NCAA Adds, Then Modifies, Certification Requirements for Agents

By Doriyon C. Glass on

In 2018, in response to a federal investigation into alleged corruption, the NCAA established the Commission on College Basketball to fully examine critical aspects of Division I men’s basketball.

Among its recommendations, the Commission said student-athletes should be permitted to declare for the NBA draft but maintain their college eligibility if not drafted. This rule modification would replace the draconian rule that required student-athletes to remove their names from consideration for the NBA draft within 10 days of participating in the NBA combine or lose their remaining NCAA eligibility.

The Commission also recommended that student-athletes be permitted to receive “meaningful assessments of their professional prospects earlier” with the assistance of NCAA-certified agents.

In line with the recommendations, in August 2018, the NCAA announced a series of rule changes allowing male student-athletes to declare for the draft then return to college basketball if not drafted, as well as allowing them to be represented by National Basketball Players Association (NBPA) and NCAA certified agents.

The process and criteria for NCAA agent certification was not yet established, therefore, NBPA-certified agents were permitted to represent these athletes in the 2019 draft. The NCAA noted that the agents were required to become NCAA-certified no later than August 1, 2020.

However, on August 5, 2019, the NCAA launched its Agent Certification System and issued a memo to NBPA-certified agents explaining that they must become NCAA-certified to represent male athletes who wish to maintain their college eligibility. Available only through September 30, 2019, the NCAA certification was in addition to the NBPA certification program and accordingly has its own requirements.

Initially, to be eligible to become an NCAA-certified agent, candidates were required to meet the following criteria:

  • Have a bachelor’s degree or are currently certified and in good standing with the NBPA;
  • Have NBPA certification for a minimum of three consecutive years;
  • Maintain professional liability insurance;
  • Complete the NCAA qualification exam; and
  • Pay the required fees ($250 application fee and $1,250 annual certification fee).

Following the announcement of these criteria, the NCAA faced immediate criticism, especially in relation to the first requirement — led by LeBron James and his reference to the NCAA rule requiring a bachelor’s degree for NCAA certification as the “Rich Paul Rule,” after his agent who does not have a bachelor’s degree. The NCAA amended its rule within a week, noting that it had been “made aware of several current agents who have appropriately represented former student-athletes in their professional quest and whom the National Basketball Players Association has granted waivers of its bachelor’s degree requirement.”

Although the bachelor’s degree requirements received most of the attention, agents also voiced concerns about requiring three years of NBPA certification as a basis for the NCAA certification. The NCAA did not make any amendments to this requirement and there is only one exception to the three-year NBPA certification requirement. The exception applies only to agents who represented a student-athlete in the 2019 draft who subsequently returned to college. They may continue to represent that same student-athlete, even if they have not been NBPA-certified for three years, so long as they meet all other requirements.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor developments in the NCAA-certified agent rule. Please feel free to reach out to a member of the Group with any questions regarding the certification process or its requirements.

 

 

 

 

Will Student-Athletes on F-1 Visas be Affected by the Fair Pay to Play Act ?

By Gregg E. Clifton and Amy L. Peck on

The Fair Pay to Play Act, California SB 206, would allow college-level student-athletes in California to market their name, image, and likeness without affecting their amateur status. How may the new law, which is in the final phases of approval, affect international student-athletes?

Foreign students enter the United States on F-1 student visas. The terms of this type of visa drastically restrict the ability of each individual to earn money while studying in the United States as an international student.

The F-1 visa is a non-immigrant student visa that allows foreign-born individuals to pursue academic studies in the United States. International students must meet the following criteria in order to qualify:

  • The student must be enrolled in an “academic educational program”
  • The specific school must be approved by the Student and Exchange Visitors Program, which is administered by Immigration & Customs Enforcement
  • The student must be enrolled as a full-time student at the proposed school
  • The student must be proficient in English or enrolled in courses leading to English proficiency
  • The student must have sufficient funds to be able to support themselves during the entire length of their proposed course of study and stay in the United States.
  • The student must maintain a residence abroad that the student has no intention of abandoning
  • The F-1 student cannot work, except in specific circumstances regulated under federal law

The terms of the F-1 visa restrict the student from working off-campus during their first academic year.

