• Villanova Sports Law Blog

California Pay to Play Act Puts Pressure on NCAA to Amend Bylaws

By Lili Flores

California recently became the first state to grant college athletes the right to be compensated for the commercial use of their name, image, and likeness (“NIL”). Sitting alongside Lebron James, Governor Gavin Newsom signed State Bill 206, the Fair Pay to Play Act, into law in California on Sept. 30, 2019. The law allows athletes to be paid and to hire agents early in their college careers to assist them with new commercial opportunities. [1]

In signing the bill, Newsom argued the law simply gives student-athletes the same opportunities as all other students on California campuses. Moreover, Newsom is placing the interests of student-athletes at the forefront of college athletics, rather than the interests of the institutions coming first as they always have. [2] In contrast, the NCAA has focused its opposition to the law by claiming it will destroy amateurism in collegiate athletics while disregarding the potential benefit to the players.

A common misconception about laws like the Fair Pay to Play Act is that the schools would be paying their athletes in the form of salaries. Instead, the law simply allows athletes the opportunity to be paid by outside brands through sponsorships and other endorsement deals. The California law ultimately creates an unrestricted market for companies who want to utilize a college athlete’s NIL. [3]

When the Fair Pay to Play Act was first introduced in California, the NCAA called it a threat to college sports, even threatening to kick California schools out of NCAA competitions. After the bill became law, however, the NCAA appeared to reconsider their opposition. About a month after the signing of the Fair Pay to Play Act, the NCAA began clearing the way to allow athletes to profit from their NIL. The governing board voted unanimously to start the process of modifying the NCAA bylaws on Oct. 29. The board asked each division to amend its rules by Jan. 2021. However, the NCAA made it clear that potential new rules would not follow the California unrestricted market method and instead would allow the NCAA to take charge of regulating future endorsement deals. [4]

Since the law does not take effect until Jan. 2023, the impact of the Fair Pay to Play Act on college athletics in California remains to be seen. If the NCAA rules are amended, we may also start seeing effects beyond just California in 2021. However, questions remain as to whether the NCAA will follow through with their statements and actually amend their rules. Some critics are skeptical of the NCAA moving forward because their statement contained vague language of allowing athletes to benefit from their NIL “in a manner consistent with the collegiate model.” [5] This leaves a lot of flexibility for the NCAA to interpret this ambiguous language.

The NCAA did not specify the policy changes that could take place, so it is unclear what effect their changes will actually have in 2021 — if any. If the NCAA does not change their bylaws before the California Act goes into effect in Jan. 2023, there may be a whole new host of legal issues on the horizon and more lawsuits to come. The NCAA may also choose to set rules that are more restrictive than California’s, but we will have to wait and see what the NCAA chooses to allow.

There will be an interesting legal atmosphere surrounding the Act in upcoming years, as so many aspects of the NCAA’s response are still unclear. When the Fair Pay to Play Act was signed in California, the NCAA argued that the California Law was unconstitutional and infringed on the NCAA’s right to conduct interstate commerce. They also stated it would confuse student-athletes, coaches, and schools regarding what was allowed. On the other hand, those who support the Fair Pay to Play Act have argued that kicking California schools out of NCAA competitions would be a violation of federal antitrust laws. [6]

The NCAA will remain under pressure to follow through with their statement in the upcoming months and potentially in the upcoming years as legislation like the California Fair Pay to Play Act is introduced in more states and possibly even at the federal level. While the NCAA’s statement brings hope to college athletes to potentially be free to benefit from their NIL, it is still unclear how college athletics will actually change in the near future. It is obvious now, however, that there is momentum in the movement to allow student-athletes to benefit from their NIL and change is inevitable.

[1] McCann, Michael. “Breaking Down the Fallout of the Fair Pay to Play Act.” Sports Illustrated, 30 Sept. 2019, www.si.com/college/2019/09/30/fair-pay-to-play-act-law-ncaa-california-pac-12.

[2] “California Governor Signs Fair Pay to Play Act.” SI.com, 30 Sept. 2019, www.si.com/college-football/2019/09/30/california-governor-signs-fair-pay-play-act-lebron-james.

[3] Murphy, Dan. “What California Bill Means for NCAA Image and Likeness Debate.” ESPN, ESPN Internet Ventures, 1 Oct. 2019, www.espn.com/college-football/story/_/id/27585301/what-california-bill-means-ncaa-image-likeness-debate.

[4] Murphy, Dan. “NCAA Clears Way for Athletes to Profit from Names, Images and Likenesses.” ESPN, ESPN Internet Ventures, 29 Oct. 2019, www.espn.com/college-sports/story/_/id/27957981/ncaa-clears-way-athletes-profit-names-images-likenesses.

[5] “Board of Governors Starts Process to Enhance Name, Image and Likeness Opportunities.” NCAA.org - The Official Site of the NCAA, 30 Oct. 2019, www.ncaa.org/about/resources/media-center/news/board-governors-starts-process-enhance-name-image-and-likeness-opportunities.

[6] Murphy, Dan. “What California Bill Means for NCAA Image and Likeness Debate.” ESPN, ESPN Internet Ventures, 1 Oct. 2019, www.espn.com/college-football/story/_/id/27585301/what-california-bill-means-ncaa-image-likeness-debate.