A California Bill Would Put College Athletes on a Collision Course With the NCAA — and Their Universities

A vote on Tuesday by a committee of California’s Assembly pushed forward a bill that would allow some of the state’s college athletes to profit from their own name, image, and likeness — placing the athletes’ financial interests on a collision course with those of their colleges and the NCAA.

The bill, which has already passed the state Senate, would apply to public and private institutions averaging $10 million or more in annual revenue from athletics-related media rights. According to Senate Bill 206, starting in 2023, athletes could not be barred from hiring an agent or profiting from their own likeness. If enacted, the bill could fundamentally alter the landscape of amateurism and create disparate rules between California and the rest of the country.

The National Collegiate Athletic Association has already made its displeasure known. Last week Mark Emmert, the organization’s president, sent a letter to Kansen Chu, the Assembly member who heads the Committee on Arts, Entertainment, Sports, Tourism, and Internet Media. Emmert implied that if the bill, known as the Fair Pay to Play Act, were to become law, California colleges could be banned from NCAA championships.

The bill “likely would have a negative impact on the exact student-athletes it intends to assist,” wrote Emmert. The organization last month formed a working group to “examine the NCAA’s position on name, image, and likeness benefits and potentially propose rule modifications tethered to education.” Emmert’s letter also made clear that if athletes are to be compensated in any way, the NCAA wants to lead that discussion on its own terms.

Proponents of the bill say students would be the beneficiaries. Female athletes, especially, would benefit, said the bill’s author, Nancy Skinner, a Democratic senator from Berkeley. Women have few professional athletic opportunities after college, she said. Prohibiting them from profiting from their talent, at the apex of their athletic careers, takes away a possible monetary pipeline.

In Tuesday’s committee meeting, California’s legislators voted 5 to 0, with one abstaining vote, to push the bill forward. It still faces a vote by the Committee on Higher Education by July 11 before potentially going on to the governor. A representative of Gov. Gavin Newsom said that the bill would be evaluated on its own merits.

Colleges Object

The NCAA isn’t alone in its opposition to the bill.

California universities have been public with their disagreements, which center on the financial and practical implications of defying the billion-dollar organization. In a letter to the chair of the Senate Education Committee, the University of California system objected to the bill because it would create “a circumstance in which student-athletes at UC could be in violation” of NCAA bylaws, which could lead to the loss of eligibility and educational benefits. Michael Uhlenkamp, a spokesman for the California State University system, expressed similar sentiments.

The letter also mentioned the possibility that athlete-sponsorship deals could jeopardize current university agreements, leading to “budget cuts and the likely elimination of non-revenue sports.” The University of California at Los Angeles has a 15-year, $280-million contract with Under Armour, the largest in NCAA history, and the University of California at Berkeley signed a 10-year, $86-million agreement with the sports-apparel maker in 2016.

The contract between UCLA and Under Armour forbids the university to allow athletes, coaches, or staff members to use products supplied by another company in any athletics or team-related event, “including but not limited to practices, games, related travel, etc.”

In a letter this month Stanford University’s athletics director, Bernard Muir, wrote that “for any reform to be fair and meaningful to all student-athletes, it needs to occur at the national level and be adopted by the NCAA.”

Power Dynamics

To Marc Edelman, a professor of law at Bernard M. Baruch College, part of the City University of New York, the unified front points to a troubling reality of college athletics and the power dynamic between member institutions and the organization.

“The NCAA is not a private, separate association,” said Edelman, an expert in sports law. “The NCAA is a bottom-up trade association made up of member colleges. … Every one of these schools operate within a prisoner’s dilemma.”

Tuesday’s arguments against the bill, coming from representatives of California State University at Long Beach, followed a similar logic. Athletes’ opportunities could diminish because the NCAA could retaliate, the representatives said. In other words, said Edelman, a trade organization is threatening to punish its member organizations for following state law — akin to the National Retail Federation’s banning California businesses because the state’s minimum wage is higher than other states’.

“That conversation would never exist,” he said. “And now some people are arguing that it would be OK for the college-sports trade association to ban member schools that are complying with the California law.”

But the NCAA is no average trade association. Its annual revenue exceeds $1 billion, and it signs multibillion-dollar broadcasting contracts for postseason tournaments. Emmert made about $2.9 million in 2017, $3.9 million including deferred payments. That an organization with such power would forbid athlete compensation has drawn the ire of advocates — and the public — who say reform is long overdue.

Maureen Weston, a professor of law at Pepperdine University, noted that the bill raises questions of national uniformity and the dormant commerce clause — whether a state can permit what a private association forbids. A Los Angeles Superior Court judge already ruled on such an issue when he found the NCAA’s “show cause” penalty to be violating state law. In a paper on the case, Weston wrote that the ruling — which voided the organization’s “show-cause” provision — could “chip away at the NCAA’s enforcement power.”

She could see Senate Bill 206 raising a similar issue. Edelman, too, said he could see a scenario in which California enacts the bil, and the NCAA doles out punishments — setting up another legal battle on an issue that has been at the forefront of college-athletics discussions over the past decade.

The most-notable example of the battle is O’Bannon v. NCAA, a class-action lawsuit in which the U.S. Court of Appeals for the Ninth Circuit found certain NCAA amateurism rules to violate antitrust law. But the three-judge panel also did not go so far as to endorse additional compensation for athletes, such as stipends to allow the use of name, image, and likeness. The ruling continued a trend of court decisions going against the NCAA but failing to provide clear victories for athletes and their advocates.

By prohibiting athletes from making money that could, in any way, relate to their athletic accomplishments, NCAA bylaws seek to maintain amateurism. But, as a U.S. District Court judge, Claudia Wilken, wrote in an opinion in March, “defendants nowhere define the nature of the amateurism they claim consumers insist upon.”

California lawmakers want to ensure NCAA athletes can profit the same as nonathletes, without facing punishment. A Texas A&M cross-country runner promoting his water-bottle company, two University of Iowa swimmers starting a T-shirt website, a University of Minnesota wrestler using his name and image in his own music videos — all were considered NCAA violations.

In a recent high-profile case, a University of Central Florida football player refused to stop profiting from his YouTube videos, which attracted hundreds of thousands of views, despite pressure from the NCAA. “I’m not demonetizing,” he said in a June 2017 video, “I refuse to.”

The next month, the NCAA ruled him ineligible.

As Wilken noted, players aren’t banned outright from accepting gifts or preferential treatment; they’re just doled out on the NCAA’s terms. Each year hundreds of athletes competing in college-football bowl games get free gift cards, headphones, Yeti coolers, PlayStations, iPads, cowboy hats, luxury watches, and backpacks from sponsor companies.

Last year, for example, sponsors of the Quick Lane Bowl provided football players from the University of Minnesota and the Georgia Institute of Technology with Fathead posters with their likenesses.

Selling that poster? NCAA violation.

Will Jarvis is an editorial intern at The Chronicle. Follow him on Twitter @willyfrederick, or email him at will.jarvis@chronicle.com.