California’s Fair Pay to Play Act: Death of the NCAA?

John Yu

California’s Senate Bill No. 206,[1] better known as the Fair Pay to Play Act (FPPA), has been generating quite a bit of publicity in recent months. The FPPA had, among other things, promised to allow college athletes to be compensated for their name, image, and likeness rights (NILs),[2] which is forbidden under the National Collegiate Athletic Association (NCAA) rules.[3] Options to solve this quagmire include legislative proposals like the FPPA and legal challenges against the NCAA by states supporting student-athlete NIL compensation.[4] There are, however, several problems with each option.

Problems with Current Legislative Proposals

Legislative proposals currently on the table would likely create an uneven system regulating student-athlete NILs across the country. California’s FPPA is somewhat different in its scope and its reach from bills that have been proposed in other states.[5] The NCAA can therefore argue quite convincingly that these legislative proposals (1) infringe upon the NCAA’s authority; and (2) would create such a high degree of chaos through uneven regulation that the NCAA can no longer effectively function. Indeed, in NCAA v. Miller, the Ninth Circuit held that Nevada had violated the Commerce Clause by having their own procedural rights for college athletes accused of wrongdoing by the NCAA.[6]

A federal legislative solution would appear to avoid all the pitfalls that are inherent in the state-by-state legislative approach, but it has a critical flaw: it is not clear that the bills put forth so far have strong bipartisan support.[7] There is also the problem of overregulation—a federal bill would mean that there would be a one-size-fits-all solution to the NIL rights issue, and this might be a tough pill to swallow for some states.

Problems with Legal Challenges Against the NCAA

Could a legal challenge against the NCAA by states be the optimal solution then? In O’Bannon v. NCAA, the Ninth Circuit held that the NCAA and its member schools had violated federal antitrust law by setting the value of NILs of college players at zero.[8] This is encouraging news, but in O’Bannon, the Ninth Circuit also made a very important distinction between “education-related compensation” and “cash sums untethered to educational expenses.”[9] The court made it clear that transitioning from the former to the latter was a “quantum leap,” and it also indicated that “once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point.”[10]

Another seminal case involving the NCAA, NCAA v. Board of Regents of the University of Oklahoma,[11] also raises significant difficulties. Though the case dealt with college football television rights, it contains dicta that the NCAA has relied on in recent lawsuits: “athletes must not be paid, must be required to attend class, and the like.”[12] Curiously, when the NCAA moved to have the Supreme Court hear O’Bannon, it denied cert. However, it is clear that the O’Bannon ruling is not compatible with the Supreme Court’s opinion that student-athletes should not be paid, and so a legal challenge by states against the NCAA would likely be long, arduous, and fraught with uncertainty.[13]

An NCAA Led, Nationwide Solution

While the states have placed pressure on the NCAA to reform its stance on NILs, schools can also pressure the organization. Such a move would be much more effective, since the NCAA is, after all, an organization that exists to serve its constituents (i.e. the schools themselves). Thus, if a large number of schools move to have the NCAA readjust its stance on NILs, the NCAA will have to do so, since “members ultimately decide which rules to adopt . . . and implement them on the campus.”[14] A school-led effort has two major benefits. First, it could lead to a much faster solution, since the constituent members of the NCAA can adopt and implement many of the changes proposed by various state legislation like California’s FPPA on their own accord. Second, it will avoid many of the problems inherent in many of the current proposals to this issue—since there will be no need for the NCAA to wait for the outcome of legal challenges on the constitutionality of any of the state’s bills before it can implement any solution on the issue of NILs.[15]

