Tag: NCAA

2021 Preview: Litigation

In this second installment of previewing 2021, I take a look at some of the compelling storylines to follow in the world of sports litigation. As trials now occur virtually, several ongoing disputes are expected to reach resolutions this year, including a six year-old lawsuit against the National Collegiate Athletic Association (NCAA), which will fundamentally rearrange the way college athletes are “defined” and compensated. Let’s take a look at what is on the docket to be decided this year.

NCAA v. Alston
For fans of EA Sports’ NCAA Football, the dream of the beloved video game making a comeback has become a reality following a surprise announcement last week. O’Bannon v. NCAA, a class action lawsuit against the NCAA, Collegiate Licensing Company, and video game publisher Electronic Arts, brought an end to the game franchise in 2014 when college players sued over the unauthorized use of their name, image, and likeness (NIL). A $60 million settlement ended the dispute — and with it — any NIL-related profit opportunities for college players, such as broadcast rights and merchandising. Rather than simply license NIL rights with college athletes, all profiting parties were forced to abandon these lucrative areas of college sports, stemming from the NCAA regulations prohibiting athletes receiving outside compensation. This concept had become known as amateurism. Amateurism has prevented college athletes from profiting from their NIL.

This is just a snippet of the NCAA’s long battle against its athletes and their authority over NIL rights, however a new chapter may be on the horizon. The relevant lawsuit, NCAA v. Alston, is a years-old case that will be making its way to the Supreme Court. Following the Ninth Circuit’s decision in favor of the plaintiffs, the NCAA’s petition for certiorari was granted, meaning the Supreme Court will hear the case and make a final ruling. If the Supreme Court affirms the Ninth Circuit’s judgment, the NCAA rules restricting education-related pay and benefits for college athletes will be stricken down. However, if the Supreme Court goes a different route, a win for the NCAA may essentially grant antitrust immunity to the organization, which would allow it generous latitude in terms of what changes — if any — the NCAA would make to its current compensation structure. The debate over amateurism will take place on March 31st, and regardless of outcome, will have permanent, far-reaching consequences for the future of college sports.

Jeffery Kessler, head attorney at Winston Strawn LLP, will be arguing on behalf of Alston and college athletes as a whole, while the NCAA and its athletic conferences will be represented by a plethora of law firms.

Bryant v. Island Express Helicopters Inc.
Little more than a year ago, the helicopter carrying Kobe Bryant, his daughter Gianna, and seven other passengers crashed, tragically resulting in the deaths of everyone on board. Many of the details are well-known at this point: despite traveling the same route to a girl’s basketball tournament 24 hours earlier, pilot Ara Zobayan became disoriented in the heavy fog that hung over the Calabasas hillside that day and misperceived the helicopter’s final plunge, apparently believing that they were climbing to four-thousand feet shortly before impact. However, what still remains to be determined is the outcome of the litigation against Island Express, Zobayan’s employer and the owner of the helicopter.

Vanessa Bryant, the widow of the Lakers’ legend, brought suit against the helicopter company and Zobayan on twenty-eight counts alleging negligence resulting in the wrongful deaths of the passengers. Island Express attempted to cross-claim the Federal Aviation Administration, alleging that the air traffic controllers had negligently handled a shift change that occurred during the flight, according to Law360. Both Bryant and the federal government have filed a motion to dismiss, which — if granted — would remand the case from federal court to Los Angeles Superior Court, where Bryant is more likely to find a favorable verdict if the case goes to trial. However, both sides must first await the investigation results of the National Transportation Safety Board (NTSB). These findings will determine if the crash was due to a mechanical failure or human error, as previously suspected. The NTSB is expected to announce the release of its report tomorrow on Tuesday, February 9th via livestream.

Vanessa Bryant is represented by Munger, Tolles & Olsen LLP and Robb & Robb LLC. Island Express is represented by Cunningham Swaim LLP and Worthe Hanson & Worthe. The federal government is represented by the U.S. Attorney’s Office for the Central District of California and U.S. Department of Justice

Senne v. Office of the Commissioner of Baseball
The Minor League (MiLB) system of Major League Baseball (MLB) has been a lightning rod of controversy over the past year following the MLB’s decision to cut the number of minor league teams from 162 to 120 — or one affiliate per MLB team for each of the four “levels” of MiLB. Commissioner Rob Manfred has faced backlash from minor league team executives and Congress alike. However, it seems that the MLB’s “120 Plan” not-so-coincidentally comes at a time where the league awaits a verdict on a class action lawsuit that would make the operation of the Minors Leagues exponentially more expensive. Enter Senne v. Royals.

