Gov. Newsom Signs Law to Let College Athletes Profit From Endorsements

SACRAMENTO — Defying the NCAA, California opened the way Monday for college athletes to hire agents and make money from endorsement deals with sneaker companies, soft drink makers and other sponsors, just like the pros.

The first-in-the-nation law, signed by Democratic Gov. Gavin Newsom and set to take effect in 2023, could upend amateur sports in the U.S. and trigger a legal challenge.

Newsom and others cast it as an attempt to bring more fairness to big-money college athletics and let players share in the wealth they create for their schools. Critics have long complained that schools are getting rich off the backs of athletes — often, black athletes struggling to get by financially.

“Other college students with a talent, whether it be literature, music or technological innovation, can monetize their skill and hard work,” he said. “Student-athletes, however, are prohibited from being compensated while their respective colleges and universities make millions, often at great risk to athletes’ health, academics and professional careers.”

He predicted other states will introduce similar legislation. Two lawmakers in South Carolina have already announced plans to do so.

The NCAA, which had asked the governor to veto the bill, responded by saying it will consider its “next steps.” It did not elaborate.

The NCAA, which has 1,100 member schools and claims nearly a half-million athletes, said it is working to “make adjustments to NCAA name, image and likeness rules that are both realistic in modern society and tied to higher education.” But it said any such changes should be made at a national level through the NCAA, not through a patchwork of state laws.

California’s law applies to students at both public and private universities in the state and covers all sports, though the big money to be made is in football and basketball.

It bars schools from kicking athletes off the team if they get paid. It does not apply to community colleges and prohibits athletes from accepting endorsement deals that conflict with their schools’ existing contracts.

The law represents another instance of California jumping out in front of other states and positioning itself in the vanguard of change. The movement to allow student-athletes to profit from their labors on the court or the playing field has been simmering for years, portrayed as a matter of economic fairness and civil rights.

Newsom tweeted a video showing him signing the law during a special episode of HBO’s “The Shop: Uninterrupted” alongside NBA superstar LeBron James, one of a number of professional athletes who have endorsed the measure.

James, whose 14-year-old son is a closely watched basketball prospect in Los Angeles and will be 18 when the law takes effect, exulted over its signing on Instagram, saying it will “change the lives for countless athletes who deserve it!”

He added: “NCAA, you got the next move. We can solve this for everyone!”

Before the governor signed it, the NCAA warned that the law would give California universities an unfair recruiting advantage, which could prompt the association to bar them from competition. Powerhouses like the University of Southern California, UCLA, Stanford and UC Berkeley could find themselves banned.

If California schools are drummed out of college sports’ governing body, they could form a new organization, since membership in the NCAA is voluntary.

But the governor said he doubts the NCAA will kick California schools out, because the economic consequences to the organization would be profound. “They can’t afford to do that,” he said.

State Sen. Nancy Skinner, D-Berkeley, the bill’s author, said it rights a longtime wrong: “For decades, college sports has generated billions for all involved except the very people most responsible for creating the wealth. That’s wrong.”

But the Pac-12 Conference, which includes the four powerhouse California schools, warned that the law “will lead to the professionalization of college sports and many unintended consequences related to this professionalism.”

It said that the measure could affect how California schools compete nationally, reduce opportunities for student-athletes in Olympic sports and harm female competitors.

“All reforms must treat our student-athletes as students pursuing an education, and not as professional athletes,” the conference said.

The new law does not go so far as to allow colleges and universities to pay athletes directly for their play.

The NCAA has steadfastly refused to pay players in most cases. But a committee led by Ohio State Athletic Director Gene Smith and Big East Commissioner Val Ackerman is studying other ways players could make money. Its report is expected in October.

The NCAA does let some athletes accept money in some instances. Tennis players can accept up to $10,000 in prize money per year, and Olympians can accept winnings from their competitions.

Also, many schools pay players yearly cost-of-living stipends of $2,000 to $4,000.

The NCAA reported $1.1 billion in revenue in 2017.