Just days after the NCAA lost a crucial legal battle, it may need to pony up some more funds for another one. Governor Gavin Newsom signed the California athletes pay bill and in doing so, set himself up for a possible legal challenge from the NCAA.
The new law, the California Fair Pay to Play Act, doesn’t take effect until 2023. The NCAA likely won’t wait that long to take Newsom to court over it, however.
Why the NCAA urged Newsom not to sign the California athletes pay bill
Before Newsom put pen to paper, the NCAA made its position on the bill clear. In the NCAA’s opinion, it would give its members in the Golden State an unfair advantage.
Because of that, the NCAA stated, it would rule California colleges and universities ineligible for championship events. There are differing opinions on whether the NCAA could do so, however. That could be grounds for the affected institutions to bring an antitrust claim against the NCAA.
The NCAA might be the first to the courthouse, however. This isn’t the first time that state governments have attempted to regulate the NCAA.
In the early 1990s, several states including Nevada tried to force the NCAA to change its policies involving its internal investigations into rules infractions. The NCAA sued then-Nevada governor Bill Miller, arguing the state had no authority to enforce its law because the NCAA was active in multiple states. Federal courts agreed with the NCAA’s interpretation of the dormant commerce clause.
That’s precedent the NCAA is likely to use in a similar argument against Newsom. It may not prove as successful this time around, however, because the circumstances are quite different.
What’s in the new California law regarding college athletes
It’s important to note that the new law does not require California colleges and universities to pay their athletes directly. It also does not apply to community/junior colleges in the state.
The law does, starting in 2023, ban any of the state’s colleges or universities punishing an athlete for receiving compensation for the use of her/his image, name and/or likeness. The NCAA and any athletic conference the colleges/universities belong to would similarly not be able to do the same.
The law does bar athletes from signing endorsement deals that would conflict with similar deals in place with the athletic departments. For instance, an athlete at UCLA would be unable to sign a deal with Nike, as UCLA has an existing contract with Under Armour.
Other than that, athletes in California will be able to profit off their NIL rights. It’s something the NCAA will fight. Their recent track record doesn’t bode well, however.
Recent court losses for the NCAA in multiple states
In a California courtroom earlier this year, the NCAA “lost” Alston v. NCAA. The presiding federal judge ruled that the NCAA is in violation of federal antitrust laws by capping athletes compensation.
Her ruling didn’t actually impact the NCAA’s status quo much, however. That softened the blow for the NCAA but the NCAA appealed the ruling nonetheless.
Another ruling against the NCAA could actually have a bite worse than its bark, however. A group of appellate judges reversed a lower court decision that puts the NCAA and professional leagues like the NFL on the hook for millions of dollars.
If the ruling stands upon possible further appeal, the NCAA is one party that will have to reimburse gaming operators in New Jersey for losses suffered while the NCAA and the leagues fought to enforce the Professional and Amateur Sports Protection Act. That likely decreases the NCAA’s enthusiasm about the Garden State.
The new law in California could represent another loss for the NCAA. The list of states that the NCAA is at odds with seems to be growing.