Scott Kinser/Cal Sport Media via AP Images
Alabama Crimson Tide quarterback Tua Tagovailoa at Williams-Brice Stadium in Columbia, South Carolina
California Senator Nancy Skinner’s Senate Bill 206 would permit athletes to earn outside compensation from the use of their own name, image, and likeness (NIL)—and it unanimously flew through both houses of the state legislature. SB206, which now awaits Governor Gavin Newsom’s signature, has drawn sharp warnings from the NCAA, as the bill threatens its ability to exploit college athletes participating under its model of “amateurism.”
Given the NCAA’s threats, one might assume that the bill’s passage would result in some cataclysmic event, threatening the very existence of college sports. Nothing could be further from the truth.
The act would merely allow athletes to enjoy (almost) the same rights over their own identities that every student at their school enjoys, unencumbered by NCAA cartel restrictions. Even these rights are limited, as athletes could not enter into an agreement that conflicts with a team’s existing contracts.
The prospect of returning even a portion of NIL rights to college athletes has prompted howls of dismay from the NCAA and its acolytes. On June 17, 2019, NCAA President Mark Emmert sent a letter requesting that the State Senate postpone consideration of the bill. More recently, the NCAA informed Governor Newsom that it regarded the bill as “unconstitutional,” signaling an intention to rely on the Constitution’s Commerce Clause to raise a legal challenge. The letter also claimed that SB206 would upend the “level playing field” that the NCAA claims it has supported in college athletics.
Those familiar with the O’Bannon v. NCAA case may be hard pressed to stifle their laughter upon seeing the NCAA trot out such risible, well-refuted claims. During the O’Bannon trial, plaintiffs’ counsel presented a quote from NCAA special advisor Wally Renfro, a 40-year veteran of the institution, who in an email titled “Financial Underpinnings of Athletics,” referred to Division I membership as “the haves, the have-nots, and the forget-about-its.” Indeed, so wide is the disparity that the “Power Five” conference football programs routinely make “guarantee game” payments to smaller teams. For example, Tulane received $1.94 million for playing SEC powerhouse Auburn earlier this year. In her O’Bannon ruling, District Judge Claudia Wilken, citing academic consensus on the matter, rejected the NCAA’s competitive balance justification, opining that:
The NCAA does not do anything to rein in spending by the high-revenue schools or minimize existing disparities in revenue and recruiting … the major conferences—and the highest revenue schools—typically receive the greatest payouts, which hinders, rather than promotes, competitive balance.
The Ninth Circuit Court of Appeals affirmed Judge Wilken’s ruling on this point. In the subsequent Alston v. NCAA case, the NCAA, perhaps sensing a lost cause, did not even request that the court reconsider its competitive balance justification for its restraint on athlete compensation.
Some athletes can already be paid in cash for their athletic talents. NCAA athletes competing in the Olympics receive cash payment for medaling in their sport. As CBS’s Dennis Dodd pointed out in 2018, University of Texas swimmer Joseph Schooling received $753,000 as payment for his gold medal from his native Singapore. He still won six medals at the NCAA championships. Kyler Murray received a $4.7 million bonus from the Oakland Athletics, yet remained eligible to quarterback the Oklahoma Sooners. As long as this was not football money, the NCAA concluded that he was eligible to keep playing, though his college baseball career was over.
Clearly the NCAA’s real concern lies with the prospect that college athletes in the major revenue sports of basketball and football might receive something more than table scraps for the extraordinary sums they garner for their schools. Those arguing that athletes receive an “education” in exchange for their 40-plus hours per week of labor and the millions they bring to the school may want to revisit the long-standing academic fraud case at the University of North Carolina at Chapel Hill, one of the most respected public universities in the nation.
Nonetheless, the NCAA’s “level playing field” canard does signal at least an attempt, serious or not, to lean on Ninth Circuit precedent set in the 1992 NCAA v. Miller case, which involved NCAA sanctions against then-coach Jerry Tarkanian and the University of Nevada-Las Vegas. There, the NCAA challenged various provisions of Nevada statute NRS 398 that set forth the state’s guidelines for the imposition of NCAA sanctions upon any college or university in the state. The district court found that the Nevada statute was “significantly burdensome on the NCAA’s objective of maintaining a ‘level playing field’ within intercollegiate athletics.” The Ninth Circuit affirmed, concluding that the practical effect of the regulation would have been to control conduct beyond the state’s boundaries.
However, this finding has little relevance for the California State Senate Bill. State and federal legislators have begun to chip away at the NCAA cartel’s economic control over college athletes. South Carolina lawmakers recently announced plans to file a bill similar to SB206. North Carolina Representative Mark Walker has introduced H.R. 1804, the Student-Athlete Equity Act, which has been referred to the House Ways and Means Committee. Representative Walker’s bill proposes to “prohibit qualified amateur sports organizations from prohibiting or substantially restricting the use of an athletes name, image, or likeness.” Senator Chris Murphy has also taken up the cause of fair compensation for college athletes, a position highlighted in his recently-released “Madness, Inc” commentary. Vermont Senator and presidential candidate Bernie Sanders recently tweeted “College athletes are workers. Pay them.” So too has fellow candidate Andrew Yang. It should be clear then that SB206 is not a lone voice calling for change, but rather part of a growing legislative chorus calling for an end to the exploitation of college athletes.
