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California Adopts Bill Allowing Athletes to Earn Money from Marketing Promotions or Endorsement Deals

On Monday, September 30, 2019, California Governor Gavin Newsom signed into law SB 206, the "Fair Pay to Play Act," which is a bill that could fundamentally transform collegiate athletics amateurism rules. The bill allows college athletes to earn money from the use of their name, image or likeness through sponsorships and/or endorsements, which is in direct conflict with the National Collegiate Athletic Association (the "NCAA") amateurism rules.[1] The Fair Pay to Play Act will go into effect in 2023 and will apply to all 58 California NCAA-affiliated schools.[2]

The Fair Pay to Play Act does not require colleges to pay their athletes, but rather will prohibit schools from upholding rules preventing student athletes from participating in intercollegiate athletics because the athlete is being compensated for the use of their name, image or likeness.[3] This prohibition will apply to institutions and organizations affecting California student athletes, including the athlete’s academic institution, the NCAA and collegiate athletic conferences such as the Pac-12.[4] However, colleges will be able to control the types of sponsorships or endorsements students may enter into, so that student deals will not directly conflict with preexisting school sponsorship deals.[5]

“It is time to stop the ageism that permeates Hollywood’s casting process,” wrote SAG-AFTRA President Gabrielle Carteris.[1] On September 24, 2016, California Governor Jerry Brown took a controversial step toward achieving such a goal when he signed the Customer Records bill, AB-1687 (effective January 1, 2017), into law. This new state law requires that Internet Movie Database “IMDb” remove an actor’s listed age upon request by that actor.[2] IMDb is a well-known website in the entertainment industry that offers information about movies, television shows, and actors. Its subscription service, IMDbPro, allows actors to create their own profile page and access job listings posted by industry professionals. Industry professionals directly use the website for casting calls and auditions and have been known to frequently filter out potential actors though information posted on the website. Thus, the broader goal of this law is to alleviate age discrimination in an industry that has been alleged to phase out ageing actors in a discriminatory fashion.

Online tv programKristyn Fields is a former Garvey Schubert Barer legal extern who worked out of the firm's New York office. She was a law student at Brooklyn Law School.

Since the Aereo case, the debate over whether online television services should be regulated in the same way that cable providers are rages on in California federal court, with the recent case against the streaming service FilmOn X (“FilmOn”). FilmOn is facing copyright infringement claims from television networks and countering those claims by asserting that it is eligible for the same compulsory license as other broadcast providers. On July 16, 2015, Judge George Wu agreed with FilmOn’s defense, ruling that the company should be treated as a traditional cable provider and is entitled to a Section 111 compulsory license.

California Governor Jerry Brown has taken a big step toward bringing film and television production back to California by signing a bill last week that increases the budget of its Film and Television Tax Credit Program from $100 million to $330 million.  In addition to the significant budget increase, the new bill replaces what many considered to be an arbitrary lottery selection process with one that considers eligible productions based on job creation and economic impact on the state, and it also opens up the program to films with budgets over $75 million for the first time.  California, the state most associated with the entertainment industry, has seen a sharp decrease in film and television productions occurring within the state due to an increase in the number of other states offering film and television tax incentive programs ("Incentive Programs"), a number of which offer more competitive incentives than that previously offered by California.  Since 2000, the number of states with such programs has increased from just a handful to a majority of the states, and according to Gov. Brown, the number of productions in California has been cut by half in the last 15 years.

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The Sports, Arts & Entertainment group at Foster Garvey provides full service legal representation on sports, entertainment and business matters, including handling transactions related to brand management, licensing, joint ventures, venture capital, private equity, technology, the Internet and new media.
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