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Governor signs bill for student-athletes to receive compensation for likeness

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The Fair Pay to Play Act, which would make it illegal to preclude a university from competing if its student-athletes receive compensation for their name, image or likeness, was signed into law by California Governor Gavin Newsom in an episode of LeBron James’ HBO show “The Shop” on Monday. The newly signed Senate Bill 206 (SB 206) would also prohibit universities from rescinding athletes’ scholarships if they seek compensation or professional representation, which the bill authorizes. 

Even if it survives potentially impending court challenges, the Fair Pay to Play Act would not come into effect until Jan. 1, 2023, when today’s Stanford freshmen are expected to be seniors. 

“Collegiate student athletes put everything on the line — their physical health, future career prospects and years of their lives to compete,” Newsom said in a statement. “Colleges reap billions from these student-athletes’ sacrifices and success but, in the same breath, block them from earning a single dollar. That’s a bankrupt model — one that puts institutions ahead of the students they are supposed to serve. It needs to be disrupted.”

In March, Stanford Athletic Director Bernard Muir sent a statement to the Senate Education Committee opposing SB 206, citing “challenges for higher education institutions” due to compensation and the bill’s conflict with NCAA bylaws 12.1.2 and 12.5.2.1 that could “jeopardize the ability of a team to compete.” 

Further concerns about a team’s ability to compete stemmed from NCAA president Mark Emmert’s threat to the California legislature that universities may be barred from postseason play. 

“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,” Emmert wrote in a letter to the chairs of two State Assembly committees. “As a result, it likely would have a negative impact on the exact student-athletes it intends to assist.”

In doing so, the NCAA would ban, among other California universities and colleges, the most successful intercollegiate athletic department in the nation — Stanford Athletics — the 25-time Learfield Sports Directors’ Cup winners. The University released a statement on Monday in response to the signing of the bill.

“Stanford supports the goal of advancing the well-being of college student-athletes, including reform that provides student-athletes with greater flexibility regarding the use of their name, image and likeness,” the statement reads. “However, we believe true progress can only be achieved when it is undertaken at the national level, with appropriate safeguards against unintended consequences.”

All other athletic department inquiries by The Daily were referred to the same University statement.

“We stand ready to work with the NCAA, the Pac-12 Conference, California officials and others to move toward reform that supports our student-athletes and ensures that California schools and student-athletes will continue to compete and thrive in national collegiate athletics,” Stanford’s statement continues.

The NCAA acknowledged that changes to the status quo are necessary, but wantS the steps to occur under the NCAA process. In May, Emmert and the NCAA Board of Governors appointed a working group to “examine issues highlighted in recently proposed federal and state legislation related to student-athlete name, image and likeness.”

“Unfortunately, this new law already is creating confusion for current and future student-athletes, coaches, administrators and campuses, and not just in California,” the membership organization stated in its comment.

The majority of Stanford’s athletics programs play within the Pac-12 conference, which took the same position as the NCAA at large.

“The Pac-12 is disappointed in the passage of SB 206 and believes it will have very significant, negative consequences for our student-athletes and broader universities in California,” the conference’s statement said. “This legislation will lead to the professionalization of college sports … and have a negative disparate impact on female student-athletes.”

Stanford economics professor emeritus Roger Noll has been involved in the effort to pass a bill like SB 206 for nearly 20 years, when an advisee of his, Jason White, testified before the state legislature about a similar bill. White was the named plaintiff in White v. NCAA, another antitrust case that was settled with an agreement to increase compensation and benefits for athletes.

“The act is limited in scope to athletes’ earning endorsement and endorsement money separately from the licensing activities of the college,” Noll wrote in an email to The Daily. “The act actually prohibits colleges from paying their athletes for the use of their names, images and licenses, and in that sense would have been in conflict with the initial decision in O’Bannon, which allowed schools to pay athletes up to $5,000 per year for licensing rights.”

Noll does not expect the bill ever to go into effect, due to changes the NCAA adopts after their study group reports the outcome of the pending appeal in Jenkins v. NCAA, and the states, such as South Carolina and New York, in which legislators plan to introduce similar bills.

Hayley Hodson ’19, a former All-American women’s volleyball player at Stanford, believes that allowing college athletes to seek endorsements would help alleviate the gender pay gap in sports. For many female athletes, college is the last opportunity they will have to showcase and profit from their talents. 

“Female athletes who are the best in their sports statistically have fewer professional athletic opportunities after college as their male counterparts and would benefit greatly from being able to market themselves during college,” Hodson said. 

After winning the Pac-12, American Volleyball Coaches Association, and “Volleyball Magazine” Freshman of the Year accolades, Hodson missed almost her entire sophomore season after a third concussion suffered in practice. Post-concussive syndrome, shin splints and severe clinical depression caused her to medically retire from the sport in 2017, but she was still active in her support of SB 206, for which she testified.

“We have the power to change history for the better and this bill is just the first step in correcting injustices long enacted upon college athletes,” Hodson said in a statement released by the NCPA after the bill’s passage.

Ramogi Huga, a former UCLA football player, founded the National College Players Association (NCPA) in 2001. Since then, the organization has allowed athletes to receive merit-based scholarships, developed and assisted antitrust lawsuits, eliminated the NCAA’s scholarship duration limit and co-sponsored The Student-Athletes’ Bill of Rights.

“For those of us like Ramogi and me, who have been working on issues like this since the 1990s, it’s wonderful to see the tide of public opinion turn towards athletes’ rights and away from the doubletalk and doom-saying of the NCAA and its members,” said Andy Schwarz ’89. “Today’s signing opens a door, and now it’s up to all of us to charge through that door and fight for full equality under the law for college athletes.”

The bill was introduced by California Senators Nancy Skinner (D-13) and Steven Bradford (D-35). 

“Signing SB 206 makes California the first state to restore to student athletes a right everyone else has: the right to earn money from their name, image and likeness,” Skinner said in a statement released by the NCPA.

“While our student-athletes struggle to get by with basic necessities such as food and clothing, Universities and the NCAA make millions off of their talent and labor,” Bradford said in a statement released by the NCPA. “SB 206 addresses this civil rights issue of today, which is about fairness and equity. Our colleges and universities should no longer treat student athletes as chattel, but as the valued individuals they are.”

LeBron James hosted Newsom’s signing on his athlete empowerment brand UNINTERRUPTED’s The Shop. In addition to James, UNINTERRUPTED co-founder Maverick Carter, James’ agent Rich Paul, WNBA legend Diana Taurasi, former UCLA basketball player Ed O’Bannon and former UCLA gymnast Katelyn Ohashi sat down for the monumental moment.

“This is a game changer for student-athletes and for equity in sports,” James said. “Athletes at every level deserve to be empowered and to be fairly compensated for their work, especially in a system where so many are profiting off of their talents. Part of the reason I went to the NBA was to get my mom out of the situation she was in. I couldn’t have done that in college with the current rules in place. This bill will help students athletes who are in a similar situation.”

James was joined in his support of the bill by fellow NBA stars Draymond Green and Kevin Durant.

“The NCAA is a dictatorship,” Green said today in the Golden State Warriors introductory press conference. Green played college basketball at Michigan State for four seasons before declaring for the draft.

“As a former college athlete, that’s exciting,” Green said. “When you spend so much time at college broke. No money and yet everybody else was living very well. The university is making a ton of money off your likeness.”

Contact Daniel Martinez-Krams at danielmk ‘at’ stanford.edu.

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Daniel Martinez-Krams '22 is a staff writer in the sports section covering football, women's soccer, women's basketball and baseball. He is originally from Berkeley, California. Contact him at danielmk ‘at’ stanford.edu.