BY Art Thiel 06:30AM 10/01/2019

Thiel: California goes rogue with new sports law

Under a new law, athletes at California colleges can get income for use of their likenesses. But not until 2023, which allows UW’s Petersen time to pay attention.

Imagine in a few years when USC comes to Husky Stadium able to pay its players OVER the table. / Drew Sellers, Sportspress Northwest

News Monday that the four California schools in the Pac-12 Conference were given legal permission to allow their football players in the future to receive outside income, which is not allowed for Washington players, did not muss a single one of coach Chris Petersen tightly coiffed hairs.

He has a football game to win Saturday, fools.

“I don’t know how all this is going to go,” he said. “Luckily, it’s not a problem I have to solve. So, good luck.”

Predictably, Petersen wouldn’t deviate from his bland game-week patter to discuss how the conference’s most important state decided to go rogue on the NCAA, the anti-labor cartel that helps undercut American workplace principles in order to make wealthy its executives and football and men’s basketball coaches.

California Gov. Gavin Newsom Monday signed into law the right of his state’s college athletes to earn endorsement deals and sign with agents, just like any other students whose names might help companies sell products.

“Every single student in the university can market their name, image and likeness; they can go and get a YouTube channel, and they can monetize that,” Newsom told the New York Times. “The only group that can’t are athletes. Why is that?”

It’s because for more than a century, the NCAA has put a virtual corral around athletes called amateurism, an obstruction that no longer exists anywhere in the world. But here in the first-world USA, we have the capacity to go third world when it suits us, as it does with big-time college sports.

The corral just came down in California. Granted, the law’s implementation isn’t scheduled until 2023, which explains why Petersen wasn’t ordering everyone on campus to get on horseback and round up the strays.

But consider that Petersen now is recruiting for the class of 2020. Any player who chooses a California school and stays until his senior year can get income for his services. Change is closer than Petersen thinks.

But he isn’t oblivious to the fact the law is a clear and present danger to his profession, particularly if other state legislatures, like Washington’s, follow California’s lead.

“I mean, they got to get it figured out,” he said. “You got to have some rules to play by. I don’t know. I don’t have anything to do with this. They’re not asking me for advice on any of this stuff.

“So I just try to coach the guys, recruit the guys with the rules they give us.”

Petersen’s cop-out is understandable. It’s unlikely that he or any of his contemporaries would clear their throats in support of any boat-rocking reform, not when football coaches are the highest-paid employees in 39 of the 50 states, including Washington. There’s no status quo like the status quo in college sports, where for more than a century the periodic eruption of reformers gets distracted by shiny objects such as bowl games and basketball brackets.

In Petersen’s place, the Pac-12 office stepped in, issuing a statement Monday full of tut-tuts and tarnations, delivered with a harrumph:

The Pac-12 is disappointed in the passage of SB 206 and believes it will have very significant negative consequences for our student-athletes and broader universities in California. This legislation will lead to the professionalization of college sports and many unintended consequences related to this professionalism, imposes a state law that conflicts with national rules, will blur the lines for how California universities recruit student-athletes and compete nationally, and will likely reduce resources and opportunities for student-athletes in Olympic sports and have a negative disparate impact on female student-athletes . . .

Responding in a word: No.

Big-time college sports IS professional, with the exception of no pay for some of its employees.

Regarding unintended consequences, there are many already: the sex-abuse scandals at Michigan State and Penn State, the academic fraud at North Carolina and many other schools, the recent admissions-fraud scandals at several schools including USC, the FBI raids on men’s basketball programs for illegal payments to players . . . I could go on, but we don’t have time to take all of your requested favorites. Or were the examples cited intended consequences of big-time sports?

Regarding state laws that conflict with national rules, the solution is easy. Change the national rules. The NCAA is a trade association, not the old Soviet army.

Regarding blurring the lines for California’s national recruiting, there’s no blurring. The new law’s a helluva help. As one former California resident likes to say, always compete. Let the other states tear down their corrals.

Regarding de-funding Olympic (read: non-revenue) sports in college, the choice is strictly up to the colleges. Washington can pay Petersen $1 million less and fund two Olympic sports. Petersen is unlikely to starve. And as long as Alabama pays $4 million less to Nick Saban and funds eight sports, it’s fair.

College sports as an industry is reported to have grossed $14 billion in revenues in 2018, yet the new law does not seek to re-direct one dime toward players, only to let them make outside income off their work. But the NCAA is probably going to sue anyway, on the stupendously novel grounds that they need to keep their players broke-ass to survive. Save me a spot in the courtroom’s front row for that.

