Newsom Signs Bill to Let College Athletes Take Endorsement Deals

SACRAMENTO, Calif. (CN) – In a move that could change amateur sports and is sure to draw legal challenges, California Governor Gavin Newsom signed a bill Monday to allow college athletes to hire agents and make money from endorsement deals.

The first-in-the-nation bill – dubbed the Fair Play to Pay Act – directly challenges regulations by the National Collegiate Athletic Association that bar student athletes from benefiting financially from playing sports in college.

Newsom signed the bill during an episode of UNINTERRUPTED’s The Shop, flanked by professional basketball star LeBron James and other athletes.

The governor said in a statement Monday that the current paradigm gives an unfair advantage to colleges and universities while student athletes take on physical and financial risks.

“Colleges and universities reap billions from these student athletes’ sacrifices and success but block them from earning a single dollar,” Newsom said in the statement. “That’s a bankrupt model – one that puts institutions ahead of the students they are supposed to serve.”

James, who plays for the Los Angeles Lakers and who has been a proponent of SB 206, said in a statement that he left college to go to the NBA to help his mother financially, something he couldn’t have done if he stayed in school.

“I couldn’t have done that in college with the current rules in place,” James said. “This bill will help student athletes who are in a similar situation.”

The NCAA earns an average of $1 billion annually from student athletics while colleges and universities take in around $14 billion per year, according to Newsom’s office.

Bill co-author and state Sen. Nancy Skinner, D-Berkeley, said in a phone conference with reporters that the bill will restore student athletes’ civil rights and will grant young women, including former University of California, Los Angeles, gymnast Katelyn Ohashi, the opportunity to monetize their skill within a limited timeframe.

“By restoring student athletes’ rights, this bill sends a clear message to the NCAA that equity for students must be the overriding value in sports,” Skinner said. “NCAA, the ball is in your court. You now have the opportunity to give rights to all student athletes across the country.”

Ohashi rose to fame this year when her dance gymnastics routine earned her a “perfect 10” score and a video of the routine amassed hundreds of millions of views on social media.

After the bill’s signing on UNITERRUPTED’s The Shop, Ohashi told other panelists she struggles to reconcile her newfound fame with the lack of compensation for her performance.

“People are like, ‘Oh, you must be so rich,’” Ohashi said, adding she tells people they “must not know the NCAA” the way she does.

Skinner said the bill was amended to ensure that universities’ endorsement deals won’t be impacted by or interfere with student athletes’ agreements.

The NCAA said in a statement Monday that the bill unfairly side-steps its rule-making process and will lead to confusion on a national level.

“As more states consider their own specific legislation related to this topic, it is clear that a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field for 1,100 campuses and nearly half a million student-athletes nationwide,” the NCAA said.

The Indiana-based organization has not said if it would bar California schools from participating in its tournaments in response to the bill, which it has called unconstitutional.

Newsom told reporters on the call that he doesn’t believe the NCAA will take such action.

“The bigger problem for the NCAA is public opinion. The public is way ahead of them on this and won’t stand for it any longer,” Newsom said. “The NCAA can’t afford to lose California. The economic consequences would be profound and, further, I don’t think they have a legal right to do that.”

In a statement, the Pacific-12 Conference, which participates in NCAA tournaments, said the bill will lead to the “professionalization of college sports” and will negatively impact how universities recruit student athletes.

Newsom previously signed AB 1518, allowing student athletes to hire an agent without jeopardizing their status on campus, and AB 1573, which bars institutions from retaliating against student athletes who file civil rights complaints.

SB 206 takes effect in 2023.

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