California v. NCAA: College Endorsement Deals


What do Darius Bazley, Lamelo Ball, and MarJon Beauchamp all have in common? They are trailblazers of the new NCAA-defying movement that has seen these top talents forego their year of collegiate eligibility in order to prepare for the NBA outside of the constraints of the strict university system. While the jury is still out on whether this trend is a flash in the pan or the future of NBA development, it is clear that the NCAA is under various pressures to adapt in the new age of player self-determination, the most recent of which, coming from California lawmakers.

This past month, the state Senate and State Assembly unanimously passed the Fair Pay to Play Act that would allow players in the state to profit off of their name, image, and likeness. It is a decisive blow that would severely limit the NCAA’s authority over players at California’s 25 Division I programs. The bill would make it illegal for California schools to take away an athlete’s scholarship or eligibility for accepting endorsement money. The legislation is seeing fierce opposition from the NCAA, spearheaded by president Mark Emmert, who suggested that California universities may be prohibited from participating in NCAA championships in a letter lawmakers. While the bill will not go into effect for three years, California’s vote against NCAA amateurism will undoubtedly have immediate consequences for the association, California colleges, and top high school recruits.

(As a point of clarification, while the proposed bill will allow all college athletes to profit from endorsements, given the disproportionate popularity of college basketball and football to other collegiate sports, this piece will focus on the bill’s impact in these sports as they will likely benefit the most from it.)

As it pertains to four and five-star recruits, they should be smiling ear-to-ear at the possibility of receiving a “pre-professional” endorsement deal. Because football players currently do not have any true avenues to the NFL outside of the NCAA, the most substantial effect of the Fair Pay to Play Act for may be a surge of high school football talent to California universities. Until other states pass similar legislation, it is hard to imagine that a top player with an offer from, say, USC would choose an offer elsewhere over the opportunity to receive an endorsement deal and play for a perennial powerhouse program. The irony in this is that as California football teams improve, they are all the more likely to qualify for a championship game, in which they may not be allowed to participate. Despite this threat, in an age where draft-worthy talents have sat out bowl games to avoid injury concerns, a championship-game ban likely won’t be enough to dissuade prospects from committing to California institutions.

On the other hand, high school basketball phenoms have an ever-expanding array of non-NCAA paths to the NBA draft. Of the aforementioned players skipping college, Bazley famously received a $1 million internship with New Balance, Ball opted to play overseas in a competitive Australian basketball league (NBL), and Beauchamp has enrolled in a 12-month training program with a staff full of renowned former coaches and executives. These blue chip talents, along with others following their lead, are changing the way in which high school players think about the jump to the pros. It is too early to tell just how much their decisions will affect their draft stock, however a recent NBA mock draft has projected both Ball and fellow NCAA-to-NBL defect, RJ Hampton, to be chosen in the top 10.

The allegiance high school basketball superstars once felt to the NCAA is being eroded, which is why this bill could actually help the association. For example, take Lamelo Ball. Even though the 6’6″ point guard has been on record saying that he would have preferred to play college ball, the NCAA stripped Ball of his eligibility after his dad used him to promote Big Baller Brand and hired him an agent. Both of these infractions killed any hopes Ball would have had at a collegiate career, but what if they hadn’t? Let’s say he wanted to follow in his brother’s footsteps and play for UCLA. The fanfare around Ball is undeniable — to the point where the NBL inked a deal with Facebook to stream 52 games that would certainly have gone unwatched by a U.S. audience if the 18 year old were in the NCAA. The impact college superstars have directly benefits the collegiate association as evidenced by the “Zion effect” on ticket prices. So why wouldn’t the NCAA want the insane media coverage that follows the sport’s most prominent athletes?

The short answer is they do, but only on their own terms. Any steps towards player compensation, even from one’s own likeness, is a step closer to colleges paying athletes, which is seeming more like the inevitable future every year. Especially in basketball where other options are constantly emerging, the NCAA is particularly even more threatened by the NBA mulling the abolition of the “one-and-done” rule, which would make the association completely obsolete for the best high school players. In turn, the overall product of NCAA basketball would decline and could force a drastic overhaul of the system to incentivize at least some of the best prospects to choose college over professional and international basketball. It seems as though the California ruling may well be just the first step in a reorganization of the way the NCAA is structured, at the very least in basketball–for now.

With the developing XFL, a pro football league that would run during the NFL’s offseason, it is only a matter of time before football copies the blueprint of NCAA basketball alternatives and offers a more enticing path to the pros than does the NCAA under its shield of scholarships. It seems as though the Fair Pay to Play Act would almost administer a remedy to an already-worsening problem, but the NCAA sees one of its most valuable commodities as its authority over the players. However, even if the organization doesn’t ever want to pay players for the profit they bring, there are several convincing arguments for at least allowing player endorsements.

The most significant is the additional profit it would bring to the NCAA. Yes, part of this agreement would entail revenue sharing with the players, but right now there are two huge markets that would largely benefit both sides. One is jersey sales. It is almost unimaginable that if an Oklahoma Sooners fan wants a Jalen Hurts jersey, the only option available is a blank jersey with the number one on the back — no last name. Currently black markets have filled this gap and one can buy a bootleg jersey for cheap from China, but the opportunity is clear. Iron out a deal with the athletes to use their name, and sell jerseys for massive profit around the country.

The second market would be to revitalize the popular NCAA Football video game franchise that was discontinued in 2013 after a lawsuit ruled against the NCAA in their fight to use the names, image, and likeness of college athletes. Again, a fairly easy solution seems evident: pay the players, make the game, split the revenue. However, there is little indication that the organization seems inclined to do so and would rather ignore the obvious market opportunity.

The last reason is less tangible, but just as meaningful. What if the NCAA took initiative and righted their past wrongs? Crazy, I know, but what if? The opinion fans hold of the NCAA seems to find a new low with every passing season. Just two seasons ago the organization stripped the backup kicker at UCF of his scholarship because he profited from his Youtube channel where he posted trick-shot videos. Next year, will mark the ten-year anniversary of the NCAA vacating beloved USC running back, Reggie Bush, of his Heisman Trophy award for receiving improper benefits from the school. The NCAA has an unfavorable reputation as the tattletale big brother, which has undoubtedly contributed to the budding movement away from collegiate sports.

In any case, the direction of the NCAA as it pertains to collegiate athlete’s endorsement opportunities will be decided in the coming months. It seems likely that California’s legislation will be wrote into law without a say from the NCAA and what comes next is uncertain at best. However, other states are preparing to draft their own versions of a similar bill, which could mean a much bigger fight than the NCAA may be ready for. It appears that the landscape of collegiate sports is in the midst of a stark transition, one that will certainly place more power and financial security in the hands of the athletes that are responsible for its very success.

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Oliver Green

Oliver Green is a J.D Candidate at New York University School of Law and SEO Law Fellow. He is a first-year representative at NYU's Sports Law Association.

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