Seven years ago, former minor leaguer Aaron Senne filed a lawsuit against the Kansas City Royals. The litigation has since expanded to include thousands of players — past and present — who are alleging that they have received unlawfully low wages from MLB for their services. These claims include zero compensation for spring training as well as its fall counterpart, both of which are reportedly “strongly implied” to be mandatory. Further, some players even claim to have made as little as $1,100 per month during the five-month regular season, which, assuming a minimum forty-hour workweek, would make their hourly wage $6.875. Of course, this figure falls well below the $7.25 federal minimum wage; however the MLB may already be shielded from this apparent discrepancy.

Hidden on page 1,967 (of 2,232 total) of Congress’s 2018 $1.3 trillion spending bill, the “Save America’s Pastime Act” essentially exempts minor league players from the protections of the Fair Labor Standards Act (FLSA). This legislation meant that minor league players could no longer receive overtime, nor payment for spring training, rendering minor leaguers “seasonal employees” by default. There are many other considerations that fill out this complicated picture, but in short, the MLB’s lobbying for these provisions may signal that the MLB is not expecting the court to rule in its favor. Hence, why eliminating 42 teams – or roughly one-thousand players – will mitigate some of the blow the MLB will face if it loses this case.

The MLB petitioned the Supreme Court to reject the class action on the basis that the claims lacked commonality; however the land’s highest court declined to hear the case. Therefore, the lawsuit will proceed in the Ninth Circuit where Judge Joseph C. Spero has tentatively scheduled a trial for June 2022. However, allowing such an expensive (and contentious) lawsuit to reach trial may threaten the MLB’s most valuable commodity: its antitrust exemption. While a settlement appears unlikely, all eyes are on the league as it prepares for its next move.

The minor league class is represented by law firms Korein Tillery LLC and Pearson, Simon & Warshaw, LLP. MLB is represented by Elise Bloom of Proskauer Rose LLP.

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Dueling Lawsuits Between Zion Williamson and His Former Agent May Implicate Duke, Krzyzewski, Nike

Boxed-Out

Despite the pandemic, the world of sports law continues to run the headlines and claimed former Duke star Zion Williamson as its latest victim this week. In new information obtained by The Athletic, it was found that Williamson’s ex-marketing agent filed a lawsuit against last year’s #1 overall pick claiming over $200 million in potential damages.

After declaring for the NBA draft, Williamson signed a five-year contract with Prime Sports Marketing on April 20, 2019. The contract language stated that Gina Ford, the PSM president, would represent Williamson and handle all endorsement negotiations. However, Williamson later broke this contract, electing to sign with Creative Artists Agency (CAA), and sued both Prime Sports as well as Ford. His team asserted that the contract was never enforceable because the agency did not follow North Carolina’s agent guidelines nor warn Williamson about potential eligibility issues.

The following week Ford and Prime Sports countersued on the grounds that Williamson “willfully and knowingly” breached the contract and that the North Carolina Uniform Athlete Agent Act does not apply because he had already declared for the NBA draft with no intention of returning to Duke.

Full Court Press

Despite the fact that these lawsuits were filed more than a year ago, the contents of some documents were just recently made public and could have some highly damaging ramifications for both Williamson and Duke basketball coach Mike Krzyzewski. Ford’s attorneys put forth a Request For Admission, asking that Williamson admit to certain claims made by Ford and her team. The full set of interrogatories can be found here, but the major implication is that Williamson received improper benefits while at Duke and potentially entangles Krzyzewski and CAA in what could start to look like another recruiting scandal.

While Williamson is not required to answer these allegations, the procedure sets up depositions which will undoubtedly include at least the former Blue Devil and could involve the likes of Krzyzewski as well as representatives from CAA, Nike, Adidas and potentially others.

