Fair Pay to Play Act: A Game Changer for California College Athletes

The landscape of college sports has undergone a seismic shift with the introduction of name, image, and likeness (NIL) rights for student-athletes. 

California has been at the forefront of this change, thanks to the Fair Pay to Play Act (California Senate Bill 206), which went into effect on September 1, 2021. We aim to provide a comprehensive legal overview of the Fair Pay to Play Act here – and how it has affected student-athletes in California’s universities and colleges.

What Is the Fair Pay to Play Act?

The Fair Pay to Play Act is a California piece of legislation that aims to put an end to the long-running debate on whether collegiate athletes should receive compensation or have the option to make money from endorsements.

With the exception of scholarships, players have historically been prohibited by The National Collegiate Athletic Association (NCAA) from profiting from their name, image, or likeness while participating in college sports. According to the NCAA, their “Never Pay to Play” policy was intended to maintain the amateur status of college sports and protect student-athletes from exploitation by universities and corporations.

The restriction, however, drew sharp criticism and sparked debates about its fairness, considering college sports programs generate billions of dollars in revenue annually from their athletes’ successes and sacrifices.

With the coming to law of the Fair Pay to Play Act, which was supported by many sports celebrities, including four-time NBA champion LeBron James, California college athletes can now earn from their NIL by endorsing products, signing autographs, participating in various commercial ventures, etc. 

California became the first U.S. state to provide their collegiate athletes the legal right to compensation for the business use of their identities in 2019 – and 20+ states, including Texas, Arizona, Florida, New Mexico, and Alabama, have followed their lead.

What Are the Key Provisions and Limitations of the Fair Pay to Play Act?

  • Name, Image, and Likeness, Rights

The Fair Pay and Play Act’s key accomplishment is that it affords student-athletes the same freedoms that other college students, non-student athletes, professional athletes, or regular Americans enjoy when it comes to monetizing their personal brands.

As an illustration, before the law’s implementation, a student athlete’s non-sports-playing classmates could start a YouTube channel, grow their audience, and generate revenue from them, but the athlete was not allowed to use any social media platforms to market and make money off of their name, image, and likeness.

They now have the legal right, like many others, to profit financially from their athletic prowess.

  • Scholarship Eligibility

The NCAA and universities are barred from punishing student-athletes who make use of their NIL to enter into endorsement agreements with businesses, launch their own ventures, charge for autographs and appearances, etc.

Therefore, athletes may engage in business dealings without worrying that their scholarship will be revoked or they won’t be eligible for one — or that their NIL activities will disqualify them from competing in sports.

  • Agent Representation

The Fair Pay to Play Act permits collegiate athletes to work with licensed agents, a practice previously outlawed by the NCAA, to help them land endorsement and sponsorship deals. They can also hire legal counsel for advice on negotiating the most favorable NIL contract terms and to guarantee that they comply with every relevant college sports regulation.

However, the law makes it illegal for agents to lend money to athletes, give them presents, or use their influence to sway athletes’ choices.

Additionally, it forbids colleges and the NCAA from punishing student-athletes who exercise their legal right to retain the services of a sports agent or attorney.

  • No Conflict

A section of the California Senate Bill 206 states “A student-athlete shall not enter into a contract providing compensation to the athlete for use of the athlete’’ name, image, or likeness if a provision of the contract is in conflict with a provision of the athlete’s team contract.”

This provision can limit the brands that players may affiliate with. For instance, a college student-athlete can’t sign a deal with Coca-Cola or Nike if their team already has a contract with Pepsi or Adidas that obligates them to promote those companies’ products.

As a result, the law dictates that athletes inform their respective schools of any potential NIL contracts before signing them, primarily to prevent conflicts of interest.

An important thing to highlight is that the Fair Pay to Play Act is silent regarding the types of endorsements California university athletes may accept. NIL laws in southern U.S. states like Texas contain provisions that forbid athletes from partnering with corporations in the cigarettes, alcohol, gambling and firearms industries.

Get the Best Legal Representation in California for Your NIL Contracts

Are you a collegiate athlete or a relative of a student-athlete interested in learning more about the Fair Pay to Play Act?

Call Gallagher Krich APC at (858) 926-5797 or fill out our online contact form, and we’ll be glad to provide more information on this ground-breaking piece of legislation and outline how you may use it to protect your financial future and that of your family. When negotiating and reviewing NIL contracts, it’s essential to have a skilled law firm on your side.

If you have any sponsorship or endorsement deals lined up, Gallagher Krich, APC, would also be happy to help you with your NIL contractor negotiations.