At least California was kind enough to give the NCAA four years to figure out reform for itself. If it doesn’t, Stanford, Cal, USC and UCLA will acquire all the best 18-year-old football and men’s basketball players in America.

That’s when you’ll find Petersen in Olympia, his attention to state lawmakers fully acquired.

 


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YourThoughts

  • Seattle Psycho

    I don’t know what to think about this. Part of me says the players should get whatever their value is. The other part says they should go pro if they are good enough at 18. Perhaps they can go straight to the XFL out of high school. Plenty of basketball leagues around the world 18 year olds can play in.

    • art thiel

      The players already ARE pros. They’re just paid poorly, with a scholarship that many are untrained to exploit.

      • Husky73

        Boom, there it is.

  • wabubba67

    I’m not sure about which side to be on with the passage of this new law. I like that players will now have the opportunity to earn money, but am very concerned about “endorsement deals” for recruits creating a financial bidding war for high school kids. (Oil money in Texas v. tech money in Washington/California v. old money of the deep South, etc.)

    • art thiel

      It’s a legit concern, but until some legislative body created a doomsday scenario for the NCAA, inertia toward reform would continue to prevail. You know, like Petersen not taking 30 seconds to form a coherent opinion one way or another.

      • Michael Waters

        It’s too soon and needless for Petersen to opine publicly. If I were he, I’d be “aw shuckin’ it” too.

        • art thiel

          I understand why he does it. I also know he knows exactly what he thinks, and could enlighten his audience with his rationale. But it has nothing to do with beating Stanford, so the topic is to him radioactive. Coaches can do far worse things.

          • Michael Waters

            “Coaches can do far worse things.”

            Correct. He’s a coach, as opposed to an editorialist, a futurist, or one of my favorite sports journalists ;-)

  • coug73

    The new pay to play policy that may or may not become reality.

    • art thiel

      You could say that about living until tomorrow.

  • DJ

    Thanks Art!
    In my opinion, this is a huge logical step forward in the pay for play issue. It is appropriate for student athletes to be able to take ownership of their likenesses, which are currently hugely marketed by all currently involved in the college sports money-making hierarchy. Compensation won’t need to come from a stipend from their schools, for which there is no obvious right way to do. Compensation can come from licensing, marketing funds, and would likely be proportional to the performance of the student athlete. I can’t imagine that the schools, conferences and networks would look to avoid the use of star athlete’s likenesses to keep from having to pay licensing. It would behove all California student athletes to obtain that sort of control. Time to either think about becoming a sports marketing agent, or buy stock in the industry – in 4 years it’s gonna soar!

    • art thiel

      Actually, the idea of universities making publicly traded corporations out of their athletic departments has merit. I know every academic and NCAA lawyer would swallow his or her tongue, but if you want to end hypocrisy and increase transparency, capitalism is a way forward.

  • Will Ganschow

    How long have you been writing about this?……. !

    • art thiel

      For as long as I’ve discovered hypocrisy, mendacity, mission-statement perversion and outright criminality in big-time college sports. While I’m hardly alone, all the well-considered commentary on the fundamental corruption of big-time college sports did not deter Larry Nassar, nor stop Michigan State from covering for him.

      • Husky73

        When I was in college at the UW (just after the last ice age) the Huskies had a quarterback named Sonny Sixkiller. The UW bookstore and dozens of other retail outlets sold a zillion “6 Killer” and “6” t-shirts. Sonny did not see one red cent from those sales. That’s just wrong.

        • art thiel

          Evidence entry No. 10,366 of approximately 10 million.

      • Effzee

        How do you feel about https://twitter.com/EdgeofSports

  • tor5

    Great reporting and commentary, Art. Thanks. Helps me understand how huge this is, and some of the for-against arguments. On the one hand, there’s something fundamentally unfair about preventing a kid from profiting from his likeness when all the adults already are. But it’s also a little disconcerting to think of an 18-year-old getting millions on some marketing deal (he ain’t studying for midterms!). Neither one of these scenarios seems to have the kid’s best interest at heart. And that’s kind of the root of it: With $14B bouncing around, it’s hard for anyone to focus on social good. Still, on balance this seems like a step in the right direction, and probably unstoppable. Is there any hope the NCAA will find its footing and play a positive role?

    • art thiel

      If a lawful gun is put to its head, the NCAA is capable of meaningful change. At least I think so, but nothing like this has happened. There’s always been threats of congressional action, but never real profound action practically since Title IX.

      The real test is whether university presidents and ADs understand that amateurism in sports is dead everywhere in the world except under their $14B watch.

  • ll9956

    At the risk of seeming insensitive and making light of a serious matter, I applaud you, Art, for yet another great addition to the Thiel lexicon: “broke-ass”.