Moreover, the California bill does not prevent any other state’s colleges and universities from participating in the NCAA cartel’s collusive restrictions. Nor does it prevent California’s own schools from continuing to collude with other NCAA members to limit athlete compensation in other areas. The bill simply says that California universities cannot participate in cartel restrictions only with regard to NIL rights. In raising a Commerce Clause challenge on this issue, the NCAA would offer the absurd argument that SB206’s removal of a restraint on trade should be subordinate to a cartel’s nationwide imposition of that same restraint, a position at clear odds with the Sherman Antitrust Act.
Any claim that the bill would “burden” interstate commerce is suspect for at least two other reasons. First, the bill does not impose additional regulations. Rather it deregulates, freeing college athletes from the economic restraints imposed upon their own identities by the NCAA, an economic cartel that has lost the last two antitrust cases it has faced. Second, the benefits to athletes are not local. Colleges and universities in California, like any other state, recruit nationally and internationally. As such, the NIL benefits would not be restricted by any state boundary. Further, any third party may compensate athletes competing for California schools in exchange for their NIL rights, not just California companies or individuals.
The NCAA may also claim that the bill would give California schools a recruiting advantage over out-of-state competitors, particularly for players with the ability to monetize their NIL rights. However, California schools, including both USC and Stanford, have voiced their opposition to the bill. The sheer prospect of having to share their collusively-extracted gains with the labor that generated them apparently overwhelms any perceived recruiting advantage.
The financial stakes offer some insight into why California schools oppose the bill. In 2016, UCLA signed a 15-year, $280 million apparel contract with Under Armour (see other schools’ contracts here). Apparel contracts can have implications beyond the athletic department. Documents from the UNC-Chapel Hill show that the school’s Nike contract included $2 million used by the chancellor to protect non-tenure track positions in the College of Arts & Sciences, School of Nursing, and School of Education. These details underscore the immense value schools extract from the success of their athletic programs, success that is built upon the work of college athletes, whose NIL rights the schools have colluded to appropriate.
Finally, the NCAA will likely attempt to revisit the Ninth Circuit’s decision in O’Bannon, which held that payments to athletes should be “tethered to education.” This provided the support for providing college athletes with an approximately $2,500 to $5,000 “cost-of-attendance” (COA) stipend, a move the NCAA fought. While these COA payments provide a small measure of relief, particularly given evidence that 86 percent of college athletes live below the poverty line, consider this: During this year’s PAC-12 basketball tournament, Commissioner Larry Scott, whose $4.8 million annual salary exceeds that of the Big Ten and SEC Commissioners combined, stayed in a 3,300 square-foot, $7,500 per night suite at the Aria Las Vegas. A few months earlier, during the Alston v. NCAA trial, Scott pontificated about the “purity” of the college game, the same “purity” that pays his salary and lifestyle. This of course, does not even begin to address the racial component of this injustice, a topic that journalist Patrick Hruby explored in his excellent 2016 article “Four Years A Student-Athlete: The Racial Injustice of Big-Time College Sports.”
Allowing NIL payments would offer additional education-related benefits. First, for many athletes with uncertain pro futures debating early entry into the professional ranks, NIL payments would allow them to stay in school and finish their degrees without being compelled by financial considerations to make a risky bet. Basketball agents acknowledged this reality in a letter sent to the NCAA this past weekend, explaining that “Every year, men’s basketball student-athletes continue to make poor decisions on whether to remain in the NBA Draft or return to school.” Former Georgetown guard L.J Peak, in Sam Vecenie’s 2017 Vice article, explained how financial considerations led him to leave early and enter his name into the NBA draft, despite expecting to be a second-round pick at best. Allowing NIL payments would benefit fans as well, who often complain about early entry’s effect on roster turnover, a point that addresses the NCAA’s “consumer demand” defense for amateurism.
Second, it would relieve many athletes, on whose success their families often depend, from significant stress. In 2015, the University of Mississippi’s Laremy Tunsil, one of the top football players in arguably the nation’s top college football conference, the SEC, was forced to ask coaches for assistance with his mother’s $305 power and water bill. One might wonder if this sum would have covered even a single room service delivery at Larry Scott’s Aria suite. Meanwhile, in the O’Bannon antitrust trial, the NCAA paid one of its economic experts, who argued against compensating athletes for their NIL rights, $2300 per hour. Two hours of this expert’s time in 2013 cost more than an entire year’s COA stipend for an out-of-state football player at Alabama in 2015.
While not every athlete could parlay their NIL into a contract with Nike or Coca-Cola, a large number would likely sign smaller endorsement deals with local businesses. The name of an athlete on a little-known product, or perhaps a local doctor’s office or car dealership, can yield financial benefits that can make the difference between struggling financially and being able to remain in school and perhaps help her/his family.
Despite its chest-thumping, the NCAA argues against SB206 from a position of legal, economic, and moral weakness. Public opinion, which the NCAA has attempted to sway with its widely-mocked propaganda campaigns, has begun to turn against “amateurism.” Terren Klein, CEO of College Pulse, recently told CNBC’s Make It, “The majority of students are in favor of paying student-athletes and give overwhelming support for allowing student-athletes to profit off their name and image.” And before one casually dismisses college students’ opinions on the matter, the University of Alabama apparently finds their participation important enough to track fourth-quarter early student departures from football games.
The NCAA’s threats of a sports apocalypse if athletes were allowed to regain their own identities only expose it as a decrepit and morally bankrupt institution struggling to maintain its economic stranglehold over the lives of young athletes. Thanks to legislators such as Nancy Skinner, Chris Murphy, and others who have taken up the fight for economic justice, the NCAA’s grip has begun to loosen.
The author has not been involved in any NCAA-related antitrust litigation and has received no compensation from any party in such litigation. He was not paid for writing this piece.