Show Me The Money

So how exactly did Ford and her team arrive at the $200 million + figure that has been reported? Well, as mentioned, the contract signed by Williamson was for five years and awarded Ford a 15% commission on endorsement deals. Therefore, the number cited in the lawsuit represents 15% of the total amount Ford estimates she would have negotiated for Williamson over the life of the deal — $1.3 billion.

As crazy as that number may seem, it’s certainly not impossible to imagine. In the one month alone that Ford represented Williamson, she negotiated deals with Mercedes-Benz, EA Sports, 2K Sports, Burger King, Puma amongst many more. Though no deals were struck at that time, the impressive list of potential clients speaks to the extensive interest major brands had in partnering with this generational talent. Of course in turn, it speaks to the vast amount of money that Ford could have earned through commission.

However, those deals and the subsequent money instead went to CAA which negotiated the largest rookie sneaker deal with Nike’s Jordan Brand for seven years, $75 million. The agency also sealed deals with Gatorade, Mountain Dew, Panini, and 2K Sports though the terms of those agreements are not public.

Location, Location, Location

Though the basics of this case are fairly straightforward, the way in which it will play out is anything but. Beyond just the coronavirus courtroom complications, the largest wrench in these proceedings is the location in which both competing lawsuits were filed.

Team Zion

For Williamson, his biggest advantage resides in the fact that he sued Ford first, and in North Carolina. In such, Williamson’s attorneys kept the ball in their court by controlling the state and consequently the legal system under which the case will be ruled.

This locational aspect of the legal battle is crucial because each state operates under its own Athlete Agent Act (AAA). The language and interpretation of the AAA is essentially what the argument that Williamson breached the contract rests upon. North Carolina’s version has very strict definitions for what constitutes an athlete, agent, an agency contract, etc. This framework is what Williamson’s team is working within to establish that the contract he initially signed is unenforceable.

The argument is that Williamson was unethically manipulated into signing a contract with Ford on account that she met with Williamson’s parents while he was still in college. If true, this would constitute “indirect contact,” which, under North Carolina’s AAA, would nullify the terms of the agreed-upon contract, thereby exonerating Williamson.

Team Ford

As for Ford’s lawsuit, her team took the liberty of filing in Florida which operates under a very different AAA. It is undeniable that Williamson breached the contract, however the legitimacy of the contract’s initial signing is up for debate, which Florida’s AAA will determine. While this location benefits Ford’s attorneys, timing has not been on their side. Williamson’s team appealed the lawsuit and the closure of the courtrooms due to coronavirus have impeded any progress her side had hoped to achieve by this point.

Moreover, given that Williamson filed first, Ford is at a disadvantage in that her team must wait until the conclusion of that lawsuit before appealing in the event that her team loses. She also maintains that Williamson was never “manipulated”, rather that he signed both willingly and voluntarily. One of Ford’s attorneys wrote, “Williamson is an adult male of high intelligence with exceptional business acumen. He is acutely cognizant of his value as a basketball superstar and of his branding, marketability and earning potential.”

Postgame Analysis

Because both sides unsuccessfully attempted to have the other’s case thrown out, each lawsuit will proceed in its respective state. In a vacuum, the way the contract should have been written would have included an arbitration clause, in which case, this information would have likely been kept private. However, the potential endings for this dispute include everything from a quick settlement to a full-scale trial.

The language of each state’s AAA contains enough ambiguity that effective litigation will play a crucial role in hashing out the interpretation of the above issues. It is likely that when the North Carolina-based lawsuit does eventually play out it will favor Williamson given the state’s AAA structure. However, it is equally as likely that Ford’s lawsuit in Florida’s system will yield a positive result for her and her team.

Given the complexity of this case and the wide-ranging possibilities of its conclusion, a “fight-to the death,” so to speak, would probably be a zero-sum game. Beyond just lawyer’s fees, which will quickly run up the expenses on both sides, it is hard to imagine Williamson, Duke, Nike and whomever else may be involved allowing this story to drag out in the headlines. Expect this case, like many other litigations, to end in a quiet, albeit Zion Williamson-size settlement.

