California’s Fair Pay to Play Act

By SETH SANDRONSKY

In the Golden State, the National Collegiate Athletic Association is facing a big change. In late September, California’s Democratic Gov. Gavin Newsom signed into law Senate Bill 206 the Fair Pay to Play Act to let NCAA student athletes earn money from endorsements and sports agents, effective Jan. 1, 2023.

When that day arrives, the NCAA will lose its monopoly on revenue from the labor of student athletes. That is a chunk of change, indeed.

The nonprofit membership group governs Division I, II and III student athletics, and earned revenue of $1.06 billion in 2017 versus $996 million in 1996, a lucrative enterprise. The vast bulk of the NCAA’s annual revenue, $844 million, comes from men’s Division I basketball playoffs via TV and marketing rights. The NCAA distributes its revenue to sport sponsorship and scholarship funds for college athletes, team travel, food and lodging, and academic programs and services.

For the record, the NCAA opposes the Fair Pay to Play Act, preferring a national approach to reform. That tack acknowledges the limits of the status quo, while seeking to maintain control in a way that excludes citizens’ influence.

“The NCAA agrees changes are needed to continue to support student-athletes, but improvement needs to happen on a national level through the NCAA’s rules-making process,” the group said in a statement. “As more states consider their own specific legislation related to this topic, it is clear that a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field for 1,100 campuses and nearly half a million student-athletes nationwide.”

The NCAA’s rhetoric about seeking a level playing field rings false, according to Dan A. Rascher, Ph.D., a professor of sports economics and finance at the University of San Francisco. There is for instance, no competitive balance between schools in NCAA men’s basketball and football, he said. Both sports at the Division 1 level are revenue positive. Why would the NCAA seek to change that aspect of its nonprofit business model?

Meanwhile, the thinking that the NCAA is behind the times with its policy of banning student athletes from earning labor income is spreading, politically speaking. Lawmakers in 11 blue and red states are looking at legislation similar to the new California law.

We see state politicians in part responding to business interests that seek to sign contracts with NCAA student athletes able to earn labor income. NBA perennial superstar LeBron James and Rich Paul, his friend and owner of Klutch Sports Group, which manages pro athletes, joined Gov. Newsom when he signed the Fair Pay to Play Act. That image speaks volumes.

While the NCAA’s response to the Fair Pay to Play Act is uncertain at press time, we can look forward to student athletes sooner than later becoming in part profit centers for business interests such as sports management companies. The NCAA can no more stand in the way of this development than it can refuse to obey the laws of gravity.

Seth Sandronsky lives and works in Sacramento. He is a journalist and member of the Pacific Media Workers Guild. Email sethsandronsky@gmail.com.

From The Progressive Populist, November 15, 2019

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