California Law

New California Law Would Allow N.C.A.A. Athletes to Make Money

As a general rule, college athletes are not paid more than the cost of their tuition, regardless of how much money they may make for their university. Many have decried this longstanding national policy as unfair, and recently California’s Gov. Gavin Newsom signed a bill into law that would allow college players to hire agents and strike endorsement deals, upending a policy considered standard in every other state. The law was passed despite the extensive lobbying of universities and powerful organizations who opposed the measure. Though the law is not set to go into effect until 2023, it is already causing confusion and pushback among college sports teams and leagues.

According to Newsom, while the law only applies to California, it represents “a big move to expose the farce and to challenge a system that is outsized in its capacity to push back.” Newsom considers it fundamentally unfair that the only students who are not able to monetize their image, likeness, and skills are athletes, even though these students generate perhaps the most revenue of any student group. It has long been the philosophy that student athletes attend university to earn a degree, not to make money, but as the industry of college sports has exploded this view is starting to change, much to the chagrin of colleges and student-athlete organizations. The N.C.A.A. has called the measure “unconstitutional” and is developing a legal defense against the law.

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When the law goes into effect in a few years, it will directly contradict current N.C.A.A. guidelines, which govern the participation of student-athletes in sports. Currently, the guidelines strictly prevent student-athletes from making money in a variety of ways, ranging not only from banning sponsorships but to preventing athletes from selling autographs and monetizing social media accounts. This means that after the law goes into effect, student-athletes who hire agents and win endorsements will violate N.C.A.A. guidelines despite being legally allowed to do so, potentially incurring fines from the N.C.A.A. It’s not currently clear whether the N.C.A.A. could legally enforce such fines.

As California is among the most populated states in the country, it would be difficult for the N.C.A.A. to afford to penalize the state’s universities and athletes, who make up a significant portion of the American college sports industry. And although the law only applies to California, it is sure to have reverberations throughout college sports in general, as leaders will be forced to decide whether to change their rules barring athletes from making money in order to accommodate Californian student-athletes, or simply ban these athletes from competitions.

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As the 2023 deadline approaches, other states are looking into the possibility of ensuring that student-athletes can receive compensation as well. Because California is such a large and influential state, they are likely to lead the way on this and similar legislation, and there’s a good chance other states follow suit. The enacting of similar legislation, or the lack thereof, is likely to be a determining factor in the question of how the N.C.A.A. changes its rules.

With this law, California is intending to force the N.C.A.A.’s hand, as Newsom claimed they were “not going to do the right thing on their own.” Both Republicans and Democrats were in favor of the bill, but as 2023 is still four years away, there is time for the law to be modified depending on how developments in the industry proceed. The law had the support of LeBron James, who hosted a television show on which Newsom signed the bill. Because only a small percentage of college athletes become professional athletes, the law is thought to give more students an opportunity to make money off of their athletic abilities which they hone during the course of their education.