California Signs Landmark ‘Fair Pay To Play Act’, Forever Changing College Sports

• California became the first state to support student-athlete compensation with their passage of CA SB 206.
• Also known as the Fair Pay to Play Act, the bill allows student-athletes to profit off their name, image, and likeness.
• The NCAA has warned California legislators that this measure would result in the ban of postseason play for California schools.

SACRAMENTO, Calif. – California has taken major steps in the advancement of student-athletes, taking a stand against the non-profit organization known as the NCAA.

Introduced by Senator Nancy Skinner (D- Berkeley), the Fair Pay to Play Act, or CA SB 206, received instant support from the California legislature despite multiple attempts by the NCAA to stall or negate the bill.

After receiving a 73-0 vote in the California Assembly and a 39-0 vote in the California Senate, the legislators sent CA SB 206 to the desk of Governor Gavin Newsom for the final approval.

Newsom, a former baseball player for Santa Clara University, has first-hand experience with the NCAA as a student-athlete and determined it was finally time for a change.

“Colleges reap billions from student-athletes but block them from earning a single dollar, said Governor Newsom. “That’s a bankrupt model.”

The bill, that will go into effect beginning in 2023, allows California student-athletes to make money for themselves, with the support of an agent – all while keeping their amateur status.

What Is The Fair Pay To Play Act?

The Act that will forever change the balance of power in college sports is a movement in support of collegiate athletes receiving some monetary benefit.

The student-athletes will not be paid directly from the university, but are eligible to sign contracts and make money based off their name, image, and likeness. The measure also allows these athletes to make money in side-jobs such as coaching youth sports.

The Fair Pay to Play Act is the first of its kind throughout the country, as it does not require universities to pay their students, but makes it illegal for them to remove an athlete’s scholarship should they get financial compensation.

To keep with existing contracts, the players may sign with whoever and whatever brand they like, just as long as the university doesn’t have a contract with a competitor in place.

It will not apply to community colleges but does allow the athletes to sign with an agent – something that the NCAA forbids.

The Impact Of Fair Pay To Play On The NCAA

As the NCAA is the governing body for collegiate sports, the organization repeatedly informed California lawmakers that approving this measure would be met with consequences.

Originally, the NCAA had requested that the state delay its approval of this bill in order for the organization to form a committee looking to solve the compensation issues on a grand scale.

While the committee is expected to report their findings and discussions in October, the state of California had no options of waiting, as their legislative session ended this past weekend.

Because the bill doesn’t take effect until 2023, the NCAA and the California universities have some time to work out the kinks. But as it stands, the NCAA would prohibit the universities from taking part in any post-season tournament due to an unfair recruiting advantage these schools would possess.

The NCAA has changed some of their rules regarding student-athlete compensation in the past, such as how Olympic athletes can now accept winnings from competitions. Power 5 conferences are also able to pay their student-athletes stipends for expenses regarding their cost of living, not exceeding $4,000.

The ball is now in the court of the NCAA to act, but if nothing gets done before the 2023 activation date, expect to see a few lawsuits filed from both parties.

The NCAA has claimed the measure is breaking laws that focus on protecting interstate commerce and a judge may need to rule in favor of the legislature or the non-profit organization.

Either way, the California schools are not required to be under the reach of the NCAA, as being a member is completely voluntary. If issues cannot seem to work out, don’t rule out the possibility of California starting their own collegiate sports league.

Other Bills Around The Country

The news of California taking the strong stance has already garnered much support from other legislative bodies around the United States.

“It’s going to change college sports for the better by having now the interest finally of the athletes on par with the interests of the institution,” said Governor Newsom. “Now we are rebalancing that power.”

Filed in March, the North Carolina Senate introduced a similar measure to protect the rights of their student-athletes allowing them to make money off their image, name, and likeness. The measure, NC SB 335, would also remove the tax-exempt and non-profit status from the NCAA should they not comply with the compensation terms.

This bill has not moved through the legislature as easily as California’s bill did, but the discussion has been started. Just south, South Carolina has announced plans to introduce their version of the bill, as lawmakers in Colorado, Maryland, Florida, and Washington State have also shown their support of the idea as well.

Even more advanced though is New York, who introduced a measure entitled the “New York Collegiate Athletic Participation Compensation Act”. While the bill, NY SB 6722, follows the standard set by California, it also would allow for all student-athletes to share 15% of the annual revenue from ticket sales.

“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,” said the NCAA in a tweet.

How Will The Fair Pay To Play Act Affect Sports Betting?

With legal sports betting now operational in over a dozen states, an eye also turns to how the Fair Pay To Play Act will affect the sports betting industry.

While the schools that are eligible to allow players to receive compensation for their likeness are all members of the Pac-12, it would be a surprise to nobody to see more athletes attempt to play for these programs.

In doing so, the slippery slope argument is that the talent pool will increase, causing everything else to increase in value as well. This extends from media deals and television partnerships between the Pac-12 and the broadcasting companies to increased betting lines and vigorish offered by sportsbooks on the California universities.

Furthermore, with more high-profile athletes participating, expect ticket prices and betting handles to also increase through the support of paid student-athletes.

Though the NCAA opposes all forms of gambling, there would be no restriction from athletes signing a deal with a sports betting business as well. Whether the company is a casino, sportsbook operator, or technology company, having a famous athlete as the face to a branded sportsbook might be on display.

There is certainly a major shift happening in regards to college sports, and this is only the beginning of many monumental changes to come.

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