F-1 students may engage only in three types of off-campus employment: Curricular Practical Training, Optional Practical Training, and Science, Technology, Engineering, and Mathematics Optional Practical Training Extension. All off-campus employment for F-1 students must be related to their area of study and authorized by the Designated School Official before starting any work. An F-1 visa does not authorize any other type of work activity and clearly does not authorize international student-athletes to enter into endorsement agreements to secure remuneration for their name, image, and likeness.

In fact, an international student found to have been working illegally while on an F-1 visa is deemed to have committed a serious violation of the regulations and could result in the student being deported.

The proposed California legislation authorizes student-athletes at all 24 California public and private colleges and universities to market their name, image, and likeness and restricts the ability of the NCAA to prevent student-athletes from participating in any such marketing opportunities.

SB 206 fails to address the predicament of the international student-athlete.

How will the hundreds of international student-athletes participating on California colleges and universities teams benefit from the new legislation? Will the California legislature address this apparent loophole that would restrict an international student-athlete from benefiting from the value of their name, image, and likeness before the bill can be signed into law by Governor Gavin Newsom?

Jackson Lewis’ Collegiate and Professional Sports Practice Group is prepared to counsel colleges and universities on any of the issues that may arise if the SB 206 becomes law. The Practice Group will continue to monitor the status of this proposed legislation and similar legislation that has been introduced around the country. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

MLB Appears Ready To Dive into Uniform Patch Advertising

By Doriyon C. Glass and Gregg E. Clifton on

After observing the success of the NBA’s uniform patch program, Major League Baseball appears ready to utilize similar uniform advertising.

According to MLB’s Executive and Vice President of Business and Sales Noah Garden, the MLB is considering advertising patches for players’ uniforms. Although the patches cover only a small portion of uniform space (approximately 6.25 square inches), they have been profitable for the NBA.

The NBA’s three-year pilot program to sell a corporate logo space on game day jerseys began in 2017. The program was estimated to be worth about $100 million a year. It has generated more than $150 million thus far. The NBA considers the program “an overwhelming success” and predicts new deals and renewals to be even more profitable (potentially, 20%-30% increase). Currently, NBA team deals range from $5 million to $20 million annually. The Boston Celtics, for example, was able to secure a deal worth more than $7 million with General Electric. The Golden State Warriors and Rakuten, a Japanese technology company, have a $20-million deal.

Although MLB’s Garden describes the patches on MLB jerseys as “inevitable,” he also notes that “there are lots of things to take into consideration.” This make sense, as it took the NBA more than three years to sort out the details of its program. MLB will have to work out the aesthetics (size and placement) and economics, as well as a revenue-sharing formula and exposure opportunities.

While MLB plays almost double the number of games played by the NBA, there is less movement in baseball allowing potentially more views of a patch. However, most of the value of the NBA patch is not coming from television views. Around 75% of the value of the NBA patch comes for content shared digitally and on social media. Therefore, Lebron James’ 43.2 million Twitter followers as compared to Mike Trout’s 2.6 million followers may be a necessary consideration in valuing the cost of uniform advertising for MLB.

Other considerations may include whether all teams will participate in the program and what types of advertisements will be permitted. Some MLB licensees predict “resistance from MLB’s richest and most tradition-bound teams” (the Yankees, Red Sox, and Cubs may not jump at this opportunity). As of March 2019, all 30 NBA teams participate in patch advertising.

The MLB likely will have to follow the NBA’s lead in at least one of its advertisement prohibitions. The NBA prohibits advertisements by competitors of Nike, which provides the NBA’s uniforms and will provide the MLB’s uniforms beginning next year. The NBA also prohibits advertisements from companies promoting liquor, tobacco, gambling, media concerns, and political ads.

One of the largest concerns for MLB players is how the revenue generated from a patch program would benefit them. The players would have to approve the patches and related terms as part of the collective bargaining agreement between the 30 Major League Clubs and the Major League Baseball Players Association. The current agreement will remain in effect until December 1, 2021.

This gives the MLB some time to iron out all the details of a patch program, but is it enough time? MLB Senior Vice President Jim Small stated,

“[E]ach sports league has a unique set of circumstances, so there is not a one-size-fits-all approach.”

