The Financial Grim Reaper is Knocking on the NCAA Door
California recently became the first state in the U.S. to pass legislation designed to provide some legal rights and protection for college athletes. The legislature passed and Governor Jerry Brown signed into law the California Student-Athlete Bill of Rights.
The bill is targeted specifically at the four universities in the state that are members of the PAC-12 Conference in that it only applies to those four year institutions whose athletic departments receive more than $10 million per year in media rights. Under recently negotiated contracts, all PAC-12 schools are guaranteed a minimum of $21 million per year beginning with this academic year.
The bill requires schools to pay, in certain circumstances, for student-athletes’ education once their eligibility has ended and they have not yet received a bachelor’s degree. It requires schools to pay medical insurance premiums for its student-athletes and to cover medical expenses for up to two years after they have exhausted their eligibility.
Legislative leaders who pushed the bill through argued that student-athletes are virtually powerless to advocate for themselves and certain benefits should be basic to the very people whose performances make it possible for schools to generate millions of dollars in revenue.
Readers should also be aware of recent rulings by the federal district court in San Francisco in the case involving some 30 former student-athletes who have sued the NCAA and sought class action status in a case alleging unlawful use of the athletes’ likenesses without their permission, and without paying any licensing fees. In September, the Court allowed an expansion of the scope of the plaintiff’s claims and, therefore, what they can seek in discovery. In early October, the Court ordered ESPN to turn over contracts it has with NCAA schools — a move the media mogul and the NCAA had adamantly opposed. (http://sportsillustrated.cnn.com/2012/writers/michael_mccann/10/02/Ed-O-Bannon-ESPN/index.html).
NCAA members are facing stronger financial challenges than ever before. The movement is growing to provide better compensation and benefits to the student-athletes who make big-time college sports possible. These developments could well transform the face of college sports in the next 10 years.
Those interested in reading more about the recent legislation should click on the following links: