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Digesting the Fair Pay to Play Act

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Breaking down the new California law that allows college athletes to get paid.

California Gov. Newsom And CA Attorney Gen. Becerra Hold News Conference Responding To Trump Revoking State’s Emissions Waiver Photo by Justin Sullivan/Getty Images

And with a stroke of his pen in front of a handful of former in-state college athletes (and LeBron James), California enacted SB 206, otherwise known as the Fair Pay to Play Act (and, yes, Gavin Newsom had a typo in his tweet).

I’ve spent a little time digesting all of the news and analysis that has percolated around this topic for a few weeks now and I thought it might make sense to get into this debate over here at the UW Dawg Pound.

(By the way, easily the best recap I’ve read on the subject was produced by our colleagues over at Bruins Nation. H/T to Dimitri Dorlis for his great write-up)

SB 206 - in a nutshell.

Here is what we know:

  • the law is specific to the state of California
  • the law allows college athletes to retain legal representation and to engage in contracts that profit from their name, likenesses and media rights
  • the law clarifies that scholarships are not considered compensation
  • the law bans colleges from disciplining athletes who pursue such deals or engage representation
  • the law was passed unanimously by the California General Assembly on September 8th and enacted today, September 30th
  • the law takes effect on January 1, 2023

Here are critical points of clarification about the law:

  • the law does NOT allow any of the 58 state colleges in California to directly compensate its players
  • the law does NOT allow players to enter into arrangements that would violate the terms of any sponsorship or licensing deals that their school has struck with other entities
  • the law does NOT require teams from out of state to meet this same standard with their institutions

Breaking it all down.

I know all too well that the comments section for this article might quickly devolve into a red / blue love fest. With that said, I don’t see a ton of value in revisiting whether or not student athletes deserve to be compensated above and beyond how they are already treated by their universities.

Been there. Debated that.

I’m more interested in diving deep into the implications. Like it or not, the genie is now out of the bottle. The government of California has taken a bold swipe at a change initiative and has dropped the fruits of their labor at doorstep of an academic / athletic / political conglomerate unprepared to receive it. Whether it’s viewed by the beholder as a turd or a treasure is irrelevant. It’s now law.

What does SB 206 mean for the universities in the state of California? How does this affect the foundation of the PAC 12 as a conference? How will the NCAA and other states adapt?

Reaction #1: well, they gotta do something now

While it is true that SB 206 is now law, it is important to note that it is not “enacted law”. The passage of bill by such a populous state will kick off two streams of activities. On one hand, it will initiate several legal challenges designed to put the concept of erasing the line between amateur and professional athletes to the test. On the other, it will force other states, including just about all of those in the PAC 12 footprint, to initiate debate on their own, similar legislation.

California was clever in legislating a three-year window before implementation. That tactic was clearly a catch-up strategy that was meant to move other states, the conferences and the NCAA from a position of “talking about it” to “do something about it”. And it will probably be very effective at doing so. In fact, as of February, the state of Washington has already taken its own baby steps in enacting similar legislation.

I’m not a lawyer and I’m not going to try to break down the legal challenges that this bill might face. However, it strikes me that anybody is harmed as a result of this bill and that there is plenty of precedent for co-mingling professional athletes with amateur sports (the Dream Team, anyone?), it might be very hard to kill this bill altogether. Some aspect of compensating college athletes is going to survive even if SB 206 doesn’t in its current form.

Classic Olympics
Michael Jordan, Magic Johnson and Clyde Drexler all played together as part of the Dream Team in the 1992 Olympic Games.
Photo by Icon Sportswire

The game theory on this is very clear: get on board or suffer the consequences. Even if you HATE the idea of college athletes getting paid, are you willing to bet the future of your own institution by not at least guarding against the possibility that legal challenges will fail? State legislatures already approve crazy money to fund athletic departments and pay coaches. Does anyone really believe that they are going to allow themselves to get caught pants down while other states make progress on their own laws? I think not.

Reaction #2: is it really much different?

SB Nation ran a great piece in 2014 about bagmen in the NCAA. The 10 rules on how to pay college athletes and not get caught ring as true today as they did five years ago.