 

 

Sports Venues and the Americans with Disabilities Act

By Ryan C. Chapoteau and Gregg E. Clifton on

Throughout the country, sports teams and their venues have been hit with an uptick of public accommodation lawsuits under Title III of the Americans with Disabilities Act (ADA), along with its state and local counterparts. The ability to obtain attorney’s fees makes these cases attractive to plaintiffs’ firms.

Plaintiffs include fans, who team up with firms to travel around facilities or sign onto websites to “test” ADA compliance, and others who felt aggrieved after attending an event.

The claims range from not removing physical barriers to access, restricting fans with dietary restrictions from bringing outside food, forbidding service animals to enter, as well as operating websites that are inaccessible to those who are visually impaired or blind.

Title III of the ADA was passed in 1990. It provides that “[n]o individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” 42 U.S.C. § 12182(a). The law has requires sports teams to make reasonable modifications to policies, practices, and procedures to make their goods and services available to people with disabilities. Plaintiffs argue that this applies to physical locations as well as commerce-driven websites despite differing court rulings.

While some companies opt to settle claims early to avoid the cost of litigation, others are taking a hard stance and defending their ADA compliance in court. For example, this past June, in Nevarez v. Forty Niners Football Co. LLC, No. 5:16-cv-07013 (N.D. Cal.), the San Francisco 49ers moved for the court to deny the plaintiffs’ claims and declare that the team’s stadium complies with all federal and state public accommodation laws. The plaintiffs include a class of wheelchair-bound fans and their family members who assist them. They allege the property does not comply with accessibility standards for wheelchair use in and around the stadium.

The lawsuit seeks to correct hundreds of supposed claims including, for example, barriers between satellite parking lots and the stadium, a lack of accessible seating at all price levels, restrictions to disabled and non-disabled groups purchasing tickets together, and physical obstacles within the stadium. Along with requesting the defendants to make repairs, the plaintiffs are seeking statutory damages and attorneys’ fees.

The defendants argue that certain parking lot accessibility issues have already been corrected and the remaining allegations do not violate disability laws.

If the case proceeds to trial, it will be interesting to see how a jury rules, as the court has already decided that it will review only a sampling of barriers to determine whether the stadium met accessibility standards.

This case is only one recent reminder of the ongoing Title III disability-related litigation, generally occurring in California, Florida, and New York. There does not appear to be an end of these claims in sight. Sports leagues, teams, and stadium operators should consider reviewing their policies and websites with counsel before being hit with litigation.

Senate Bill Proposes Equal Pay for U.S. Women’s Soccer Team

By Carmen F. Francella III and Gregg E. Clifton on

A bill to prevent any federal funding for the 2026 men’s World Cup until the U.S. Soccer Federation agrees to provide equal pay to the U.S. women’s and men’s national teams was introduced by Senator Joe Manchin (D-W.Va.) on July 9, 2019. Manchin’s bill comes just a few days after the U.S. women’s team swept its way to a second straight World Cup championship with a 2-0 victory over the Netherlands.

The bill withholds all federal funding for 2026 men’s World Cup preparations, including any and all funds provided to host cities; participating local and state organizations; the U.S. Soccer Federation, Confederation of North, Central American and Caribbean Association Football (CONCACAF), and Fédération Internationale de Football Association (FIFA). Federal funds will be necessary for the tournament, such as when host cities ask for financial aid to provide proper infrastructure and security.

“I’m introducing legislation that will require the U.S. Soccer Federation to pay the men’s and women’s national soccer teams equitably before any federal funds may be used for the 2026 World Cup. The clear unequitable pay between the U.S. men’s and women’s soccer teams is unacceptable and I’m glad the U.S. Women’s Soccer Team latest victory is causing public outcry,” Manchin said in a statement. He added,

“They are the best in the world and deserve to be paid accordingly.”

The U.S. women’s team never trailed during the tournament and defeated the second, third, and fourth place teams on its way to the title. That big win, however, was also prefaced by major controversy.

