A new bill signed by the governor of California promises to significantly alter the way college athletes are compensated, and how colleges and universities derive income from the athletes and the schools' athletic programs.
Gov. Gavin Newsom signed Senate Bill 206, also known as the "Fair Pay to Play Act," into law Monday but the new legislation won't take effect until Jan. 1, 2023. Student athletes in California will be granted the right to use their "name, image, or likeness" to earn compensation by establishing independent contracts with commercial entities.
College sports in the United States is a large for-profit industry, with top schools raking in hundreds of millions of dollars in annual revenue. For example, between 2017 and 2018, the University of California-Los Angeles (UCLA) took in more than $130 million from sports revenue, according to an NCAA financial report published by USA Today. The NCAA, the governing body of college sports programs, has rules requiring college athletes to remain amateurs — defined as not earning money for their participation in sports events.
Academic institutions are not the only entities that profit from such revenues. University sports coaches are among the highest paid employees at their institutions, with some earning more than college presidents and chancellors.
A study by AthleticDirectorU.com shows that between 2016 and 2017, men's basketball head coaches at Big 10 schools earned on average $2.5 million dollars for their work, while their female counterparts took in an average of $663,572 annually. Big 10 schools are a grouping of public universities based in the Midwest that are well-known for their popular athletics teams.
Critics have long argued that banning college athletes from earning money to play on their teams has been unfair, since schools and organizations like the NCAA have, over the years, regularly used the "likeness" of college athletes to generate profit for themselves through licensing and merchandise deals.
Among the most vocal supporters of the new law are professional athletes such as Lebron James, who went to the Cleveland Cavaliers right out of high school and now plays with the Los Angeles Lakers. Like others, James argues that student athletes have long been unfairly compensated for their role in generating revenue for their schools.
Everyone is California- call your politicians and tell them to support SB 206! This law is a GAME CHANGER. College athletes can responsibly get paid for what they do and the billions they create.— LeBron James (@KingJames) September 5, 2019
James celebrated the passing of the new law by announcing on Twitter, "I'm so incredibly proud to share this moment with all of you. @gavinnewsom came to The Shop to do something that will change the lives for countless athletes who deserve it! @uninterrupted hosted the formal signing for SB 206 allowing college athletes to responsibly get paid."
I’m so incredibly proud to share this moment with all of you. @gavinnewsom came to The Shop to do something that will change the lives for countless athletes who deserve it! @uninterrupted hosted the formal signing for SB 206 allowing college athletes to responsibly get paid. pic.twitter.com/NZQGg6PY9d— LeBron James (@KingJames) September 30, 2019
Legal challenges to the California law are expected. Detractors say they are concerned about how the law may end up distracting student athletes.
As a membership organization, the NCAA agrees changes are needed to continue to support student athletes, but its leaders argue that improvement needs to happen on a national level through the NCAA's rules-making process.
California's new law already is creating confusion for current and future student athletes, coaches, administrators and campuses — and not just in California.
Brian Jacobs, a former college athlete whose Twitter profile describes him as a "Husband, Dad, Coach," says he's concerned that young athletes may end up forgetting their primary purpose for attending college.
In a recent tweet, he said, "If this sticks it will suck in more kids to lose focus on their education."
What happens when 20 out of the 100 athletes get some chump change endorsement deal that they think is real money b/c they came from disadvantaged families? Will this incentivize them to study harder for the true prize which is their free education.— Brian Jacobs (@brianjacobs72) September 30, 2019
Another Twitter user criticized the new law by arguing that students who play sports should be doing it for fun and not financial gain.
"People playing a sport for fun and not getting paid…that's a problem?" he asked.
Still others say that student athletes already enjoy a wide range of privileges, including access to a free education, medical care, athletic trainers, dedicated sports training facilities and a place to court the attention of professional league scouts.
Most but not all student athletes receive some type of scholarship. A report published by the NCAA in March 2018 revealed that 59 percent of all student-athletes at Division 1 schools receive some type of aid, and that only 2 percent of high school athletes receive "some form of athletics scholarship to compete in college." Division 1 schools have the largest athletic programs governed by the NCAA.
It remains unclear if California's passage of the "Fair Pay to Play Act" will result in the enactment of similar legislation in other states. The New York state legislature has a bill titled the "New York Collegiate Participation Compensation Act" under review.