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NCAA Publishes Proposal For Name, Image, & Likeness Rights

Blurred Lines

The NCAA has shifted its stance on college athlete compensation and is restructuring collegiate sports to allow Division I student-athletes to earn money from endorsements and sponsorship deals as early as 2021. However, while this landmark consideration seems to indicate a step forward for college athlete rights, there are already signs that limitations potentially exist on the NCAA’s ability to ensure that this plan is effectively introduced.

The NCAA Board of Governors met on Monday and Tuesday last week to review recommended rule changes that would allow its athletes to profit off of their names, images and likeness (NIL).

Bubble Watch

Among the proposed rule adjustments, some changes made the cut while other rumored additions were left out. As established, the NCAA would allow collegiate athletes to profit from NIL. However, the recommendations did not include any specific procedures for doing so. What is known however, is that the NCAA hopes to establish a system that does not favor a particular individual, school or conference. In turn, the multi-billion dollar organization is calling on Congress to help standardize this emerging niche in college sports across all states.

Another omission involved the absence of group licensing, which means that the rumors of a return of EA’s popular video game NCAA Football are dead, for now at least. The NCAA stated that group licensing is “unworkable” given that there is no players association-type body to bargain on the players’ behalf. More so, group licensing could even open the door for players to classify themselves as employees of the NCAA, which would deteriorate the “amateurism” shield that has protected the association from employee designations.

Last 4 In, First 4 Out

Below is a quick run down of how athletes can and cannot be paid.

In:

–  Third party endorsements such as promoting a product or service through advertisement

– Social media influencing, i.e., Twitter, Instagram, TikTok, Facebook etc.

– Own work products and/or business, i.e., podcasts, Youtube videos, video game streaming, athletic lessons, etc.

– Personal promotion such as autograph signings, meet and greets, etc.

Out:

– Use of intellectual property from schools or conferences in endorsements

– Endorsement payments made from schools or conferences

– Facilitation of endorsements from schools or conferences

– Endorsement payments and/or booster payments as compensation for participation in collegiate athletics

“Back in my day…”

NIL rights fly in the face of the organization’s “amateurism” designation. NCAA.org features an entire page on amateurism and the organization requires all participating DI and DII athletes to be amateurism-certified before competing. The concept of amateurism dates all the way back to the NCAA’s 1906 inception. While the institution has done a remarkable job legitimizing and codifying amateurism in professional-grade sport, that foundation may face a potential threat.

Blue-chip high school basketball prospects have somewhat forced the NCAA’s hand. Over the course of the last year, the NCAA has witnessed some top-tier talent go to non-college program alternatives. The projected #1 overall pick in the 2020 draft, Lamelo Ball, elected to play overseas in Australia this past season, while the 23rd overall selection in the 2019 draft, Darius Bazley, took on a $1 million internship with New Balance. However, everything truly changed when the NBA G-League launched its professional pathway program at the end of 2018, which provided NBA prospects with a more “conventional” alternative to skill development than the aforementioned options.

The program has seen its popularity take off in recent weeks, welcoming three of the top 20 high school recruits in the country, who would have otherwise played for college programs. Jalen Green (#1) was reportedly considering Auburn and Memphis before announcing his G League decision. Meanwhile, Isaiah Todd (#14) and Daishen Nix (#20) spurned commitments to Michigan and UCLA respectively for the pathway alternative.

Moreover, others are expected to follow and for good reason – the program pays prospects $125,000 (at a minimum, top prospects like Green can make up to $1 million) and offers prospects a full scholarship to Arizona State University, which partnered with the program. However, these only outline the explicit benefits. Prospects who elect for this program (or any NCAA alternative) can already receive endorsement deals, market their own image, amongst other NIL rights, which the NCAA is currently working to introduce next season.

Sudden Death

The NCAA is on the clock and may consider instituting these changes even sooner or run the risk of losing other top high school prospects. Further, other states are already looking to follow the footsteps of California and Florida, which have already passed their own laws permitting NIL rights. The first of those agreements (Florida) goes into effect July of 2021 and will not wait for the NCAA. The consequences of having different systems of NIL compensation in place at different times across all 50 states are certain to be wide-reaching, but at a minimum will create vast disparities in compensation. For example, if Florida is indeed the first to implement its bill, it is reasonable to expect a surge of high school talent to Florida’s Division I schools, which would tip the competitive balance in the NCAA.

