia following suit.  After much opposition to California’s bill, in a surprising turn of events, the NCAA Board of Governors recently voted unanimously to allow student athletes to be compensated for their name, image and likeness.  However, the NCAA has yet to decide on rules governing student athletes’ ability to receive compensation for their names and likenesses while maintaining their eligibility. 

Most recently, Florida’s governor signed a bill similar to the Fair Pay to Play Act, but would allow college athletes to receive compensation for their name and likeness as soon as July 2021.  About two dozen other states are considering similar legislation to apply pressure on the NCAA to quickly allow student athletes compensation for their respective names and likenesses. 

A brief history of amateurism in college sports

Amateurism is not a home grown American ideal.   In reality, British elites imagined amateurism when the peasants rowing on the River Thames started to regularly best the elites in competitive races.  The British aristocrats fabricated a Greek history of amateurism and tied it to the notion of being a gentleman, claiming sports should be hobbies and not for making a living.  The NCAA picked up this concept in the early days of summer baseball leagues.  Summer vacation resorts used to pay college baseball players to play at their resorts as entertainment for the guests.  The universities noticed and attempted to claim the students’ participation in summer baseball leagues at vacation resorts rendered them ineligible.

However, when the universities formed the NCAA, the NCAA strictly interpreted an amateurism requirement in college sports.  In theory, the NCAA originally denied collegiate athletes’ ability to receive compensation in any form, including scholarships. But, until the enactment of the Sanity Code in 1948, the NCAA did not have the actual power to enforce the amateurism requirement.  On the flip side, the Sanity Code allowed for college athletes to receive funds for college tuition and fees. Currently, there is constant temptation for college athletes to accept improper benefits from alumni boosters and sports agents.  Accepting said benefits can lead to wide-ranging penalties against a student athlete, including suspension from college sports, forced charitable donations, and adverse impacts to the athlete’s future professional status.  Violations of the amateurism requirement are often blurred, ranging from attending parties and failing to disclose relationships with professional athletes, to selling autographs and accepting cash from agents and boosters.

The push for student athletes to be receive compensation beyond university tuition and fees

Though the benefits of a student athlete scholarship are considerable, so is the amount of money the NCAA earns off the talents of student athletes.  College sports is multibillion-dollar enterprise, with the NCAA itself clearing an annual revenue of over a billion dollars. Further, in order to cash in at the professional level, most star athletes, particularly football and basketball players, must play college sports.  Injuries are a major concern for student athletes, particularly in college football, which is a violent sport where players must spend three years on campus before entering the NFL draft.  As such, both student and professional athletes’ goal is earning an income for their talents as soon as possible.  The introduction of bills allowing student athletes to earn money off their name and likenesses, creates a more immediate source of income for student athletes. 

The new law may also encourage The NCAA supports student-athletes in receiving fair compensation for the use of the name, image, and likeness

Proponents of the Act and the NCAA’s decision believe that student athletes have an equal right to earn compensation for their services and to be paid for the use of their name, image, and likeness – just as professional athletes and any other workers do.  Others, like former University of Florida star Quarterback, Tim Tebow, have been vehemently against compensation of college athletes, calling it a “slippery slope.” Tebow, who notes that his jersey was one of the highest selling athletic jerseys in the world while he was in college, was perfectly fine with not making any money from it, as that’s not what college was all about for him.  On the opposing side, people have argued that it’s a lot easier getting by in college when you come from a privileged upbringing, like Tebow.  Even though the NCAA unanimously agreed to allow student athletes to be compensated, the California bill may still be unconstitutional. The NCAA originally alleged that the bill would lead to unfair recruiting advantages, that would result in a prohibition from NCAA competitions. California senators disagree, claiming that an NCAA ban is a clear violation of federally imposed anti-trust law.

The ruling could place hundreds of thousands of dollars into the pockets of student-athletes

The NCAA’s ruling to has the potential to be a major win for star athletes.  In 2016, the average value of a Duke Basketball player was $1.3 million and in 2017, the average University of Texas football player was worth $666,029 per year. In 2013, Texas A&M star football player Johnny Manziel brought the school an estimated $37 million in media exposure. However, the NCAA would not have allowed any of these players to receive any compensation for licensing their own image (whether in connection with their collegiate career or not). In practice and in purpose, the NCAA’s rules were created to maximize profits for the NCAA and its member schools rather than to protect student athletes.

The new law may also encourage more young athletes to pursue college degrees

The new NCAA rules could have the added effect of enticing athletes to go to college and once there, stay longer.  This could help to curb the recent phenomenon of young basketball players choosing to play overseas, rather than going to college.  Take RJ Hampton for example, a current player for the New Zealand Breakers of Australia’s National Basketball league, who turned down offers from prominent college programs like Kansas and Memphis.  For Hampton, his dream was never to be a college basketball player, but to play in the NBA – so why not play professionally in Australia for a year at almost $70,000 in salary and be able to sign endorsement deals before declaring for the NBA draft?

Either way, the debate over compensation goes back to the paramount case, O’Bannon v. NCAA. At the time, current and former student athletes challenged the NCAA’s bylaws that restricted players from licensing out their own name, image and likeness. The lawsuit was brought by Edward O’Bannon Jr., claiming that the “amateurism” rules were a restraint of trade under the Sherman Act. The court held that although the plaintiffs failed to sufficiently identify harm under a rule of reason analysis, agreements among colleges not to offer football or basketball recruits more than full value of grant-in-aid for athletic services, constituted a restraint of trade. Moreover, it was found that the NCAA’s “amateurism” argument was not enough to justify a “sweeping prohibition” on compensating players for use of their name, image and likeness.

The fallout from the O’Bannon decision led to similar actions in In re NCAA Student-Athlete Name & Likeness Licensing Litg. And Hart v. Electronic Arts.  In these subsequent actions, the student athletes argued that the Electronic Arts’ videogame NCAA Football misappropriated their names and likenesses.  Specifically, in Hart, the court held that the video game set out to create realistic representations of the individual players.  In fact, the Hart court concluded that the reason that NCAA Football was valuable was that it intended to create realistic versions of the players, which appealed to EA’s target market, thereby leading to higher sales.  

Unfortunately for the student athletes, due to the NCAA guidelines, these litigations never led to the player’s receiving money from the NCAA or their respective universities for improperly allowing the misappropriation of their names and likenesses.  Now the players are on the cusp of not only being compensated for their names and likenesses, but doing so without the involvement of the NCAA or their respective universities.

Regardless, this is more than ‘just a sports issue’

The world of college sports seems to be weighing in favor of allowing student athletes to be properly compensated. In the words of California Senator Steven Bradford, “this is more than a sports issue.” For decades, young athletes have generated billions of dollars for their colleges, universities and corporate sponsors without getting their fair share. Student athletes do not endure normal college lives and the time to change a fault in the history of sports has arrived.

Photo by Max Winkler on Unsplash

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