Update: The bill has passed through the California Senate unanimously and will now move to Gov. Gavin Newsom’s desk for ratification. See below.
The California bill that would see the state’s college athletes win the right to market their name, image and likeness is now just two steps away from becoming law. After sailing through the state assembly with a 73-0 vote on Monday, it will now head back to the California senate, where a second vote (the first version passed 31-5) would send it to the desk of Gov. Gavin Newsom, who would then be expected to sign it into law, effective Jan. 1, 2023.
Now, the original bill has been watered down a bit since it was first written. An amendment introduced in the state senate added a clause that would prevent athletes from entering agreements that conflict with their school’s existing sponsorships — so, for example, USC quarterback Kedon Slovis could not take a check to wear Adidas cleats at a Nike school.
Athlete would not be allowed to have deal that conflicts with a school contract, but a school contract would not be allowed to restrict athlete from using NIL for a commercial purpose when not engaged in official team activities
— Steve Berkowitz (@ByBerkowitz) September 4, 2019
In response to this law, the NCAA could simply change its definition of amateurism to bar athletes from being paid directly by their schools but allow everything else — the so-called Olympic model, which the California law would enact. In fact, the NCAA has responded by forming a working group to examine NLI issues, and theoretically that working group could recommend just that.
Or the NCAA could choose Door No. 2, which is to fight.
The NCAA has chosen Door No. 2.
“If the bill becomes law and California’s 58 NCAA schools are compelled to allow an unrestricted name, image and likeness scheme, it would erase the critical distinction between college and professional athletics and, because it gives those schools an unfair recruiting advantage, would result in them eventually being unable to compete in NCAA competitions,” the NCAA wrote in a letter to Gov. Newsom, signed by the entire NCAA Board of Governors (that is, the college presidents that run the NCAA, not actual state governors). “These outcomes are untenable and would negatively impact more than 24,000 California student-athletes across three divisions.”
The Act itself is also vulnerable to legal challenge. The NCAA or a California college can plausibly argue that the Act would violate Article, I, Section 8 of the U.S. Constitution. This part of the Constitution refers to the exclusive power of Congress to regulate interstate commerce. Although the scope of interstate commerce has triggered differing opinions over the last 230 years, the contemporary view is that numerous kinds of activities constitute commercial actions. The sale and distribution of pharmaceutical drugs. Phone calls. Health care services. Internet. Banking transactions. Transportation. Broadcasts. Should any of these activities “cross” state lines they would qualify as interstate commerce.
This is where the Act becomes problematical. California colleges play games in other states and travel to those states. They also host games from colleges which travel to California. Broadcasts of those games cross state lines. The same is true of Internet streams. This is just a sample: the list of commercial activities related to NCAA games is long and those activities often extend beyond one state.
Now, should the bill pass as written, the NCAA likely couldn’t just kick out every single member from the state of California and call it a day. It wouldn’t be that simple.
For starters, the NCAA rakes in millions of dollars from its “corporate champions”, partners such as Coca-Cola, AT&T and Capital One, not to mention its 10-figure contract to air the NCAA Tournament with CBS and Turner. Those corporations hand the NCAA money in exchange for the right to market to all 50 states, and they likely wouldn’t let the NCAA kick the our nation’s most populous state out of the club without a few questions.
Simply put, this is truly uncharted territory for the college sports establishment. California Senate Bill 206 could go a number of different ways from here, and each side faces real risk in how it responds, which will make it all the more fascinating to see play out.
Wednesday PM Update: Senator Nancy Skinner announced on Wednesday evening that the bill will now move to Gov. Newsom’s desk, where he will be expected to write it into California law, effective Jan. 1, 2023.
LET’S GO!! The Calif. Legislature has spoken! The Senate just gave final OK to #SB206, the Fair Pay to Play Act, on a 39-0 vote! SB 206 will let college athletes earn $$ from their name, image, and likeness.
Next stop, @GavinNewsom’s desk!
— Nancy Skinner (@NancySkinnerCA) September 11, 2019