California Gov. Gavin Newsom has signed into law the Fair Pay to Play Act, which says colleges in California cannot punish their athletes for collecting endorsement money. This will make California the first state to allow student athletes to profit off their name, image, and likeness.
Advocates of the new law say Newsom’s approval marks the most significant step in a decades-long battle to create new compensation options for NCAA student-athletes. The law, which is scheduled to go into effect in January 2023, does not require schools to pay athletes directly as employees. Instead, it makes it illegal for schools to prevent an athlete from earning money by selling the rights to his or her name, image or likeness to outside bidders.
The law also allows for college athletes to hire a licensed agent to represent them. The bill was amended several times, including a recent provision that prevents athletes from signing endorsement deals that conflict with their team’s sponsors. For example, a basketball player could not wear Nike products during team events if he or she plays for a school that is sponsored by Under Armour.
Current NCAA rules do not allow players to accept any compensation related to their status as a college athlete from outside sources. The organization’s board of governors and its president, Mark Emmert, both sent letters to California lawmakers earlier this year asking them not to pass the bill. Emmert called the bill an “existential threat” to the college sports model in a recent interview with CBS Sports.