A law is before California legislators that would give college athletes the same rights to profit from their names, likenesses and images that professional athletes now enjoy. The proposal would violate a central tenet of the National Collegiate Athletic Association (NCAA).
California Senator Nancy Skinner’s “Fair Pay to Play Act,” which passed the California Senate in May by a vote of 31-4, is now before the assembly. The bill would allow college athletes to earn money through endorsements and sponsorships and ban organizations like the NCAA from enforcing policies that don’t allow those payments.
If it passes, it would almost certainly be challenged in court by the NCAA.
The senator stated during the debate on the bill that NCAA rules “disproportionately harm students from low-income families” and are “particularly unfair” to female athletes.
The bill got a major boost when basketball superstar LeBron James last week endorsed it on Twitter: “Everyone in California—call your politicians and tell them to support SB 206! This law is a GAME CHANGER. College athletes can responsibly get paid for what they do and the billions they create.”
Some like Gabe Feldman, director of the Tulane University Sports Law Program, believe the NCAA will have to make accommodations to its rules. He told the San Jose Mercury News, “I think the most likely outcome is that the NCAA modifies its rules to some extent. Whether that’s enough to make California back off, I don’t know. But if I had to guess, I’d say this is likely to lead to some rule changes.”
Line in the Sand
The NCAA’s Board of Governors is digging in its heels and talking tough, insisting it doesn’t intend to make any changes. In May, it appointed a working group headed by Gene Smith, Ohio State University athletic director, and Big East Commissioner Val Ackerman. The group issued a statement saying it didn’t intend to budge on its position that students shouldn’t be paid like professional athletes.
More recently, the group conceded that it’s at least looking at changing some of its rules, although it didn’t spell out which ones or make any members of the group available to speak to the press.
Lawyer Tim Nevius, a former University of Dayton baseball player—who once fought for the NCAA, and now takes legal cases that oppose the organization—agrees with LeBron that the possible adoption of the California bill will be a game-changer that will force the NCAA to make basic changes.
Nevius now runs a college sports law firm, Nevius Legal. In an exclusive interview with Global Gaming Business News, he told how he once worked for the NCAA helping to enforce its rules in high profile cases at various college campus. As a liaison to the Division I Student-Athlete Advisory Committee, he worked with athletes on NCAA legislation and policy considerations.
Nevius left the NCAA after five years and co-founded a college sports practice at Winston & Strawn in New York, where he switched sides and in 2014 led a federal antitrust lawsuit on behalf of Division I athletes to challenge NCAA rules that prohibit compensation in the multibillion-dollar college sports industry. He later started Nevius Legal, which represents college athletes on matters such as transfer waivers, drug testing appeals and navigating NCAA rules.
He helped launch the College Athlete Advocacy Initiative, which fights for college athletes’ rights and campaigns “to combat inequality and exploitation in the multibillion-dollar college sports industry. We unite passionate advocates with current and former athletes and influential figures to fight for fundamental fairness and meaningful reform in college sports.”
“That led me to where I am today,” Nevius said. “Not only being a college athlete but seeing all sides of these issues. There are some extreme inequities and injustice.”
His perspective in enforcement gave him the ability to work on behalf of athletes who have run afoul of those rules.
The No. 1 inequality, he says, is economic. “Where you’re dealing with a $14 billion industry where the labor force can’t share in revenues and can’t capitalize on their own name and likeness. Which is why I support Skinner’s bill.”
He explained, “Everyone likes to talk about ‘pay for play,’ but there are so many other things that need to be corrected. At most basic, representation. They have no representation in a system that’s rife for conflict of interest. Especially conflicts where athletes are caught in the middle and have no representative.”
He told GGB, “They’re promised an education, and NCAA loves to talk about athletes being students first. Yet we’re graduating certain cohorts of athletes at unacceptably low rates. Many of those who do graduate are not prepared for life beyond school, and that’s for a couple of reasons: because they have been told their entire lives that they’re athletes and that is their identity. So they’re being shuffled into majors not of their choosing and taking courses not in line with their career goals—but which don’t conflict with their sports.
“The practice is for them to be absolutely athletes first, and school is a secondary experience.”
Nevius points to U.S. Senator Chris Murphy’s Madness Inc. paper, which, according to the senator’s website: “called on the NCAA to compensate athletes. The report found that across the 65 Power Five conference schools, only 12 percent of all revenue goes toward student aid and scholarships, while 16 percent goes to coaches’ salaries.”
According to Senator Murphy: “The NCAA is broken. I am a big college sports fan, but I think most fans recognize that the NCAA today isn’t acting in the best interest of many student-athletes. College sports has turned into a multibillion-dollar industry where everyone’s getting rich except the students actually doing the work. Frankly, it’s a civil rights issue that no one is talking about. That’s why I’m speaking out.”
