California to let college athletes make money, defying NCAA

California will let college athletes hire agents and make money from endorsements, defying the Indianapolis-based NCAA and setting up a likely legal challenge that could reshape amateur sports in the United States.

Democratic Gov. Gavin Newsom announced Monday he signed the law that would let athletes at California universities make money from their images, names or likenesses. The law also bans schools from kicking athletes off the team if they get paid.

Under the law, which takes effect in 2023, students at public and private universities in the state will be allowed to sign deals with sneaker companies, soft drink makers or other advertisers, just like the pros.

Newsom and others cast the law as an attempt to bring more fairness to big-money college sports and let athletes share in the wealth they create for their schools.

“Other college students with a talent, whether it be literature, music, or technological innovation, can monetize their skill and hard work,” he said. “Student athletes, however, are prohibited from being compensated while their respective colleges and universities make millions, often at great risk to athletes’ health, academics and professional careers.”

Newsom tweeted a video showing him signing the law during a special episode of HBO’s “The Shop: Uninterrupted” alongside NBA superstar LeBron James and other athletes.

He predicted other states will introduce similar legislation. Two lawmakers in South Carolina have already announced plans to do so.

The new law applies to all sports, though the big money to be made is in football and basketball. It bars schools from kicking athletes off the team if they get paid. It does not apply to community colleges and prohibits athletes from accepting endorsement deals that conflict with their schools’ existing contracts.

The NCAA, which had asked Newsom to veto the bill, responded by saying it will consider its “next steps” while also moving forward with “efforts to make adjustments to NCAA name, image and likeness rules that are both realistic in modern society and tied to higher education.”

The NCAA, which has 1,100 member schools and claims nearly a half-million athletes, said that changes are needed but must be done at a national level through the athletic association, not through a patchwork of state laws.

Before the governor signed the bill, the NCAA cautioned that the law would give California universities an unfair recruiting advantage, which could prompt the association to bar them from competition.

Powerhouses like the University of Southern California, UCLA, Stanford and the University of California, Berkeley, could find themselves banned.

But while the NCAA is the top governing body for college sports, membership is voluntary. If the California schools are forced out, they could form a new governing body.

The law represents another instance of California jumping out in front of other states and positioning itself in the vanguard of change.

The movement to allow student athletes to profit from their hard work on the court or the playing field has been cast as a matter of economic fairness and civil rights, with critics complaining that schools are getting rich off the backs off athletes — often, black athletes struggling to get by financially.

Professional athletes have endorsed the law, including James, whose 14-year-old son is a closely watched basketball prospect in Los Angeles and will be 18 when the measure takes effect.

On Instagram, James exulted over the signing of the measure, saying it will “change the lives for countless athletes who deserve it!”

He added: “NCAA, you got the next move. We can solve this for everyone!”

Democratic state Sen. Nancy Skinner, the bill’s author, said it corrects a longtime wrong: “For decades, college sports has generated billions for all involved except the very people most responsible for creating the wealth. That’s wrong.”

But the Pac-12 Conference, which includes the four powerhouse California schools, warned that the law “will lead to the professionalization of college sports and many unintended consequences related to this professionalism.”

It said that the measure could affect how California schools compete nationally, reduce opportunities for student athletes in Olympic sports and harm female competitors.

“All reforms must treat our student-athletes as students pursuing an education, and not as professional athletes,” the conference said.

The new law does not go so far as to allow colleges and universities to pay athletes directly for their play.

The NCAA has steadfastly refused to pay players in most cases. But a committee led by Ohio State Athletic Director Gene Smith and Big East Commissioner Val Ackerman is studying other ways players could make money. Its report is expected in October.

The NCAA does let some athletes accept money in some instances. Tennis players can accept up to $10,000 in prize money per year, and Olympians can accept winnings from their competitions.

Also, many schools pay players yearly cost-of-living stipends of $2,000 to $4,000.

The NCAA reported $1.1 billion in revenue in 2017.

Please enable JavaScript to view this content.

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.

5 thoughts on “California to let college athletes make money, defying NCAA

  1. Let California go. With all of their “forward thinking”, let them take care of themselves.

    If this ends with student athletes becoming paid athletes, let’s take away scholarships and give to those that want to be students first. If you are getting paid, because the school allowed you to be on a team, you should pay for your own education and living expenses.

  2. Why bother going to college and “ACTING” like a student athlete, just turn pro. If the athletes are going to be paid to play in state funded university facilities lets charge them rent to display their talent as we would any production company using a public facility. Agents get 10% the facility rental and the associated clean up, labor and maintenance should be 45%, with California taking 25% the athletes earn zero after paying federal taxes on the income and probably will be out of pocket.

  3. Do they still get scholarships? They shouldn’t, they will be making more than their Professors, so why would they need a scholarship that they may or may not even use.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.