Breaking Down California’s “The Fair Pay to Play Act”

Over the past week, sports headlines have been dominated by California’s new law “The Fair Pay to Play Act” that permits financial payments to collegiate athletes.  There are many critics and many proponents.  So, is it a good thing or bad?  From an intellectual property perspective, it is a great thing. 

For starters, the NCAA rules governing college athletes are archaic.  The rules prohibit any payment to athletes on a college scholarship.  This means that the college athlete does not receive any compensation for commercial use of the athlete’s own name or image.  So, who does receive compensation?  The schools and the NCAA do. 

The Reigning Behemoth

There have been outcries by athletic directors and school presidents claiming that the impact of this law will be “disastrous” because the “clear” distinction between amateur sports and professional sports will be blurred.  Make no mistake – this distinction has already been blurred for several decades.  The NCAA is a money-making behemoth.  Its college basketball tournament, also known as “March Madness,” is monetized to the maximum. 

CBS and Turner Broadcasting are contracted to pay the NCAA $1 billion for television broadcast rights through 2032.  March Madness, Sweet Sixteen, Elite Eight, and Final Four are all registered trademarks of the NCAA.  The NCAA licenses its marks for millions of dollars to sponsors clamoring to get in on the March Madness action. 

The NCAA is rigorous about its enforcement rights, too.  There is dedication from the NCAA to scout for infringing uses of its trademarks.  Their attorneys are quick to deliver a cease and desist letter from NCAA attorneys if individuals and companies did not properly license the use of NCAA trademarks.  How is this any different than commercial brands such as Nike, Coca-Cola, and Disney maximizing value of their brands?  It’s hard to argue whether the NCAA is distinct from these large commercial brands.

Giving Athletes the Reins

At Calderone McKay LLC, one of the most important intellectual property issues facing our clients is protecting their brand.  Protection not only stems from proper registration of trademarks and copyrights with the government, but also it stems from who has the ultimate control of how a brand is going to be used and be perceived by the public. 

The Fair Pay to Play Act puts the reigns back in the hands of the athletes and gives them control of how their names and likenesses will be used by others.  Most importantly, it gives the athletes the ultimate say in who is going to make money from the use of their intellectual property.  A law like The Fair Pay to Play Act is long overdue. Hopefully additional states follow California’s lead for the benefit of the athletes.

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