Caught Between a Rock and a Hard Place – California’s “Fair Pay to Play” Act

The amateurism rules of the National Collegiate Athletic Association (“NCAA”) – the governing body of intercollegiate athletics – prohibit student-athletes from receiving payments for endorsements or otherwise profiting from the use of their name, image or likeness (“NIL”).  Indeed, if an NCAA Division I or II athlete is paid for appearing in a commercial, or engaging in other endorsement, because of his/her athletic ability, he/she would lose his/her eligibility to participate in NCAA competitions.  According to the NCAA, allowing student-athletes to be paid in this fashion would leave them susceptible to commercial exploitation, and undermine the balance between academics and athletics within the university community.

 A proposal introduced in the California State Senate earlier this month – CA Senate Bill 206, dubbed the “Fair Pay to Play” Act (“Act”) – seeks to challenge certain of the longstanding amateurism tenets underlying the collegiate sports landscape.  The Act would, in effect, enable student-athletes from California’s public postsecondary educational institutions to earn monetary compensation in connection with the use of their NILs.  Further, California colleges and universities would, under the bill, be prevented from taking away scholarships and other such aid from student-athletes who avail themselves of such opportunities.

The passage of the Act would thus leave California’s 24 public colleges and universities caught between a rock and a hard place.  They would presumably need to comply with state law, and its mandate now to give student-athletes the freedom to cash-in from their NILs, while simultaneously abiding by the amateurism rules of the NCAA, a private entity not bound by state laws like the Act – quite a daunting, if not impossible, proposition.  Not only are student-athletes who currently engage in such behavior likely to be declared ineligible to play, but university athletics departments who encourage or even tacitly permit such activity will be deemed to lack institutional control and to otherwise be in violation of NCAA rules – in the extreme, it could result in the banning of all California public schools from NCAA membership. 

The proposed Act comes on the heels of the introduction of a similar bill in the Washington State House of Representatives a few weeks ago that would allow collegiate athletes in that state to sign endorsements and get paid for them.  The Act is therefore not the first piece of legislation of its kind to be proposed, and, with growing public sympathy for student-athlete compensation, likely will not be the last.  As such, it is an issue that bears watching by all NCAA member institutions, and their athletics programs, in the months to come.  Colleges and Universities – particularly those that would be directly affected by the proposed measures in California, Washington and elsewhere – would be well advised to begin considering and developing strategies, including legal and lobbying ones, to ensure institutional compliance going forward.  Institutions interested in advice and assistance in this effort should contact HMBR’s Collegiate Sports Practice Group and its Partner, Jay Rosselló.