Why California Will Allow Student Athletes to Sign Endorsement Deals

October 14, 2019 Updated: October 14, 2019

A new law in California allows college athletes to hire agents and make money from endorsement or sponsorship deals, and it could set a precedent for other states to follow.

Last month, the California legislature approved SB-206, the Fair Pay to Play Act, co-authored by State Sen. Nancy Skinner (D-Berkeley) and State Sen. Steven Bradford (D-Gardena). The bill was signed into law by the governor on Sept. 30.

According to a press release issued by Skinner’s office, “SB-206 will give California student athletes the right to their name, image, and likeness, allowing them to earn money from sponsorships, endorsements, and other activities related to their hard work and talent—a right that all other students and California residents have.”

SB-206, which pertains to all student athletes from public and private four-year colleges and universities in California, will take effect in 2023. It forbids those institutions from enforcing NCAA rules that keep student athletes from earning compensation. Students who receive income would still be eligible for scholarships. The law also prohibits student athletes from signing sponsorship deals that conflict with their school’s existing endorsement contracts.

According to Sen. Skinner, “SB-206 brings an end to the exploitation of student athletes by the multibillion-dollar college sports industry, which generates wealth for all involved except the students. SB-206 doesn’t force colleges to pay; it simply opens the door for athletes to earn money just like any other student, whether it’s monetizing YouTube videos, teaching swim lessons, or accepting sponsorships.”

She added, “The fact is, only a very few college athletes get full scholarships, and that’s especially true for female athletes. Under SB 206, women athletes have the chance to market themselves — giving them a shot at breaking through the male-dominated sports industry and raising the profile of women’s sports overall.”

Sen. Steven Bradford, a former athlete and coach who has been a longtime supporter of student athletes, said, “These athletes fill the seats in arenas and stadiums all across this country, and the universities make millions of dollars selling their jerseys, paraphernalia, and likeness; yet they are not justly compensated.”

The NCAA Board of Governors opposed the bill and sent a letter to California Gov. Gavin Newsom saying the law would “wipe out the distinction between college and professional athletics and eliminate the element of fairness that supports all of college sports.”

According to the letter, “The 1,100 schools that make up the NCAA have always, in everything we do, supported a level playing field for all student athletes. This core belief extends to each member college and university in every state across the nation. … California Senate Bill 206 would upend that balance. If the bill becomes law and California’s 58 NCAA schools are compelled to allow an unrestricted name, image and likeness scheme, it would erase the critical distinction between college and professional athletics and, because it gives those schools an unfair recruiting advantage, would result in them eventually being unable to compete in NCAA competitions. These outcomes are untenable and would negatively impact more than 24,000 California student athletes across three divisions.”

The NCAA added that the organization “has consistently stood by its belief that student athletes are students first, and they should not be employees of the university.”

The Fair Pay to Play Act now sets up a clash between the NCAA’s amateurism rules and the laws of a state with more than 20 Division I schools, including four members of the Pac-12 Conference. Representatives of Long Beach State University, Stanford, USC and California public universities voiced opposition to the bill, reported The Desert Sun. The NCAA has warned the bill could make California universities ineligible for national championships.

SB-206 received support from star athletes LeBron James of the Los Angeles Lakers, Draymond Green of the Golden State Warriors, and from numerous female athletes. Labor advocates, civil rights groups and former student athletes also supported the measure.