California Changes the Game for College Athletes Through Fair Pay to Play Act

By: Hannah Knab

Collegiate athletics is a multibillion-dollar industry with fan bases spreading across the country.[1] Student-athletes gain a following amongst these fan bases through television broadcasting and social media, with some of the top student-athletes becoming recognizable household names.[2] Even with this fame, no student-athlete has ever received compensation for the use of their name, image, or likeness.[3]  

In 2019, however, California passed Senate Bill 206, also known as the Fair Pay to Play Act.[4] The bill allows student-athletes to obtain compensation for their name, image, or likeness without impacting their eligibility for scholarships.[5] It also enables student-athletes to get professional representation through agents or attorneys.[6] The bill marks a shift in a long-fought battle for student-athletes to receive compensation for their labor while “some 30 US universities’ athletic departments make over US$100 million a year.”[7] Now, other states are noticing the competitive advantage this will give California schools as top athletes will flock to California. States such as Colorado, New York, and Florida are now considering bills in favor of athlete compensation as a result of California’s legislation.[8]

The National Collegiate Athletic Association (“NCAA”) has consistently opposed income and endorsement payment for student-athletes outside of scholarships.[9] However, as states have been moving toward compensating athletes, the NCAA has adapted and released a framework on how to do so.[10] The NCAA included a provision allowing student-athletes to earn compensation for the use of their name, image, and likeness under specified  circumstances.[11] While the NCAA seems to be adapting to the new shift in compensating student-athletes, it remains opposed to the patch-work framework that could result from numerous states implementing different compensation legislation.[12] The NCAA now asks Congress to implement a federal solution “[e]nsuring federal preemption over state name, image and likeness laws, [e]stablishing a “safe harbor” for the Association to provide protection against lawsuits filed for name, image and likeness rules, [s]afeguarding the non-employment status of student-athletes, [m]aintaining the distinction between college athletes and professional athletes, and [u]pholding the NCAA’s values, including diversity, inclusion and gender equity.”[13]

The shift toward compensating student-athletes for their name, image, or likeness presents student-athletes new opportunities and offers new opportunities for attorneys, but will these new opportunities be more trouble than they are worth? With student-athletes being able to obtain professional representation, a whole new area of clientele has been opened for attorneys in the field. However, with COVID-19, a tumultuous election on the horizon, and unemployment numbers continuing to dismay, it is not likely Congress will pass federal legislation creating uniformity on how to handle compensating students anytime soon. States such as California have not even promised to abide by NCAA’s new guidelines once they go into effect.[14]

While some student-athletes now seem to be getting what they view is fair for their labor, the struggle between states wanting to uphold their own legislation and the NCAA wanting to impose uniform guidelines will likely create many new legal issues; such as the issue of whether student-athletes will be considered employees. California’s bill specifies that they will not be employees and will only receive third-party compensation.[15] Other states may entertain the idea, but this would open the door to questions such as will students then be able to unionize, and will scholarships then become taxable income? The amount of litigation that could ensue from these issues may be overwhelming for courts and attorneys but protect student-athletes from being used for profit by their universities.[16] With legislation involving student-athletes quickly evolving in many states, student-athletes and attorneys should be on the watch for these potential issues and possibly a federal solution in the coming months.


[1] See Jasmine Harris, In the Name of ‘Amateurism,’ College Athletes Make Money for Everyone Except Themselves, The Conversation (Apr. 5, 2019), https://theconversation.com/in-the-name-of-amateurism-college-athletes-make-money-for-everyone-except-themselves-114904#:~:text=Revenue%20generated%20from%20NCAA%20sports,of%20all%20college%20sports%20revenue (specifying college sports programs brought in $14 billion and the NCAA made $7.6 billion in revenue in 2018).

[2] See id. (classifying top student-athletes as “nationally recognizable and influential figures”).

[3] See id. (stating National Collegiate Athletic Association pushes to keep student-athletes considered as amateurs so student-athletes cannot profit off their fame).

[4] Cal. Educ. Code § 67456 (West 2019).

[5] Id. § 67456(a)(1).

[6] Id. § 67456(c)(1).

[7] Michael Long, Fair Pay to Play: Is the NCAA Learning an Expensive Lesson?, SportsPro (Oct. 18, 2019), https://www.sportspromedia.com/analysis/ncaa-fair-pay-to-play-act-california-college-sports-larry-scott-newsom.

[8] See id. (conveying Florida could propose a similar bill in 2020 and New York plans on passing legislation giving student-athletes fifteen percent of ticket sales income).

[9] See O’Bannon v. Nat’l Collegiate Athletic Ass’n, 802 F.3d 1049 (9th Cir. 2015) (finding NCAA capping compensation to the cost of attending college was reasonable); see Bloom v. Nat’l Collegiate Athletic Ass’n, 93 P.3d 621 (Colo. App. 2004) (holding NCAA did not have to waive its rules to allow the student to pursue television and film opportunities while he was a student-athlete).

[10] Paul Sarker, NCAA Explores Revised Rules Governing Student Athletes’ Names, Image, and Likeness Rights, GreenbergTraurig (Jun. 12, 2020), https://www.gtlaw.com/en/insights/2020/6/ncaa-explores-revised-rules-governing-student-athletes-name-image-and-likeness-rights.

[11] See id. (specifying “Endorsement agreements may not contain any school or NCAA logos or marks. Schools and conferences may not enter into endorsement deals with student-athletes. Schools and their boosters may not provide compensation or enter into NIL endorsement deals for purposes of influencing recruiting. Creating a review board to review the amount of compensation paid in individual deals to determine that such compensation is not deemed to be excessive. Regulating agents and other advisors, such as attorneys, who represent these student-athletes in NIL endorsement agreements.”).

[12] See id. (expressing how the NCAA seeks to cure “imbalance” that could result from states adopting different legislation through a federal solution).

[13] Stacy Osburn, Board of Governors Moves Toward Allowing Student-athlete Compensation for Endorsements and Promotions, NCAA (Apr. 29, 2020), http://www.ncaa.org/about/resources/media-center/news/board-governors-moves-toward-allowing-student-athlete-compensation-endorsements-and-promotions.

[14] See also Abigail Hess, NCAA Decision on Student-Athlete Pay is ‘A Step in the Right Direction,’ California Governor Newsom Says, CNBC, https://www.cnbc.com/2019/10/29/california-governor-ncaa-decision-is-a-step-in-the-right-direction.html (last updated Oct. 30, 2019, 9:46 AM) (stating California will watch to see if NCAA’s guidelines are in line with their legislation).

[15] Cal. Educ. Code § 67456(b)(1) (West 2019).

[16] See Tyrone Thomas et al., Insight: A Crescendo of Calls for Student-Athletes’ Right to Play and Get Paid, bloomberg law (Mar. 16, 2020), https://news.bloomberglaw.com/us-law-week/insight-a-crescendo-of-calls-for-student-athletes-right-to-play-and-get-paid (predicting legal problems in antitrust, compensation, and contracts).

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