In March, 28 members of the U.S. women’s team filed a lawsuit against the U.S. Soccer Federation accusing U.S. Soccer of “institutionalized gender discrimination,” a violation of the Equal Pay Act and the Civil Rights Act. In their lawsuit, the U.S women’s team alleges they receive far less money than the U.S. men’s team despite producing superior results.

More than 50 members of Congress have written to the U.S. Soccer Federation demanding to know why, despite all their success, players on the U.S. women’s team are still receiving inferior wages, working conditions, and investment. The U.S. women’s team earns less base pay from the U.S. Soccer Federation and makes less from their World Cup success, despite generating more revenue than the U.S. men’s team.

The 28 players and the U.S. Soccer Federation agreed to mediation in June, a sign their dispute could be headed toward a resolution. U.S. Soccer, which denied the claims, cited the collective bargaining agreement the women’s national team players signed in 2017, which is substantially different than the one U.S. Soccer has with the men’s national team.

 

Proposed New Jersey Legislation Would Bar Discrimination Based on Hairstyle

By Gregg E. Clifton on

A bill (NJ A-5564) introduced in the New Jersey Senate and Assembly would amend the state’s Law Against Discrimination to broaden the definition of “race” to provide greater protection for individual hairstyles and prohibit hair discrimination in the workplace, housing, and schools.

The amendment would protect “traits historically associated with race, including, but not limited to, hair texture, hair type, and protective hairstyles.” The term “protective hairstyles” includes braids, locks, twists, and Afros. State Senator Sandra Cunningham, the bill’s primary sponsor, said,

“Everybody has the right to decide what they want to look like and how they want to present themselves.”

The legislative action was in reaction to a New Jersey wrestler from Buena Regional High School agreeing to cut his hair immediately prior to his scheduled competition in order to avoid forfeiting his match. Andrew Johnson, a high school junior, was given 90 seconds by wrestling official Alan Maloney to cut his hair or forfeit the match. Maloney relied upon high school wrestling rules mandating a legally sanctioned hair covering. He claimed Johnson’s hair covering did not meet appropriate wrestling standards.

Johnson yielded to the threatened disqualification, cutting his dreadlocks in the gymnasium while all those in attendance watched.

Senator Cunningham, who hopes her proposed amendment will have an impact beyond the wrestling mat and New Jersey interscholastic sports, declared the bill should “open up the eyes of some companies that have played a role in this.”

The bill’s co-sponsor, Senator Shirley Turner commented that young men and women should not be discriminated against because they choose to have their hair braided or to have dreadlocks. She stated,

“It is a violation of their civil rights to tell you how long your hair should … it has nothing to do with how you perform in the workplace or on a wrestling mat.”

The New Jersey bill is similar to a new California law (unanimously passed in the California Assembly and Senate) amending the state’s current anti-discrimination law (the California Fair Employment and Housing Act) to provide a broader definition of “race” to include hair texture and protective hairstyles like braids, locks, twists, cornrows, and Afros. The California law protects people in workplaces and K-12 public schools from discrimination based on their natural hair. The new law, which takes effect January 1, 2020, prohibits enforcement of grooming policies that disproportionately affect people of color, particularly black people. California became the first state in the country to ban hair-based discrimination.

At the bill signing ceremony, California Governor Gavin Newsom referred to the New Jersey incident involving Andrew Johnson.

Governor Newsom said the indignity forced the student to choose whether to “lose an athletic competition or lose his identity.”

He continued, “That is played out in workplaces, it’s played out in schools — not just in athletic competitions and settings — every single day all across America in ways that are subtle, in ways overt.”

New York City has also passed similar legislation. The New York City Commission on Human Rights passed guidelines prohibiting hair-based discrimination, which implicates many areas of the New York City Human Rights Law, including prohibitions against race, religion, disability, age, gender, national origin, or religious discrimination. The guidelines, which seek to eliminate the disparate treatment of black people, specifically mention the right of people in New York City to maintain their “natural hair, treated or untreated hairstyles, such as locs, cornrows, twists, braids, Bantu knots, fades, Afros, and/or the right to keep hair in an uncut or untrimmed fashion.” The guidelines prohibit an employer from imposing any discriminatory policies that force black employees to straighten, relax, or otherwise manipulate their hair to conform with employer expectations.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor this proposed legislation as it moves through the legislative process in New Jersey and advise on the potential impact in the workplace and on the playing field if it becomes law. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

UPDATE: NCAA Flexes Its Muscle in Response to California Fair Pay To Play Act

By Gregg E. Clifton on

NCAA President Mark Emmert has predicted that it would become “impossible” for the NCAA to consider California colleges eligible to participate in national championship competitions should California pass the Fair Pay To Play Act (SB 206) and allow college athletes to maintain their amateur status while accepting pay for marketing their name, image and likeness (as discussed in our recent blog posts on March 4, 2019, and May 23, 2019).