Nevius points to the section in the report relating to academics. “He (Murphy) talks about NCAA, about how it measures graduation success. A metric that has no relation. They highlight how NCAA manipulates numbers by excluding those who don’t graduate. Athletes are clustered into a handful of majors that are considered easier academically (i.e. they are less rigorous) and don’t conflict with that. The athletes aren’t given the opportunity to select engineering, or science or math. They’re essentially shuffled into majors that don’t match their academic interests, with friendly professors, less rigorous time commitments and reading requirements.”
Skinner’s bill, says Nevius, “presents an incredible opportunity to correct longstanding economic inequities that exist in the NCAA system. And give the athletes the same opportunity as everyone else in this country, the right to use and profit from their own name and likeness.”
Nevius argues there’s no good reason to deny these rights. “What needs to be made clear is this is not some bill that simply accrues to benefit top athletes who sign a sneaker deal. It applies to all athletes in all sports and all genders to engage in self-employment, in social media and engage in commerce.”
College athletes have been forbidden to profit from YouTube videos or Go Fund Me campaigns to help raise money for injured athletes. “All are examples that the rules don’t apply to music majors or people outside of college. They can’t even sign an autograph for $5,” says Nevius.
Another example is swimmer Katie Ledecky who wanted to raise money to prepare for her Olympic effort next year. “These things should not be incompatible. Skinner’s bill would do exactly that,” he says.
Nevius was an attorney on two cases that challenged the NCAA’s rules, both on antitrust grounds. One of them, O’Bannon v. NCAA was an antitrust case where former UCLA basketball player Ed O’Bannon challenged the NCAA’s use of the images of former student athletes for commercial purposes. It argued that such images should revert to the athletes upon graduation. Although O’Bannon won in the lower courts, NCAA eventually appealed and won.
Nevius declares, “College sports every single year generates billions of dollars and the growth is exponential. In 2003 it was $4 billion dollars and in 2018 it was $14 billion, which is enormous.
“Here’s what I think from a gaming standpoint: You have the vast majority of college athletes living below the poverty line. If you give them the opportunity to earn extra income by utilizing their name and likeness, you will be relieving some of that economic pressure (and) deter them from otherwise engaging in under-the-table dealings with gamblers or bookies. That’s pretty clear. The less incentive you give people to engage in that type of behavior, the better. It affords athletes fundamental economic opportunities that will relieve that pressure.”
Nebraska College of Law Professor Josephine Potuto is skeptical about the ability of a state to enact legislation that affects a national private association—or whether such a law would pass constitutional muster. Potuto is well familiar with the NCAA, having chaired its committee on infractions.
In an interview with GGB News, Potuto said, “There’s a fair amount of law that says a state has a right to legislate about its own citizens but you can have a problem where a statute has extra-territorial effects past its borders.”
One criterion that could disqualify such a law is if it obviously targets a particular association. “No doubt this bill does that,” says Potuto. “Once a state is enacting legislation, if it’s doing it as police power for everyone, that at least is a plank that might not violate overarching federal policy. If the legislation looks to target a national association then it’s more likely to be trying to have an effect beyond its own borders.”
Potuto continued, “It’s doesn’t seem to me that the interest in California is focused on anything beyond the NCAA because it is the big dog of sports associations. The other piece of it is, I don’t think the California legislature is doing it because it wants California athletes not to compete. It’s doing it because it wants to make NCAA change its bylaws.”
Is A Change Coming?
When a university such as UCLA is a member of an association, the majority rules, she said. “If you want to challenge a rule that prevents college athletes from profiting from their name and likeness, you wouldn’t be able to do it in court,” she said. “The university could walk or create a new association. When the state tries to force a national association to change its rules, it’s disintegrative. It destroys the integrity of the association and its rules.”
She cited attempts for many years by different states to regulate the length of trucks that could ride on their highways. “You end up with no ability to have consistent rules or you end up having to move to the rules that are the least common denominator,” she said.
In Potuto’s opinion, it’s legal for a state to adopt a law saying a university can’t belong to an organization with such rules. “But when you have a state that says, ‘I like my policy choice better,’ then you have a conflict. Then the courts intervene. A national association needs to be able to have uniform rules. That becomes more critical when you talk about an association that deals with athletic competition. The Supreme Court has said that the essence of competition is that you have to have agreement. Whether the by-laws are right or wrong, if the national association can’t enforce them because in any state they say, ‘We like something different,’ then you can’t have a national association.”
One strategy the NCAA has used in the past when it disagreed with state laws is to declare those states off-limits to championship games. It did this for the four states that had carve-outs from the former federal ban on sports gaming: Delaware, Oregon, Montana and Nevada. It banned two other states because of their use of Confederate flags.
That’s more of a challenge when dealing with the most populous state in the nation, and at a time in history where the wave appears to be moving towards loosening the rules.