Calif. bill proposes college sports revenue sharing
Proposed legislation in California calls for major money-generating college sports teams to create a fund that would pay players a share of their teams' annual revenue.
Dan Murphy/ESPN Staff Writer
A California lawmaker introduced a bill Thursday that would reshape how college athletic departments in the state are required to share their earnings with athletes.
The proposed legislation, named the College Athlete Protection Act, calls for major money-generating college sports teams to create a fund that would pay players a share of their teams' annual revenue, a portion of which would be held in a trust for players until they complete their degree. The bill also proposes creating a 21-member, state-run panel that regulates the ways in which schools are pouring resources into protecting and educating their athletes.
Chris Holden, a former San Diego State basketball player and the current chairman of the state legislature's appropriations committee, announced the bill at a news conference in front of the Rose Bowl Stadium on Thursday afternoon.
"Through the years, college athlete concerns have been overlooked because they are not in the professional leagues," Holden said in a statement provided to ESPN. "If colleges are profiting on their players, then these students deserve equitable pathways for their careers whether that is in the professional league or in California's workforce."
The revenue-sharing portion of the bill seeks to create "fair market value compensation" for athletes. To do so, Holden's bill includes a formula designed to ensure that half of the revenue generated by each college team is dedicated to its athletes either through grant-in-aid scholarship dollars or in revenue-sharing payments.
For example, if the San Diego State basketball team generates roughly $6 million in revenue and spends roughly $500,000 on scholarships for its players, the school would have to set aside $2.5 million at the end of the year (half of the total revenue minus the cost of scholarships) for the players if the new bill becomes law.
Players would be eligible to receive up to $25,000 in annual payments at the end of their season, and any additional money would be held in a trust until they graduate. For the most profitable college teams in California, this formula could lead to hundreds of thousands of dollars paid to players who get their degrees.
The bill allows schools to reallocate funds, if necessary, to make sure they are not violating Title IX rules that require schools to provide equal benefits to men's and women's teams.
An attempt to pass similar language through the California Assembly last year failed, but Holden's position on the appropriations committee, along with an increased pressure in several different states to push the NCAA to further change its rules, provide this bill with a better chance of coming to a vote, according to National College Players Association founder Ramogi Huma.
Huma worked with Holden and his staff to craft the bill as part of his work with the NCPA, an advocacy group that has been pushing to reform the NCAA for nearly two decades. The NCPA also helped push the 2019 California bill that served as a catalyst for NCAA rules changes that now allow athletes to make money from their name, image and likeness.
The new bill also contains several provisions aimed at funding for the health and well-being of athletes that the NCPA has tried to get passed by other legislators at the state and federal levels. Those proposed rules would be monitored and enforced by a 21-member College Athlete Protection panel appointed by state politicians.
Other items in the bill include:
- Requirements for schools to cover medical costs for sports-related injuries and insurance plans. The requirements vary based on how much annual revenue an athletic department generates;
- A subcommittee of the College Athlete Protection panel that would establish regulations about when athletes can return to play after an injury along with other health and safety rules;
- A subcommittee to certify agents who work with college athletes on endorsement deals;
- Guaranteed scholarships for six years (or until the athlete earns their degree) for athletes who remain as full-time students in good academic standing;
- Requirements that schools publicly share information about their current compliance with Title IX law and information about what benefits they provide to their athletes designed to increase transparency for prospects in the recruiting process;
- A prohibition that prevents any school from cutting one of its varsity sports if the athletic director at the school makes more than $500,000 per year.
The bill specifically says that payments to athletes should not be used as evidence that the athletes are employees of their schools. In the most recent push to further change the business of college sports, the NCAA and its members have drawn a hard line at allowing athletes to be considered employees. There are several ongoing legal efforts to gain employee status for college athletes, but this bill is not intended to be part of that push.