Emmert stated this in a letter to Senator Nancy Skinner, the sponsor of the proposed legislation, and the Chairpersons of two California State Assembly Committees (the Arts Entertainment, Sports, Tourism and Internet Committee and the Higher Education Committee).

Emmert has requested the two committees postpone consideration of the proposed legislation while the NCAA convenes an investigatory working group of school presidents and athletics administrators who will be reviewing the current prohibition on NCAA athletes earning income from the use of their names, images, and likenesses. The working group, led by Big East Commissioner Val Ackerman and Ohio State University Athletic Director Gene Smith, is authorized to propose specific recommendations to potentially reform and modify current NCAA Bylaws.

In his letter, Emmert recognized the California legislature’s efforts in developing the bill, but noted, “when contrasted with current NCAA rules,

the bill threatens to alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships.”

Emmert continued, “… it likely would have a negative impact on the exact students athletes it intends to assist.”

The timing of President Emmert’s request presents a dilemma for the California state legislature as the Ackerman and Smith-led NCAA group is not scheduled to update the NCAA Board of Governors until August and will not issue a final report until late-October, more than a month after the end of the current California legislative session considering SB 206.

SB 206 was just approved by the Committee on Arts without any formal opposition. The bill is now headed to the 12-member Committee on Higher Education, which must express its approval before July 11 and before the 61 Democratic members of the full 80-member California assembly will have an opportunity to consider the bill.

In its current form, the legislation would prohibit a California postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics, from preventing student-athletes from earning compensation in connection with the use of the student-athlete’s name, image, or likeness. This would result in colleges, such as perennial sports powers like UCLA, USC, the University of California, and Stanford from being unable to stop their male and female student-athletes from signing endorsement deals or licensing contracts under the NCAA prohibition, circumventing the power and authority of the NCAA.

Senator Skinner responded to Emmert’s letter, saying, “It’s definitely a threat to colleges.”

She continued, “And this is what I think is so ironic: They are colleges. The NCAA is an association of colleges, and yet they’re threatening California colleges and saying that they would not allow them to participate in championships if my bill passes.”

Skinner reminded the public that if her bill were signed into law, it would not go into effect for another three years. She said the NCAA would have ample time to assess its own rules regarding student-athlete compensation. “Both the colleges and the NCAA have plenty of time to do the right thing,” she said.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor this proposed legislation as it moves on to the state assembly, and as similar legislation continues to be introduced around the country. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

Esports Star Tfue Sues To Void His Contract With FaZe Clan

By Gregg E. Clifton on

Fortnite player Turner Tenney, professionally known as “Tfue,” has sued to void his contract with Esports team, FaZe Clan, Inc. Tfue’s action, filed in Los Angeles Superior Court, alleges that the terms of the contract he signed to play for FaZe Clan’s Fortnite team are grossly oppressive, onerous, and one-sided and in violation of California law. His action could have a significant impact on the Esports industry and the players who participate in Esports as professional gamers.

Recognized as one of the world’s best Fortnite players, Tfue entered in an agreement with FaZe in April 2018.

The Complaint alleges that Tfue did not understand the terms of the agreement he signed and that he was exploited by FaZe. It further alleges that FaZe breached its fiduciary duty of loyalty by failing to share profits with him as mandated by the terms of his agreement and by rejecting a sponsorship deal and acting against his best interests. In addition,

Tfue alleges multiple violations of California law, including Section 16600 of the California Business and Professions Code, Section 17200 of the California Business and Professions Code, and California’s Talent Agency Act.

