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New California bill pushes for collegiate sports revenue sharing

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A California legislator introduced a bill on Thursday that would overhaul how the state’s collegiate athletic departments are required to share their earnings with athletes.

The proposed legislation, dubbed the College Athlete Protection Act, would require major cash-generating college sports teams to create a fund that would pay players a portion of their teams’ annual income, a portion of which would be held in a fund for players until they complete their course. The bill also proposes creating a 21-member state 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 current chairman of the state legislature’s appropriations committee, announced the bill at a news conference outside Rose Bowl Stadium on Thursday afternoon.

“Over the years, the concerns of college athletes have been overlooked because they are not in the professional leagues,” Holden said in a statement provided to ESPN. “If colleges are profiting from their players, then these students deserve equitable career paths, whether in the professional league or in the California workforce.”

The revenue sharing portion of the bill seeks to create “fair market value compensation” for athletes. To do this, Holden’s bill includes a formula designed to ensure that half of the revenue generated by each college team is devoted to its athletes, either through scholarships or in revenue-sharing payments.

For example, if the San Diego State basketball team generates about $6 million in revenue and spends about $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 total revenue minus the cost of scholarships) to 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 California’s most profitable college teams, this formula can lead to hundreds of thousands of dollars paid out to players who earn their degrees.

The bill allows schools to redistribute funds, if necessary, to ensure they are not violating Title IX rules, which 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 mounting pressure in several different states to pressure the NCAA to further change its rules, provided this bill with law a better chance of coming to a vote, according to National College Players Association founder Ramogi Huma.

Huma worked with Holden and his team 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 forward California’s 2019 bill, which served as a catalyst for NCAA rule changes that now allow athletes to monetize their name, image and appearance.

The new bill also contains several provisions aimed at funding the health and wellness of athletes that the NCPA has tried to pass through other legislators at the state and federal levels. These proposed rules would be monitored and enforced by a 21-member college athlete protection panel appointed by state politicians.

Other account items include:

  • Requirements for schools to cover medical costs for sports injuries and insurance plans. Requirements vary depending on the annual revenue generated by an athletic department;

  • A subcommittee of the College Athlete Protection Panel that would establish regulations on when athletes can return to play after an injury, along with other health and safety rules;

  • A subcommittee to certify agents who work with collegiate athletes on endorsement deals;

  • Scholarships guaranteed for six years (or until the athlete earns their degree) for athletes who remain full-time students with good academic performance;

  • Requirements that schools publicly share information about their current compliance with Title IX law and information about the benefits they offer their athletes, with the goal of increasing transparency for potential candidates in the recruitment process;

  • A ban that prevents any school from discontinuing one of its varsity sports if the school’s athletic director earns more than $500,000 a year.

“The NCAA’s formal position is that it has no duty to protect or educate collegiate athletes,” Huma said in a statement ahead of Thursday’s news conference. “This bill would protect the physical well-being of athletes and ensure that they are treated equally in the commercial and educational aspects of collegiate sports.”

The bill specifically says that payments to athletes should not be used as proof that athletes are employees of their schools. In the most recent effort to further change the business of collegiate sports, the NCAA and its members have taken a hard line on allowing athletes to be considered employees. There are several ongoing legal efforts to obtain employee status for collegiate athletes, but this bill is not intended to be part of that effort.