    • art thiel

      I lifted it from the street, a place where many great words and deeds arise.

  • Tian Biao

    a wonderfully enjoyable summary, thanks! I pretty much agree with everything. the system as it now stands is grossly and obviously unfair. also: if only California schools can offer this opportunity, they’ll have a huge recruiting advantage. also: why couldn’t female athletes or non-revenue athletes benefit? ie that UCLA gymnast for example, or Kelsey Plum, or UW crew, or many others. that’s a remarkably silly argument even by NCAA standards.

    • art thiel

      It’s true that there are numerous athletes beyond hoops/football who would benefit.

      Yes, California will have a huge advantage, but I suspect by 2023, a compromise will have developed that will be universal among all states.

  • Mark Stratton

    How do you keep boosters from sponsoring an athlete’s Web page or YouTube video for large sums? Something certainly needs to change, but this doesn’t seem like a good start. You can’t just blow it off as a step in the right direction that will force the hand of the NCAA. You of all people Art, can’t say you’re counting on the NCAA to figure this out in an equitable manner.

    You say the athletes are already pros, but what percentage of D1 football and basketball players make it to the bigs? The large majority are student-athletes who will only go as far in life as their free education will take them. Elite athletes will benefit much more than most, and that’s not exactly fair either. The coaches problem yes, but another worm in the large can California has opened. I’m not naive enough to believe that doesn’t already happen, but once you remove the faulty guardrails all hell will break loose.

    • art thiel

      I doubt this method will be how athletes get extra income by 2023. But it is a good start — a large legislative body proposed and executed a reform demand. Nothing was left to Congress, nor an NCAA in-house “blue-ribbon” committee to hem and haw and finally throw a nickel on the the table (“cost of attendance”).

      The small percentage of athletes who play pro ball is irrelevant to the discussion about compensating athletes who are currently in college. Separate matter. And yes, the compensation likely will go to a few elite athletes, just as the best students in music, computer science and engineering can earn money in their fields while attending class. That may not be fair, but it is the marketplace.

      If guardrails were in place, the FBI would never have had to raid men’s college basketball. The valley below the road is filled with more than a century of scandals.

    • 1coolguy

      I TOTALLY agree – it will be the 21st century version of the Oklahoma land rush – not pretty.

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  • Lightninbug

    What is to prevent the NCAA from making these colleges and any other who follow suit ineligible for the National Championship Series as well as for any Bowl game that they might otherwise be eligible for? My query includes inter Conference championships also.

    • art thiel

      That is what the NCAA is threatening to do in 2023 if the law stands. California is saying, We dare you,” knowing the NCAA will cave into some acceptable reform. The NCAA needs California more than California needs the NCAA.

      • Lightninbug

        Makes me nervous to anticipate a bidding war for talent. I certainly do hope that there are reasonable ground rules for that eventuality.

  • dgw44

    How are the CA kids going to monetize their likeness without using the school’s logos and uniforms? The universities and the NCAA will guard those rights and trademarks with unabashed fervor using their powerful and high-priced lawyers with the piles of cash they have in their coffers. This new ‘law’ is far from one, with the legal sharks cashing in long before any athlete sees a dime.

    • art thiel

      “Hi, I’m Reggie Bush. This is my favorite rider lawn-mower. Please buy it.”

      He doesn’t need a logo to say that. Lots of high profile athletes don’t use team trademarks to sell product, whether by choice or rule.

  • Husky73

    “I didn’t get a harrumph out of that guy!” (Blazing Saddles)

  • Matt

    It’s easy to throw out the $14B in revenues number….but what are the expenses of these Athletic Departments? Aren’t there just a handful in the black….with most in the red? With the soaring costs of scholly’s I’d like to know how much actual Net there is to be thrown around? I get SB 206 is about making $$ outside of Athletic Budgets, but the argument you make Art seems to stem from college athletics already making gobs of $$, and not throwing out appropriate bouquets to the athletes.
    As for finding room in the budget I’m all for coaching salaries coming down to a palatable level…and maybe teams don’t need to stay at the 4 Seasons when traveling…but where else will it come from?

    • art thiel

      You’re right, most D-1 athletics departments operate in the red, but that’s because there’s no cap on salaries of coaches and administrators. Those positions are in the competitive capital marketplace, yet it’s protected by the NCAA cartel that suppresses labor costs.

      The NCAA needs to cap and cut salaries, or professionalize the labor force and increase revenues by creating an NFL-like monopoly operation for college sports.