The contract refers to Tfue as an independent contractor. It mandates that he play in tournaments and training sessions, perform three days a month of publicity and promotional services, and participate in the company’s social media campaigns. In addition, Tfue is required to wear clothing bearing FaZe logos and identification, as well as items associated with specific FaZe Clan sponsors.

In exchange for an initial monthly base pay of $2,000 for the first six months of the contract, FaZe had an option to extend its deal with Tfue for an additional three-year period (which the company exercised) and unilaterally increase or decrease his monthly by 25%. The agreement also entitles Tfue to 80% of cash prizes earned from playing in Fortnite tournaments and an equal split with FaZe Clan of income earned from in-game merchandise, appearances, and touring and sign-up bonuses. The agreement also provides finder’s fees for brand deals that feature Tfue that can result in as much as 80% of the deal being retained by FaZe. The contract also limit Tfue’s ability to sign with another esports company at the end of his contract in 2021.

Tfue also seeks repayment of his sponsorship, fees, and commissions, as well as additional compensatory damages and punitive damages. In addition, he seeks to enjoin FaZe Clan’s ongoing alleged violations of California law.

It is probable that the court venue will be challenged. The agreement between FaZe and Tfue contains a choice-of-law provision, which provides that the agreement “shall be governed and construed in accordance with the laws of the State of New York” and the parties “submit exclusively to the state or federal courts in New York, NY for any claim” arising from the contract.

This suit will be watched closely by the industry. The lack of industry regulation and unified structure, employment law issues appear ripe for litigation. Esports team owners should ensure their contracts with players comply with federal and state employment laws and the contract language clearly defines sponsorships and endorsements, compensation, arbitration clauses, hours of service, health insurance, non-competition, and anticipated event participation.

Please contact a member of our Collegiate and Professional Sports Practice Group with any questions.

 

Agents Beware: Representation Agreement May Not Be Enforceable If It Violates State Sports Agent Laws

By Gregg E. Clifton on

A North Carolina law designed to protect student-athletes may determine the enforceability of Prime Sports Marketing’s contract with former Duke University star Zion Williamson. While Williamson is preparing to become a member of the New Orleans Pelicans after his name is announced as the No. 1 selection in the 2019 NBA Draft, he is also preparing for a legal battle in a different court…the U.S. District Court for the Middle District of North Carolina.

Williamson has filed suit against the Florida-based company and its president, Gina Ford, to have the marketing contract he signed with Prime Sports declared null and void. After signing a five-year agreement with Prime Sports and an accompanying letter of authorization reaffirming his desire to have Gina Ford begin representing him as his Global Marketing Agent, Williamson changed his mind.

Williamson alleges the agreement was entered into in violation of North Carolina’s Uniform Athlete Agent Act (UAAA) and should be declared void.

In his complaint, Williamson alleges that Prime Sports and Gina Ford violated the specific provisions of the North Carolina law that forbids a person from acting as an agent in the state unless that person has previously registered with the North Carolina Secretary of State’s office. The law applies to any agency contract, including employment agreements and marketing agreements.

In addition, the law mandates any agent to follow a series of procedural requirements to protect student-athletes from unknowingly forfeiting their remaining NCAA eligibility. Any contract between a registered agent and a student-athlete must contain a specific, capitalized notice in boldface print cautioning the athlete of the rights he will be giving up by entering into the contract. Among the many required notices, the contract must state the following:

WARNING TO THE STUDENT-ATHLETE IF YOU SIGN THIS CONTRACT

  • YOU SHALL LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;
  • YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THIS CONTRACT SHALL NOT REINSTATE YOUR ELIGIBILITY.

The agreement Williamson signed with Prime Sports did not contain any of these required notices mandated by the North Carolina law.

Of particular significance will be a judicial determination as to whether Williamson remained a student-athlete when he signed the agreement with Prime Sports and still protected by the North Carolina law. Williamson declared himself eligible to be drafted by an NBA team on April 15, arguably ending his status as an NCAA-eligible athlete. He signed the agreement with Prime Sports on April 20, when he had arguably given up his amateur status and was no longer protected by the state law. While a student-athlete’s declaration for the draft was irreversible at one time, current NCAA bylaws allow a student-athlete to “test the waters” regarding potentially becoming draft-eligible and withdraw his name from consideration as late as May 29 without risking the loss of any remaining eligibility. Here, Williamson lost the option to exercise his rights pursuant to NCAA bylaws and return to Duke University when he signed the contract with Prime Sports.

