Kobritz: NCAA threatens California legislature
BEYOND THE LINES
To get what it wants, the NCAA resorts to threats and intimidation.
In May, the NCAA appointed a working group to review its position on name, image and likeness (NIL) benefits for athletes. Currently, the association refuses to share revenue from such rights and prohibits athletes from receiving benefits directly from third parties.
The motivation for appointing a committee was apprehension over proposed federal and state legislation. The California State Assembly is considering a bill that would prohibit schools from paying athletes directly for NIL rights but would allow them to receive compensation from outside sources. In addition to allowing athletes to receive compensation for NIL rights, the proposed legislation prohibits the NCAA from banning a university if its athletes receive compensation for those rights.
If the Assembly approves the bill – it passed in the State Senate by a 31-4 vote - it would not take effect until 2023. That would give the NCAA three full years to implement new rules. On the federal level, Rep. Mark Walker (R-N.C.) introduced a bill in March that has more serious implications to the NCAA than the California legislation. If passed by Congress, the bill would strip the NCAA of its tax-exempt status if it prohibits athletes from profiting from their NIL rights.
Rather than waiting to see if the NCAA needed to deal with a new world order, President Mark Emmert, went on the offensive. He sent a threatening letter to the chairs of two State Assembly committees suggesting if the bill becomes law, California schools could be prohibited from participating in NCAA championships.
NIL rights have been a thorn in the NCAA’s side since 2014 when former collegiate athletes Sam Keller and Ed O’Bannon won antitrust suits centered on video game usage of their NIL rights. Rather than give the players a cut of the millions in licensing fees it received, the NCAA elected to stop licensing video games altogether, a vindictive and petulant response that benefitted no one.
Not surprisingly, Emmert received support for his letter from the California State University System, whose members are also members of the NCAA and subject to the archaic and abusive rules of the association. Individual schools, including the University of California, also oppose the bill, fearful of the NCAA’s response if it becomes law. If the NCAA follows through on its threats, the California State Senate estimated CSUS schools could lose $15 million in championship revenue and be fined as much as $5.2 million.
But those results are highly unlikely. Any retribution by the NCAA would not sit well with its media partners – especially ESPN, CBS and TBS – potentially leading to lower rights fees. If those partners elected to take legal action, the NCAA could lose its stranglehold on college championships, including March Madness, its largest single funding source.
The obvious conclusion to be drawn from Emmert’s letter is he’s bluffing. The California State Assembly should ignore his threats and pass the bill that would finally give athletes a share of their hard-earned image rights.
Jordan Kobritz is a non-practicing attorney and CPA, former Minor League Baseball team owner and current investor in MiLB teams. He is a professor in the Sport Management Department at SUNY Cortland and maintains the blog, sportsbeyondthelines.com. The opinions contained in this column are the author’s. Kobritz can be reached by email at email@example.com.