There are endless considerations for the NCAA to take into account as it moves forward. It looks as though Congress will have its hands full until 2021 between dealing with the pandemic the fact that it is an election year. For those reasons, the NCAA may largely be on its own in finding an equitable solution to implement NIL rights in all 50 states. As for now however, the ball is in the NCAA’s court.

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Pricey Pandemic Insurance Policy Sets Wimbledon Up For $141 Million Payout

While the rest of the sports world is sustaining huge losses, one organization is well positioned to navigate through the global recession. The AELTC (All English Lawn Tennis & Croquet Club) is the association responsible for hosting and operating the prestigious Wimbledon Championships that were set to take place this June. And while COVID-19 is causing most leagues to scramble to find any salvageable solutions, Wimbledon has had the “luxury” of simply cancelling the tournament, and recouping $141 million in the process.

Despite the fact that Wimbledon was projected to generate more than $300 million in revenue this year, the roughly $150 million loss they will see as a result of the pandemic pales in comparison to those of other major leagues and events. Forbes estimated that the NCAA will see damages of $1 billion, the NBA – $1.2 billion, and the MLB (whose season had not yet even started) – as much as $2 billion. These numbers are all based around an assumption that the leagues will resume sometime over the summer, but given the uncertainty it is possible — even likely — that the true figures will be much higher.

So, how exactly did Wimbledon “ace” its handling of the coronavirus chaos? The story reportedly traces back to 2003, the year in which SARS rattled the world and brought pandemic preparedness to the forefront of international dialogue. Though SARS didn’t uproot the sports world like COVID-19 is doing now, the AELTC understood the potential of a global spread and updated its insurance policy to cover an infectious disease clause. That amendment didn’t come cheap however; it cost the AELTC a whopping $2 million per year to protect its premier event from what most others considered a once-in-a-lifetime fluke that wouldn’t repeat itself.

Until it did.

17 years and $34 million later, AELTC is seeing the worst case scenario (in the sports world, at least) unfold, but its directors can rest easy knowing Wimbledon is covered and well-poised for a 2021 return. The policy is exactly why AELTC didn’t need to postpone or reschedule Wimbledon, in fact, the London-based club reportedly had to cancel by a certain date in order to recoup the insurance premium.

Meanwhile, other leagues and major events are trying to brainstorm any possibility to soften the financial blow each one is facing. Even if the NBA returns late in the summer and skips straight to playoffs, or the MLB’s “quarantine league” comes to fruition, these events will undoubtedly be held without crowds and the leagues will still suffer substantially this year. So, a question many are likely wondering is: why didn’t these organizations have any protections on their events like the AELTC did with Wimbledon? The short answer is that they actually did, just to a limited extent.

Most contracts include force majeure clauses, which excuses certain contractual obligations due to a “superior force”. These forces consist of circumstances that are largely out of both parties’ control such as natural disasters, acts of terrorism or say, a global pandemic like the novel coronavirus. However, while sporting organizations can invoke the force majeure clause, the primary benefit in doing so would derive from these organizations’ ability to withhold pay for missed games.

Accordingly, this contract language (if enforced) only really protects these companies from the costs to their thousands of employees, rather than safeguarding them from losses to the revenue, highlighting the true value of AELTC’s insurance. However, at this point, the money these leagues could save by invoking force majeure is far outweighed by the revenue that any semblance of a season would drive, even if it means fan-less events. The reality is, if leagues are going to see any sort of monetary light at the end of this coronavirus tunnel, the government will likely be the one shining it.

In a summary published by lawyers from White & Case, they believe that governments will be willing to provide financial support to prop up the sports industry as it looks to restart itself. Given both the economic and social impact of sports, the government has a vested interest in doing so, however the report warns to expect some form of lengthy litigation in leagues’ pursuit of federal compensation. In any event, whatever kickback AELTC receives down the line will be icing on Wimbledon’s well-insured cake.

