Free-market reform can come from the most unlikely places. California has passed a law that on January 1, 2023, will prohibit its colleges and universities from upholding “any rule, requirement, standard, or other limitation that prevents a student of that institution participating in intercollegiate athletics from earning compensation as a result of the use of the student’s name, image, or likeness.” This provision directly conflicts with current NCAA regulations regarding athlete compensation.
In plain English, it means that in California, a college athlete won’t receive a salary from his school, but he can star in a local commercial or make royalties from the sale of merchandise featuring his name. He can hire an agent. He’ll be treated — for the first time — like virtually any other student at the school. He won’t have his off-campus earning power artificially limited by NCAA eligibility rules.
California’s law is fundamentally just. Presently, the NCAA runs a multi-billion-dollar monopoly that not only refuses to compensate its most important workers fairly but has created a labyrinth of regulations that often treat athletes substantially worse than their student peers. And those regulations often fall on athletes who have far fewer financial resources than do students who enjoy economic opportunity without collegiate restraint.
The result is a perverse, often corrupt system where staggering sums of money flow to virtually everyone except the athletes who often lay their bodies on the line in front of stadiums full of adoring fans and an immense national-television audience. And no, their free education is not fair compensation for many of these athletes. Doubt me? Lift the earnings regulations and watch their income explode.
Sure, life won’t change substantially for many university athletes. I’m not sure if there’s much endorsement money available for, say, the fourth-ranked player on the college tennis team. But California’s rules could be a boon for other athletes, especially those college stars who do not go pro (i.e., most college stars) and for their families.
Colleges should maintain academic eligibility rules. Coaches will continue to exercise immense control over an athlete’s time. (The practice and travel commitments for college athletes can render their sports careers a full-time job.) But athletes still have spare hours in a week, and if they want to use them to help a local businessman to sell cars or mattresses, why should the NCAA stop that economic activity?
I’m fully aware that athletes at big programs will make more money. But does anyone think that the big programs don’t already enjoy an extraordinary structural advantage? When was the last time the college-football playoff didn’t feature either Alabama or Clemson? There are hundreds of athletes at other schools who can and will enjoy at least some economic benefit from a revised rule, and for some families that additional check may well help a mom make her rent payment on time.
As the statute’s deadline looms, expect litigation. The law attempts to avoid the game of chicken by purporting to regulate both California colleges and the NCAA. It tries to ban the NCAA from implementing its eligibility rules. But while California has a strong legal claim to regulating its own schools, it has a much weaker claim to regulating the internal eligibility rules of a private, out-of-state association. A court may find that California schools are forced to comply with California law, but also that the NCAA is still free to impose its policies.
A game of chicken is underway. Unless something changes between now and the effective date of the California statute, the NCAA will likely face a choice — change its policies or exclude every university in the nation’s most populous state. For perspective, that would mean no more March Madness for UCLA — the college-basketball program with the most titles in NCAA history. That would gut the Pac-12, as Stanford, Cal, USC, and UCLA would be forced to defy state law or drop out of the conference.
In theory, the NCAA can perhaps take the hit. (That’s one reason why California universities have opposed the law.) It can wipe the California schools from the board and roll forward with a 49-state basketball tournament and a 49-state football tournament. Sure, ratings and revenue would take a hit, but the NCAA can gamble that the cost to California would be greater, that the looming loss of revenue and prestige would cause the state to reverse course, to repeal or delay the law rather than face a future with empty stadiums and an NCAA-sized hole in the budget.
That may well be the outcome — if California stands alone. But now is the time for other legislatures to act. If a state such as Florida enacted California’s free-market reform, then the NCAA would be shaken to its foundation. Add a few additional SEC or Big Ten states to the mix, and the NCAA would have no choice but to cave. A decades-long injustice may finally be corrected. Will any other state follow California’s lead?