California Gov. Gavin Newsom signed SB 206, also known as the Fair Pay to Play Act, into law Monday. The law allows college athletes to profit from their name, image and likeness.
The bill will go into effect in 2023, and if the bill survives the expected court challenges, it could reshape the NCAA’s business model.
The formal signing of the bill was done on LeBron James’ HBO show called “The Shop.”
“I’m so incredibly proud to share this moment with all of you,” James wrote on Twitter. “@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.”
The Fair Pay to Play Act allows college athletes in California to sign endorsement deals, earn compensation based on the usage of their name, image and likeness and sign all types of licensing contracts that would allow them to earn money.
California college athletes would also be able to hire an agent licensed by the state to represent them in any deals.
“Currently, student athletes are prohibited from being compensated even though their respective college or university makes millions from their athletic performance. That participation often comes at great risk to their health, academic success, and professional prospects,” the Governor’s office said in a statement.
“SB 206 makes California the first state in the nation to allow college athletes to receive compensation from the use of their name, image and likeness.”
The NCAA released the following statement in response to SB 206:
As a membership organization, the NCAA agrees changes are needed to continue to support student-athletes, but improvement needs to happen on a national level through the NCAA’s rules-making process. Unfortunately, this new law already is creating confusion for current and future student-athletes, coaches, administrators and campuses, and not just in California.
We will consider next steps in California while our members move forward with ongoing efforts to make adjustments to NCAA name, image and likeness rules that are both realistic in modern society and tied to higher education.
As more states consider their own specific legislation related to this topic, it is clear that a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field for 1,100 campuses and nearly half a million student-athletes nationwide.
For decades, the NCAA has been ruling on how student athletes utilize their celebrity. Pepperdine sports law professor Alicia Jessop says a few years ago, the NCAA shut down the Youtube channel of a UCF kicker.
“They said people were going to the channel simply because this young man was a UCF football player,” Jessop said.
The NCAA has always argued that student athletes must maintain amateurism and only be allowed to receive scholarship as compensation for their talents.
“They are arguing this is unconstitutional,” Jessop said of the NCAA’s response to SB 206.
In 2009, former UCLA player Ed O’bannon sued the NCAA arguing that the use of his likeness violated anti-trust laws.
“If Ed O’Bannon didn’t take that first step, I don’t think the minds of legislators across the country would be thinking this way,” Jessop said.
Renowned video game maker EA Sports stopped making collegiate games after the O’Bannon case. The NCAA has yet to incorporate scholarships for ESports gamers who generally play in cash tournaments. This has yet to happen, even though some colleges are already giving scholarships to Hoosiers for their gaming talents.
“[The NCAA has] tabled it and talked about it,” said John Robertson, who recently launched an interscholastic ESports league for high schools called the Indiana High School Network. “They are not going to touch it because of the pandoras box that it opens for players making money.”