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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]

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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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