LOUISVILLE, Ky. (WDRB) -- California Gov. Gavin Newsom signed into law Monday a bill that will require the state’s NCAA institutions to allow players to make money from their image and/or likeness, and to allow them to hire agents.
Almost everyone involved in college sports today agrees that the NCAA needs to fashion a new way of dealing with revenue-generating athletes so that they can receive a portion of the money they’re helping to make. Even the NCAA, in its reaction to Newsom’s action, acknowledged that it “agrees changes are needed to continue to support student-athletes.”
But will the law in California be a catalyst for that change, or will it wind up just generating confusion in the long run?
While those who champion the notion of paying players celebrated the signature as something that will break the NCAA’s hold on college sports revenues, a look at the fine print isn’t quite as definitive.
Three things to consider:
1. THE LAW CHALLENGES, BUT DOESN’T CHANGE NCAA RULES: The easiest parallel is been with the effort to legalize marijuana. There are now 11 states whose laws allow for the recreational use of pot, but the drug remains a banned substance by the NCAA, and if a player tests positive for it, he faces sanctions.
As a private association, the NCAA’s membership has a legally protected right to make and enforce any restrictions it desires, as long as those rules are lawful.
But the California law anticipates that conflict and expressly makes it illegal within the state for the NCAA to “prevent a postsecondary educational institution (or a student) from participating in intercollegiate athletics as a result of the compensation of a student athlete for the use of the student’s name, image, or likeness.”
This essentially provokes a legal challenge. The NCAA either must fight this law legally (which it has hinted it might do under the Commerce clause of the constitution), or enact reform to make that legal battle unnecessary.
What California might not be counting on would be the NCAA’s simple decision to declare those schools in California ineligible for competition if they use players who have received compensation outside of NCAA rules. Such a move would throw the legal challenge, perhaps, back onto California. The NCAA could reasonably argue that it isn’t preventing students or colleges from competing in intercollegiate athletics but merely preventing them from competing in this particular college athletics organization.
2. ATHLETES CAN’T SIGN DEALS THAT COMPETE WITH EXISTING UNIVERSITY CONTRACTS: In other words, if an athlete wants to sign an endorsement deal with Under Armour, he better not be playing for a Nike school. This single fact alone limits greatly the possibilities, because usually even the smallest of athletic programs has an apparel deal with somebody.
And not just apparel deals. Depending on the school, the list of prohibited sponsors could be very long, with most departments having deals with dozens of companies already in place. A simple search of UCLA’s website shows deals with Jack in the Box, Wescom, Jersey Mike’s, Muscle Milk, SoCal BMW Centers, Honda, Ralph’s, UCLA Health, Delta Air Lines, Nestle and Under Armour.
In other words, a southern California car dealer might want to make an endorsement deal with a UCLA, player, let’s say. But if that deal is with a competitor to a car dealer that already has a contract in place with the university, the player can’t do the deal. And those companies that already have deals with the university might be slow to work separate deals with players, for fear of losing business with the school.
Given the wide range of companies that most athletic departments do business with, a player in California will have to do a good bit of research before signing to know which companies he could endorse and which he couldn’t.
3. THE LAW DOESN’T TAKE EFFECT UNTIL 2023: California wrote the law with the idea of prompting action on the NCAA’s part. That’s why there are several years of lead-time before it is enacted.
The NCAA has put together a working group to examine the very issue of players receiving compensation for their image and likeness, and if it were to come up with a solution to the liking of legislators in California and elsewhere, the legislation could be repealed.
California, in essence, is hoping to throw its weight around, as Newsom told The New York Times: “(California) is one of the biggest media markets on planet Earth. Media cannot afford not to have California at scale being participatory in the tournaments. They know that, we know that, it’s a threat. I don’t necessarily take it to heart.”
In other words, while today’s law is historic in what it proposes to make the NCAA do, it hasn’t achieved that goal yet, and there are several years of maneuvering (and perhaps courtroom battles) still to come.
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