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California, NCAA Spar Over Student-Athlete Compensation Bill

Two football players facing off.
By Christopher Coble, Esq. on July 01, 2019 3:00 PM

"If this were a game of chicken," writes sports law professor Thomas Baker, "California would be behind the wheel of a tank matched against the NCAA's Vespa." Baker is referring to California's proposed Fair Pay for Play Act, which would allow college athletes to be compensated for the use of their name and likeness, and the NCAA's veiled threat that, if passed, California schools may be barred from postseason play.

The two sides seem to be on a collision course, and most legal experts don't see the NCAA coming out on top.

Compensation, Pay, and Benefits

Student-athlete compensation has been a tricky legal issue for NCAA since, well, the NCAA invented the phrase student-athlete in 1964. The designation was intended to shield the organization from paying workers' compensation to injured players, and has been used to thwart everything from video games to unionization. As it stands, collegiate student-athletes (and their families) are barred from receiving any impermissible benefits, and that list of benefits includes any goods or service based on their status as athletes.

California's Fair Pay to Play Act would require California colleges that receive at least $10 million in media rights revenue a year to allow student-athletes to be compensated for the use of their names, images and likenesses. Per Sports Illustrated, "athletes at California schools would be authorized by law to join advertising campaigns, sign endorsement deals, negotiate for inclusion in video games and sign countless other types of licensing contracts," and would be able to hire agents to represent them in compensation arrangements.

Competition, Play, and Business

The NCAA is obviously not a fan of the proposed law, and president Mark Emmert wrote a sternly-worded letter to State Assembly committees considering the law:

"We recognize all of the efforts that have been undertaken to develop this bill in the context of complex issues related to the current collegiate model that have been the subject of litigation and much national debate ... Nonetheless, when contrasted with current NCAA rules, as drafted the bill threatens to alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships. As a result, it likely would have a negative impact on the exact student-athletes it intends to assist."

Many, like Sports Illustrated legal analyst Michael McCann, have interpreted Emmert's letter as a threat to ban California schools from NCAA-sanctioned championships if the law passes. "If the NCAA carried through on Emmert’s threat to revoke the eligibility of California schools to participate in championships, the NCAA would essentially punish California schools and their students for the act becoming law," McCann notes. "The NCAA also wants California lawmakers to consider that hotels, restaurants and similar businesses that profit from the state hosting NCAA tournament games would suffer. Essentially, Emmert is warning state lawmakers that the NCAA will take its business elsewhere."

Calling a Party's Bluff

And Baker doesn't see that ending well for the NCAA. "Any threat from Emmert to exclude California schools from NCAA competitions is empty and will likely never come to fruition, he writes. "First and foremost, the NCAA is a member-managed association, and there are approximately 25 Division I schools in California ... all of the California programs in supposed jeopardy have games scheduled against countless other programs located across the country ... [and] there probably exists within the NCAA a relatively strong voting bloc of schools that would not like to see the California members excluded from NCAA competition."

California represents the world's fifth largest economy and is home to some of the country's largest media markets, Baker points out. "Don't flinch, California. There is too much at stake for too many college students."

Even if enacted, the new law would not go into effect until 2023. So, both sides have time to rev their proverbial engines before this game of legal chicken is over.

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