It is true that this solution presupposes that schools, and thereby the NCAA, will be interested in change and will move quickly to do so. Fortunately, it is likely that the NCAA will have to change its stance on NILs for it to maintain its relevancy within the college athletics scene. Should the NCAA fail to move quickly, many of the most popular schools may move to break away from the NCAA to form their own leagues and/or regulatory bodies.[16] There are some competitors to the NCAA on the horizon as well—many professional sports now have minor leagues that compete with the NCAA and its constituent schools for athletic talent. The XFL, which launched in February 2020, is pitching itself as an alternative to football players looking to skip the NCAA system altogether.[17] It is, in its own words, “not restricted by the rules that exist in other professional leagues.”[18] In basketball, the National Basketball Association’s G League will, beginning in the 2019 to 2020 season, allow elite prospects that are at least 18 years old to sign contracts that will pay $125,000 for a five-month season.[19] Thus, in short, the NCAA does not have a monopoly on college-age athletic talent, and if it does not move quickly to change its position on issues like NILs, it will lose its relevance over time. It would be wise, therefore, for the NCAA to view this issue of NILs not as an “existential threat”[20] but as an opportunity—an opportunity for itself to show that it is capable of responding to changes without outside interference and before it is too late.

 

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[1] S.B. 206, 2019-2020 Reg. Sess. (Cal. 2019), Collegiate Athletics: Student Athlete Compensation and Representation, California Legislative Information, https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB206.

[2] Id.

[3] Nat’l Collegiate Athletic Ass’n, 2019-2020 NCAA Division I Manual, Bylaw 12.1.2.1.1 (2020).

[4] Thomas Baker, 5 Issues to Keep An Eye On With The NCAA’s New NIL Policy, Forbes (Nov. 1, 2019), https://www.forbes.com/sites/thomasbaker/2019/11/01/examining-the-ncaas-evolving-nil-policy-keep-an-eye-on-the-following-issues/#171e67507591.

[5] Charlotte Carroll, Tracking NCAA Fair Play Legislation Across the Country, Sports Illustrated (Oct. 2, 2019), https://www.si.com/college/2019/10/02/tracking-ncaa-fair-play-image-likeness-laws.

[6] NCAA v. Miller, 10 F.3d 633, 640 (9th Cir. 1993).

[7] Dan Murphy, Congressman to Propose Federal Legislation for Paying College Athletes, ESPN (Oct. 2, 2019), https://www.espn.com/college-sports/story/_/id/27751454/congressman-propose-federal-legislation-paying-college-athletes.

[8] O’Bannon v. NCAA, 802 F.3d 1049, 1070 (9th Cir. 2015).

[9] Id., at 1078.

[10] Id.

[11] NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984).

[12] Id. at 102 (emphasis added).

[13] O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015).

[14] What is the NCAA?, Nat’l Collegiate Athletic Ass’n, http://www.ncaa.org/about/resources/media-center/ncaa-101/what-ncaa.

[15] NCAA responds to California Senate Bill 206, Nat’l Collegiate Athletic Ass’n, https://www.ncaa.org/about/resources/media-center/news/ncaa-responds-california-senate-bill-206 (last visited Jan. 15, 2020). In its response, the NCAA made it clear that SB 206 is an “unconstitutional bill” due to potential Commerce Clause concerns.

[16] Dan Wolken & George Schroeder, Is Next College Sports Realignment a Split From the NCAA?, USA Today (Apr. 21, 2013), https://www.usatoday.com/story/sports/ncaaf/2013/04/21/college-football-ncaa-split/2097115/.

[17] Kaelen Jones, XFL Restates It is Not Restricted by NFL Eligibility Rules, Sports Illustrated (Jan. 8, 2019), https://www.si.com/nfl/2019/01/08/xfl-eligibility-rules-nfl-restrctions-age-college-football-draft.

[18] Id.

[19] Jonathan Givony, G League to Offer $125K to Elite Prospects as Alternative to College One-and-Done Route, ESPN (Oct. 18, 2018), https://www.espn.com/nba/story/_/id/25015812/g-league-offer-professional-path-elite-prospects-not-wanting-go-one-done-route-ncaa.

[20] Dennis Dodd, NCAA Prez Calls Name, Image and Likeness Rights an ‘Existential Threat’ to College Sports, CBS Sports (Sep. 25, 2019), https://www.cbssports.com/college-football/news/ncaa-prez-calls-name-image-and-likeness-rights-an-existential-threat-to-college-sports/.