  • 1coolguy

    Chaos and destroying lesser programs will ensue. Without arguing whether it is right or wrong, how will the WSU’s of the world compete with USC after this is implemented? How about Montana? North Dakota? Wyoming? The level playing field in recruiting is not 100% level, but it is a system that overall has worked. After this is implemented? Forget it. Apparently what proponents think is every school has the ability to compete, and that is the height of naivete.
    So a loaded USC alum calls a kid being recruited and says “Hey, I will have you represent my car dealership and here’s $300,000”. A movie studio calls and says “You’ll be in a movie every year and it’s worth $1mm each”. Alabama supporter calls and says “I’ll need help on an oil platform for the summer and having you in our company ads is worth $500,000 a year”, and USC, Alabama, Notre Dame, LSU, Michigan, etc have DOZENS of supporters that can make good on this – WSU, etc, not so much.
    Another aspect is a new business will open up – representing high school kids with marketing contracts, and that is very real.
    The marketing rep calls 10 schools and asks what endorsement deals will be inked BEFORE the kid signs and of course the agent gets his % cut.
    I am a capitalist and free market guy to the core, but this is not going to be pretty.

    • art thiel

      As a hard-core capitalist, you should recognize and appreciate that disruption and innovation occur when an artificial restraint (amateurism) is removed from the marketplace. And as a hard-core capitalist, you shouldn’t care that WSU and lesser-funded schools will be crushed in the disruption.

      Because caring about entities with fewer assets is . . . socialism. And the NCAA is nothing but socialistic, even though it fails miserably at it.

      • 1coolguy

        “And as a hard-core capitalist, you shouldn’t care that WSU and lesser-funded schools will be crushed in the disruption”
        You couldn’t be more in the wrong Art – Capitalism in an open marketplace results in great efficiencies and lower costs, and better marketplaces. In a perfect marketplace the lesser colleges would go out of business, but universities closing is not what we want, so they must be protected, economically. otherwise, the wealthy programs will completely own football and basketball recruiting.

        • tor5

          The capitalism lens is an interesting way to look at this. But, respectfully, I think your terminology is confusing, coolguy. When you’re talking about “protecting” lesser universities, you’re talking socialism, just as Art says. The fantasy “perfect marketplace” would mean the elimination of public universities all together (and eliminating public education, for that matter). We’re all (including you) talking about degrees of capitalism-socialism balance, when it comes down to it.

        • Archangelo Spumoni

          A: “Capitalism . . . open marketplace” cannot possibly exist along with “so they must be protected.”
          B: . . . “I am a capitalist and free market guy to the core.”

          Statement A cannot exist with statement B. A matter of definition of long-established concepts.

  • Richie Rich

    I disagree with the whole premise – and apparently I’m in the minority.
    Annual tuition at University of Washington is estimated at $35k – $45k. To be able to get a college degree, without incurring any lingering student debt, seems to be a pretty good deal for the student-athletes that have that opportunity. Not sure how you can say they’re not getting value for his/her time and effort?
    Just like in real life, executives at any major corporation aren’t rolling up their sleeves, it’s the front-line workers that are doing the dirty work and getting things done, but yet CEOs are the ones making the big bucks.
    This is the beginning of the end of college sports as we know it. It’s only a matter of time before boosters are making deals to get the top recruits. Whatever parity that made events like March Madness exciting to watch will be torpedoed by this, as the rich will get richer.

    • Archangelo Spumoni

      Thanks for the post and there are a few other items to keep in mind. ESPN paid about $5.64B for 12 years’ worth of the championship, or about $470,000,000 per year for the semifinals and the championship game plus a few other bowls. (And there are different stories with different numbers but I picked the low one.) Mind you and everybody, this is a tiny part of the season.

      From collegecalc.org: Tuition: U of W Seattle campus is $9,909 per year for residents. (Another source that says $11,207). By the time you figure spring ball, fall camp, travel, limits on actual classes (the Northwestern kid who tried to unionize was FORBIDDEN to take a certain chemistry class he needed for medical school), actual practice, players cannot work during the season, film, weights, extra bowl game practices, players never spending the holidays with family, etc., they make a relative pittance.

      The beginning . . . middle of the end started with the astronomical broadcast numbers going to the NCAA who declined to do anything for the folks actually earning the $.

      In a perfect Archangelo Spumoni world, 3 days before the semifinal games, maybe 6 players from each of the 4 teams hold a suddenly-called and mysteriously-titled press conference. They announce that the players will not play unless the NCAA recognizes their union and pays the players X amount. BOOM the NCAA suddenly figures out how to pay the players.
      This whole thing simply eliminates the CHARADE of amateurism and ARTIFICIAL restraint that the NCAA maintains; you can always tell when the NCAA is getting ready to lie when they say “student-athlete.”

      QED