New California Law Allows NCAA Athletes to Be Paid Starting 2023

Governor Newsom called it “a big move to expose the farce and to challenge a system that is outsized in its capacity to push back.”

He was talking about a new law that he had just signed, which will go into effect in 2023. The law will allow athletes with the National Collegiate Athletic Association (NCAA) to sign endorsement deals. This contradicts the NCAA’s long-held position that college athletes should be strictly amateur and receive nothing but a college degree for their play.

Yet just last year, the college sports industry itself made at least $14 billion. The athletes say that this money is earned purely from their efforts.

If you’re considering accepting an athletic scholarship or have a child who may be, you should consider the difference it might make to go to school in California.

That said, although this law applies only in California, the state is not alone in considering changing the NCAA rules. Several states and Congress are looking into the issue. Even the NCAA itself recognizes a need for some kind of change.

The NCAA firmly believes it is the party best suited to determine what change is needed. That is partly because its guidelines are enforced at some 1,200 campuses across the nation. While California may be the nation’s most populous state, it doesn’t have a monopoly on high-quality colleges.

The PAC-12 conference includes four universities in California, but it sided with the NCAA. It worries that allowing endorsements and other monetization of college athletics would “lead to the professionalism of college sports and many unintended consequences.” The University of California, USC and Stanford also lobbied against the law.

The NCAA calls California’s new law “unconstitutional” and the conference could decide to declare California colleges and universities ineligible to compete in NCAA tournaments. If it did, that could cost some universities $100 million a year in tournament money and advertising.

Will California’s Law Put Pressure on the NCAA or Other States?

According to the New York Times, the law works pretty simply. With few exceptions, it would prohibit the NCAA or educational institutions from keeping students from participating in a sport simply because they have received money for the use of their name, image or likeness. Students will also be able to hire agents, which is currently restricted.

The reality is, California’s population gives it a great deal of leverage. Indeed, the NCAA announced last May that it has set up a committee to consider changes to the endorsement rules. That committee’s report is due this month – but Newsom says the state decided to pass the new law without waiting for the NCAA’s official position.

“People said, ‘You know what, we’ve got to force their hands,’” Newsom told the Times. “They’re not going to do the right thing on their own. They only do the right thing when they’re sued or they’re forced to do the right thing.”

However, the law leaves open the opportunity for changes once the NCAA releases its proposal.

Nevertheless, it is expected to face substantial legal challenges before going into effect.

The NCAA was once considered a great way to pay for an education and gain exposure for a possible pro career. When students can hardly afford to live, much less contribute to their family budgets, the system isn’t working. California’s new law may be necessary to push the NCAA in a more reasonable direction.