Our attorneys have more than 30 years of experience in contract law and have assisted hundreds of people and companies in securing the best possible terms for their contracts — giving them peace of mind that their rights and interests are well taken care of.

If you choose to work with us, we’ll also make sure your NIL contracts address all the crucial points, leaving no room for exploitation or ambiguity, including:

  • The scope of use for your intellectual property (name, image, and likeness)
  • Term and termination
  • Compensation structure
  • Governing law
  • Compliance with the Fair Pay to Play Act

At Gallagher Krich, APC, we recognize that NIL contracts can be confusing and complex. That’s why we provide a free consultation to go over your particular requirements and address any concerns you may have.

Get in touch with us today to arrange your no-obligation consultation to discover how we can champion your rights and interests in the world of college athletics with solid NIL contracts. We look forward to hearing from you!

Latest News & Updates

Meet Our San Diego Attorneys

Thomas F. Gallagher, Esq.

Partner

(858) 926-5797
tom [at] tomgallagherlaw.com

Troy B. Krich, Esq.

Partner

(858) 926-5797
troy [at] tomgallagherlaw.com

Contact Gallagher Krich, APC

What Clients Say:

Mike K., Google

Rated 5.0 out of 5
August 11, 2023

Thank you so much for all your help in resolving a real estate matter so quickly and efficiently.

Mike K
Verified

What Clients Say:

Jonas Y., Google

Rated 5.0 out of 5
December 28, 2022

If you need a “ Closer”, go see Troy. Troy has been one of the best attorneys I have ever worked with. I don’t typically give reviews but after the last case Troy helped me settle out of court, I won’t hesitate to use Troy again! Thanks for all you do Troy !

Jonas Y
Verified

What Clients Say:

Daniel E., Google

Rated 5.0 out of 5
October 11, 2022

I left a voicemail for Tom late Sunday evening and received a phone call first thing the next morning.

Tom was very quick to reply to any questions I had, and if he was caught up in a meeting, he was sure to return my call promptly.

Tom provided sound and logical advice, during a very stressful and uncertain time. At times I asked him to be more aggressive and was often met with the pros and cons of that decision, allowing me to understand the approach and thought process behind his strategy.

Ultimately he provided options for several paths for us to take, worked swiftly, and got us where we needed to be.

He reached out several times to check on my sanity and make sure I was good.

As someone with very high expectations, I would highly recommend his services. He provided expertise that proved to be successful, and also took the time to make sure I was emotionally solid.

Tom assisted with me with a 50% / 50% ownership conflict.

Daniel E
Verified

What Clients Say:

Deanna, LawConnect.com

Rated 5.0 out of 5
February 23, 2022

Really informative and actionable, very grateful to have connected and I look forward to working more with them in the future.

Deanna
Verified

What Clients Say:

Marilyn, LawConnect.com

Rated 5.0 out of 5
February 8, 2022

i liked that a lawyer, and not a staff member, called me to get the details and he gave me his opinion of what his initial thoughts are about my case.

Marilyn
Verified

What Clients Say:

Bob W., Google

Rated 5.0 out of 5
August 30, 2021

What was thought to be a simple breach of contract turned into a nightmare. Through their tenacity and their deep knowledge of the law, we were successful. There is no reason to look any further as you will not get any better representation than this firm. I highly recommend them and strongly suggest that if you are considering starting a business or are already managing one, this firm will guide you, avoiding the troubled waters businesses sometimes find themselves in.

Bob W
Verified

What Clients Say:

Rasmita M., Google

Rated 5.0 out of 5
August 13, 2021

Johnny Nitti helped us with our estate plan. He was very meticulous while drafting the plan and spent enough time to explain the details to us. He filed the deed with county recorder and paid for the fees himself. Overall, Johnny did a great job and we definitely plan to work with him in the future for any updates to our EP.

Rasmita M
Verified

What Clients Say:

George A., Google

Rated 5.0 out of 5
August 7, 2021

Johnny Nitti helped me with my estate planning (will, living trust, etc.) and made the process smooth. He is very responsive and organized. I highly recommend contacting Johnny.

George A
Verified

What Clients Say:

Ashley C., Google

Rated 5.0 out of 5
July 18, 2020

Tom Gallagher is very knowledgeable and helpful when it comes to business law. I reached out to him reguarding the Pandemic and my salon and I’m so glad I did. Many times stress and hard times can fog clarity and he really helped me understand the laws.

Thanks Tom!!!

Ashley C
Verified

What Clients Say:

Evan D., Google

Rated 5.0 out of 5
July 16, 2019

Thank you Troy for everything! Professional, prompt, and smooth handling of my case. I will be recommending to anyone that is in need of a lawyer.

Evan D
Verified