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California Assembly passes bill allowing in-state college athletes to earn paid endorsements

Big changes and confrontations potentially coming.

State capitol building, Sacramento, California Photo by: Education Images/Universal Images Group via Getty Images

The path to paying student-athletes took a huge step forward today. The California Assembly has taken another step closer to allowing players at universities like Cal, Stanford, UCLA and USC the ability to profit from endorsements, as SB 206 unanimously passed with bipartisan support.

The bill states that all college players will now have the ability to profit off of their own name, image or likeness. Universities would be prohibited from being able to strip players of their scholarships, basically ensuring athletes the ability to get paid for their efforts in generating millions of dollars in revenue for their alma maters.

The bill actually came from Assemblywoman Nancy Skinner of Berkeley.

According to Skinner, she introduced the bill because students are the only ones in the college athletics system who do not currently receive proper compensation. She considers it an issue of “fundamental fairness.”

“These students are being exploited right now. They are wearing corporate logos; they are the core of alumni donations,” Skinner said. “And yet, they share no monetary value.”

Skinner compared the current treatment of student-athletes to the working conditions of UC Berkeley teaching assistants in the 1980s, explaining that student instructors previously received financial aid but worked without pay. It wasn’t until Skinner founded the Union of Graduate Student Employees — now known as the Graduate Student Instructors, or GSI, Union — that GSIs were granted compensation.

There are some details that need to be ironed out, like reconciling the assembly bill with the state senate bill, as school deals with apparel companies also have to be considered and how individual athletes would have to work around that, but a final bill appears to be headed toward Governor Gavin Newsom’s desk in the next few weeks.

If ratified, that doesn’t mean that Cal, Stanford, UCLA and USC players will suddenly be able to suit up and sign endorsement deals. The state of California could be headed for a battle with the NCAA, the Pac-12, and a host of California university leaders opposed to such measures.

The biggest salvo the NCAA is threatening to levy is banning programs who allow players to earn money from competing in national titles, citing an unfair competitive advantage.

However, if the NCAA does decide to enforce such a measure, California has the right to countersue, as the NCAA would be in violation of antitrust and More from Forbes:

As a private trade association, the National Collegiate Athletic Association is generally free to adopt any bylaws that it wants. But there are two important caveats to the general principle of non-interference with trade association rules. First, a trade association such as the NCAA may not enforce any bylaw that violates federal or state law. Second, a trade association must enact its bylaws in good faith, and in compliance with the “basic rudiments of due process.”

With these two caveats in mind, there is a strong argument that any attempt by the NCAA to ban California member colleges from competing in postseason events based on their compliance with state laws around names, images and likeness would violate both federal antitrust laws and state common-law rights.

If the NCAA loses its suit, expect more states to start immediately filing similar bills. This could be the first domino of many that hastens the eventual demise of the NCAA, and the eventual break-off of the major Power 5 college football programs into their own super conferences.

For those who wish to review the full bill, click here. Here’s the main clause:

This bill would prohibit California postsecondary educational institutions except community colleges, and every athletic association, conference, or other group or organization with authority over intercollegiate athletics, from providing a prospective intercollegiate student athlete with compensation in relation to the athlete’s name, image, or likeness, or preventing a student participating in intercollegiate athletics from earning compensation as a result of the use of the student’s name, image, or likeness or obtaining professional representation relating to the student’s participation in intercollegiate athletics.

The bill also would prohibit an athletic association, conference, or other group or organization with authority over intercollegiate athletics from preventing a postsecondary educational institution other than a community college from participating in intercollegiate athletics as a result of the compensation of a student athlete for the use of the student’s name, image, or likeness.

The bill would require professional representation obtained by student athletes to be from persons licensed by the state. The bill would specify that athlete agents shall comply with federal law in their relationships with student athletes. The bill would prohibit the revocation of a student’s scholarship as a result of earning compensation or obtaining legal representation as authorized under these provisions. The bill would prohibit a student athlete from entering into a contract providing compensation to the athlete for use of the athlete’s name, image, or likeness if a provision of the contract is in conflict with a provision of the athlete’s team contract. The bill would prohibit a team contract from preventing a student athlete from using the athlete’s name, image, or likeness for a commercial purpose when the athlete is not engaged in official team activities, as specified.

These provisions would become operative on January 1, 2023.

This bill has earned the support of athletes like LeBron James, Kevin Durant, and Draymond Green.