For those of you still under the fanciful delusion that the most elite athletes are not already profiting on their name and likenesses, I’m afraid that you are about to have your bubbles burst. Money has flowed to college athletes since the early 50’s. Hugh McElhenny, who was paid $10,000 a season in college, once famously proclaimed that he “took a pay cut” when he moved from the University of Washington to the San Francisco 49ers. Technically, he did.

Those practices have continued and modernized. Players today take cash from boosters, well-wishers and, gasp, politicians in order to make their ends meet and to keep them fully focused on the business of winning games and breaking records. But those arrangements are rarely done in the purview of people actually associated with the administration of the program and are not doled out to all athletes equally.

Market forces, namely messieurs supply and demand, rule the black market and determine who will benefit a lot, who will benefit a little and who not at all. Those same economic forces will apply in this new world only it will be done in the light of day.

The funny thing about “light of day” initiatives is that they tend to end black markets altogether. That’s usually a good thing and, in the case of this issue, might be the most significant thing to really change.

Reaction #3: Mark Emmert is full of shit.

Husky fans already knew that little nugget of an insight thanks to the days that Emmert served as the president of the University. But I simply can’t get over this man’s lack of spine on most things related to the NCAA but especially this issue.

In a letter authored by Emmert to California legislators in June, Emmert threatened that California schools might get booted from the NCAA (emphasis mine) should they proceed with the SB 206 effort:

“We recognize all of the efforts that have been undertaken to develop this bill in the context of complex issues related to the current collegiate model that have been the subject of litigation and much national debate. Nonetheless, when contrasted with current NCAA rules, as drafted the bill threatens to alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships. As a result, it likely would have a negative impact on the exact student-athletes it intends to assist.

Ladies and gentlemen, that is a not-so-subtle threat. A non-former public university president may have said it like this:

“Your kids don’t get to play with our kids if you keep this shit up.”

But that threatening tone was somewhat muted in the NCAA’s official response to the signing earlier today.

Two things jump out at me about this tweet. First, the NCAA has moved on from threats and now acknowledge that change is both necessary and inevitable. Second, the focus has now shifted away from just California and on to the all of the other states considering similar laws and the “patchwork of different laws from different states” that “will make unattainable the goal of providing a fair and level playing field”.

What’s Mark Emmert to do? He can’t kick out everyone.

Reaction #4: Relax.

Channeling my best Aaron Rodgers here...

I’m having a hard time getting my panties in a bunch about this. The path forward seems much clearer on this particular topic than it is for subjects such as ... oh, I dunno ... global warming. Or Chinese monetary policy. Or Katie Perry’s latest hairstyle.

While I’m not laying bets on the end state, I’m convinced that there is a path to resolution. College athletics has been living with wealth redistribution among its members for decades. Getting smart people together to figure out how to do so in a way that is legal, transparent and taxable (of course) seems like a task that can get done even in a day and age where a Democrat and a Republican being spotted together having a hot dog at the corner stand is deemed a primary-able offense.

There are people that speculate the PAC 12 might just create its own super-conference of schools from states that pass similar legislation. The logic being that there is such bias against west coast teams (and group of five teams) in the football championship process now that unifying as a separate, independent body with its own championship could be just as lucrative as staying in the NCAA.

I suppose that is possible. And its not like its going to be a huge political jump for states like Washington, Oregon, and Colorado to make the same jump California just did. Even Utah would likely follow suit (although I could see Arizona dropping out in such a scenario). States in the Northeast and upper midwest (Minnesota, Michigan, and Ohio) might also be enticed by such an opportunity. Such a break up of the NCAA could re-regionalize the key sports while at the same time advancing economic opportunities for the member schools.

But, let’s be realistic here. The technical challenges of pulling something like that off - in particular for all of the non-revenue sports - feel overwhelming. And expensive to solve.

The most obvious path forward is the NCAA working with the U.S. Congress to come up with unifying legislation that incorporates the objectives set out in the SB 206 while balancing out the needs of the other states that are serious about passing their own legislation. The only way to make it a fair playing field is to change it in the same way for everybody.

But, let’s be clear on one thing: the change is coming. The clock is ticking. January 2023 will be here before you know it.

Thanks California.