As the federal court considers Williamson’s complaint and the anticipated defenses and potential counterclaims to be asserted by Prime Sports (which has alleged the potential for $100 million in damages in a pre-complaint letter to Williamson’s attorney), the significance of Gina Ford’s failure to register as an agent with the State of North Carolina before her initial meeting with Williamson could be of crucial importance in determining the enforceability of the agreement between Williamson and Prime Sports.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor this case. Please feel free to reach out to a member of the Group with any questions regarding state and professional league agent registration requirements.

 

 

UPDATE: California SB 206 – Collegiate Athletics: Fair Pay to Play Act Moves Forward

By Gregg E. Clifton on

The Fair Pay to Play Act, introduced by California State Senate Majority Whip Nancy Skinner, has passed an initial hurdle toward becoming law as the California State Senate passed the proposed legislation by a 31-4 vote total. The California Assembly will now consider the measure in the near future.

The proposed legislation (as discussed in our recent blog post on March 1, 2019) would prohibit a California public postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics, from preventing student athletes from earning compensation in connection with the use of the student athlete’s name, image, or likeness. Specifically, any such compensation would no longer affect a student athlete’s scholarship eligibility. The proposed legislation would prohibit direct payments from schools to athletes and would become effective in 2023.

Commenting on the Senate’s approval of her proposed legislation, Skinner commented “The California Senate has spoken loud and clear: Student athletes should enjoy the same right as all other students to earn income from their talent. SB 206 gives our college athletes the same financial opportunity afforded to Olympic athletes.”

Senator Skinner asserts that the vast majority of full-scholarship athletes live at or below the poverty level while generating tens of billions of dollars for their colleges, corporate sponsors and television networks. In support of her legislation,

Skinner further alleges that, “NCAA rules disproportionately harm students from low-income families,” and that the NCAA rules “are particularly unfair to female athletes, because for many young women, college is the only time they could earn income, since women have fewer professional sports opportunities than men.”

The following is a glimpse into the most pertinent language of the proposed Act:

  • A California public postsecondary educational institution shall not uphold 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. Earning compensation from the use of a student’s name, image, or likeness shall not affect the student’s scholarship eligibility.
  • An athletic association, conference, or other group or organization with authority over intercollegiate athletics, including, but not limited to, the National Collegiate Athletic Association, shall not prevent a student of a California public postsecondary educational institution participating in intercollegiate athletics from earning compensation as a result of the use of the student’s name, image, or likeness.
  • A scholarship from the public postsecondary educational institution in which a student is enrolled that provides the student with the cost of attendance at that institution is not compensation for purposes of this section, and a scholarship shall not be revoked as a result of earning compensation pursuant to this section.
  • For purposes of this section, “public postsecondary educational institution” means any campus of the University of California, the California State University, or the California Community Colleges.

The Fair Pay to Play Act would not add any specific costs to university athletic budgets or create any financial hardships. In fact, the proposed legislation is completely cost neutral to the higher education institutions while authorizing student athletes to use their unique position to secure financial rewards while still performing at an amateur level and assuming all of the risk of season-long or career ending injury.

Despite the bill’s strong bipartisan support within the California Senate, concerns have been raised by those who oppose the legislation becoming law.

Specifically, several legislators have raised concerns how the NCAA will treat California collegiate sports programs if they follow the requirements of SB 206 and ignore the specific directives and enforceability of relevant NCAA bylaws.

Senator John Moorlach said the bill could result in California schools being excluded from the NCAA, which could eliminate the ability of these programs to participate in specific NCAA events. The California State University systems, the University of California, USC and Stanford University have all publically expressed opposition to the Fair Pay to Play Act.

Jackson Lewis’ Collegiate and Professional Sports Practice Group is prepared to counsel institutions, teams and leagues on any of these issues. The Practice Group will continue to monitor this proposed legislation as it moves on to the state assembly, and similar legislation continues to be introduced around the country. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

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