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Projected #1 Overall Pick James Wiseman Ends Lawsuit Against the NCAA

wiseman

The complex legal battle between James Wiseman and the NCAA drew to a close last week when the projected #1 overall pick withdrew his lawsuit, however the central dispute, that of Wiseman’s playing eligibility, remains at large. The withdrawal has come on the hopes that the freshman center will be reinstated to #13 ranked Memphis shortly by the NCAA.

The lawsuit stems from 2017 when Memphis coach Penny Hardaway was still the coach of Memphis East High School and sought to recruit Wiseman, at that time a high school junior. Wiseman and his mother had been living in Nashville and to ease the burden of relocating to Memphis, Hardaway provided $11,500 in moving expenses. However Hardaway, a University of Memphis alum himself, donated $1 million in 2008 as a booster, so his assistance to the Wiseman family was deemed as an “impermissible benefit” given his current status as the coach of Memphis and in turn, James Wiseman. According to NCAA rules, boosters are not permitted, “to provide gifts or reduced-cost services to a prospect,” so the violation rendered Wiseman ineligible. However, much of what has caused the controversy is the indecisive nature of the NCAA’s judgments in what has been a case without much precedent.

The NCAA initially ruled the no. 1 high school recruit eligible in late May, however two weeks into the season, said Wiseman was “likely ineligible” due to Hardaway’s payment to the family. Accordingly, the 7’1″ center hired lawyers from Ballin, Ballin & Fishman and Farese, Farese & Farese to gear up for the legal battle over his eligibility. Wiseman then received a temporary restraining order against the NCAA and while Memphis decided to play the freshman for two games, this exemption was short-lived as Memphis observed the NCAA’s stance on Wiseman’s eligibility and ruled him ineligible.

Since, Wiseman’s legal team has dropped his lawsuit, though it remains hopeful that the University of Memphis and the NCAA will reach an agreement expeditiously. Although Wiseman himself is not able to comment on the situation, the two firms released a statement in which they expressed the hindrance the lawsuit represented in reaching a resolution. While it seems that the two sides have a clear, vested interest in Wiseman’s reinstatement — Memphis wanting its no. 1 prospect back, and the NCAA wanting viewership for the projected #1 overall NBA pick — it appears as though the 18 year-old talent will receive a multi-game suspension.

There has never been a case in which a booster has given a high school prospect an “impermissible benefit” and has later become the coach of said prospect. The closest comparison to Wiseman’s dilemma is that of former BYU basketball player, Nick Emery. Emery accepted $12,000 from a booster and subsequently received a nine game suspension for the violation. Early reports indicate that Wiseman figures to receive a similar punishment once Memphis and the NCAA reach an agreement. If the NCAA issues the same nine-game suspension that Emery received, Wiseman would be eligible for reinstatement after December 21st, assuming the NCAA counts the two games that Memphis already. However, I would imagine that the suspension will end up being a bit shorter due to Wiseman’s celebrity and the complexity of the initial violation.

Now that the lawsuit has been dropped, Memphis and the NCAA can negotiate the resolution of the freshman’s eligibility. Given the excitement around Wiseman and Memphis’ potential this season, it is hard to see the league’s vision in handing down a heavy suspension on the university’s prized prospect. In fact, I believe any severe penalty enforced in this case ought to be directed toward the university and/or Coach Hardaway himself given the culpability they might have been expected to anticipate due to the circumstances around his hiring. The commercial impact of prior #1 overall projected picks is undeniable, just look at ticket prices for Zion Williamson’s Duke games from a season ago. Yes, the NCAA aims to establish a precedent and make an example out of future high school coach-top prospect duos in the future, but more than anything, should want the publicity and profit that accompanies the best talents in college basketball. It is reasonable to expect an official ruling on Wiseman’s eligibility in the coming days from the NCAA and if the organization is looking out for itself and its fans, then Wiseman should hope to back on the court before the December 21 timetable.

Update (11/20): The NCAA has decided to suspend Wiseman for 12 games (11 additional after the one that he already sat out) and he will be eligible to return on January 12 against South Florida. Moreover, the NCAA has stated that Wiseman must donate $11,500, the original amount given to him as moving expenses, to a charity of his choice.

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California v. NCAA: College Endorsement Deals

pjimage

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.

Oliver GreenLeave a comment