Fair Pay to Play Act: California Legislation Threatens NCAA Amateurism Rules

Summary: California’s controversial “Fair Pay to Play Act” makes NCAA rules and regulations on amateurism illegal starting in 2023. The new law has reinvigorated the debate on how the NCAA limits athletes abilities to earn compensation for their name, image, or likeness.

From September 2017 to August 2018, the National Collegiate Athletic Association, known commonly as the NCAA, reported a revenue of over one billion dollars. Of the 460,000 college student-athletes who participated in NCAA sports in 2017-2018, zero received financial compensation for their athletic performances. Zion Williamson, formerly of Duke Men’s Basketball, and Tua Tagovailoa of Alabama Football are household names; their faces are plastered on posters, and their names flash across television screens around the country. Nevertheless, during their collegiate careers, these star athletes and others like them receive no money for participation in NCAA competition. As the billion-dollar sports industry continues to grow, critics have voiced their disapproval of the NCAA’s requirement of amatuer status. On Sept. 30 in California, this disapproval became state law. 

California Passes the Fair Pay to Play Act

Signed into law by Governor Gavin Newsom, California’s “Fair Pay to Play Act,” S.B. 206, states that “an athletic association, conference, or other group or organization with authority over intercollegiate athletics, including, but not limited to, the National Collegiate Athletic Association, shall not prevent a student of a postsecondary educational institution participating in intercollegiate athletics from earning compensation as a result of the use of the student’s name, image, or likeness.” The law also prohibits universities from implementing rules that prohibit student-athletes from earning compensation or denying scholarship from athletes who chose to market themselves.

S.B. 206 does not require universities to pay student-athletes themselves but allows for athletes to seek sponsorships and hire agents without jeopardizing their eligibility to play at California schools. The net cost to California universities under the new law would be zero, as all compensation is paid for by third-party endorsements. However, according to the current NCAA rules regarding amaetuer status, receiving any compensation for one’s likeness renders an athlete ineligible for intercollegiate competition. 

Previous Challenges to NCAA Amateurism

The problems addressed in S.B. 206 mimic other complaints against the NCAA’s amateurism rules, including those raised in O’Bannon v. NCAA. Ed O’Bannon, a former UCLA basketball star, sued the NCAA, claiming their restriction on athletes marketing their name, image, or likeness was an “unlawful restraint of trade,” a violation of the Sherman Antitrust Act of 1890, 15 U.S.C. § 1. The ruling affirmed that the NCAA’s rules and regulations are subject to antitrust laws, but that “the Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student athletes. It does not require more.” Both sides appealed the decision but the case was never heard by the Supreme Court. While O’Bannon did not win the compensation he felt he was owed, the case brought national attention to the flaws in NCAA rules. In establishing the precedent that NCAA rules must follow antitrust laws and bringing the issue to public debate, the O’Bannon case set the stage for other challenges such as S.B. 206 to the NCAA status quo. 

NCAA’s Response

The NCAA has been vocal in its criticism of S.B. 206 and warned California lawmakers of negative outcomes that will result from its passage. In a letter to Governor Newsom on Sept. 11, the NCAA Board of Directors urged the governor to veto the bill, as it threatens the NCAA’s core belief in establishing a fair playing field for all athletes. Because the law requires schools allow student-athletes to pursue sponsorships, this advantage in recruiting high school athletes would result in California schools being excluded from NCAA competition. The Board of Directors also claims in the letter that the law is unconstitutional, suggesting the NCAA is preparing a legal battle in the coming months before the law is operative in January, 2023. 

The NCAA has over three years before S.B. 206 goes into effect in California. In a statement in the hours following the bill’s passage, the organization admitted to needing change to better support its athletes but continued to voice its disapproval of S.B. 206 as a means to do so. In a warning to other states considering passing similar legislation, the NCAA stated “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.” It is unclear whether the NCAA will turn to internal reforms or look to challenge the law in court to address S.B. 206, but in any case, amateurism as defined by the NCAA is under threat.

Just the Beginning?

The Fair Pay to Play Act in California may not be the only legislation the NCAA will find themselves fighting in the coming years. Similar bills have been introduced in state legislatures around the country, including Florida and New York, that would allow student-athletes to earn money from their name, image, or likeness. On the federal level, Representative Mark Walker (R-NC-6) introduced the “Student-Athlete Equity Act,” H.R. 1804, which would prohibit organizations like the NCAA from “prohibiting or substantially restricting” an athletes ability to receive compensation for their identity. Only time will tell how S.B. 206 will affect the NCAA and intercollegiate athletics, but as other states and federal officials follow in California’s footsteps, the NCAA is looking at a real battle over amateur sports in the near future. 

Lucy Callard is a sophomore from Cincinnati, Ohio, studying Public Policy with a minor in Classical Studies. 


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