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Stipend Fight Moves to California Legislature

Stipends covering all or part of the gap between the NCAA’s full grant-in-aid and the cost of attendance at an institution have bogged down in the NCAA. The $2,000 miscellaneous expense allowance was shelved under heavy opposition. Need-based plans may not end up assisting the football and men’s basketball players that generate the revenue for schools and criticism of the NCAA. And the possibility of simply increasing scholarships to cost-of-attendance is a few years away.

At the same time, the National College Players Association has achieved a series of victories in California regarding student-athlete protections. AB 2079, passed in 2010, requires California universities to publish more information regarding athletic department policies like scholarship renewal, insurance information, and transfer releases. SB 1525, which was passed last year and takes effect for the 2013–14 school year, requires athletic departments which make more than $10 million per year to provide additional protections for student-athletes, like equivalent scholarships if they are cut.

So far, the NCAP and the California legislature have attacked the issue at the margins. Nothing in AB 2079 or SB 1525 is inconsistent with NCAA rules. The bills simply require California universities to do things that are allowed but not mandated by NCAA rules. There are some questions regarding how they fit with NCAA regulations (do equivalent scholarships count as athletic scholarships?) but no real conflict between the two.

AB 475, introduced in February, is [not so delicate][sac bee]. AB 475 would apply to universities in California making more than $20 million in media and licensing fees (UCLA, Cal, Stanford, and USC). These universities would be required to guarantee athletic scholarships for five years or until an athlete exhausts his or eligibility. No problems with NCAA rules yet.

The direct challenge to the NCAA is AB 475’s requirement that athletic scholarships at institutions covered by the law be increased to the cost of attendance and include a $3,600 “athletic participation stipend.” What is not clear is whether those increases are cumulative, i.e. a full cost-of-attendance scholarship AND an additional $3,600.

Such a scholarship would be prohibited under current NCAA rules, which limit athletic scholarships to a full grant-in-aid. In effect, UCLA and Cal would be legally required to provide scholarships that are prohibited by the NCAA.

If the bill should pass, it will set up a major legal battle between the NCAA and the state of California. The NCAA might continue to enforce its rules, sanctioning the Pac–12 schools for following the California law in violation of NCAA rules. That would prompt a lawsuit against the NCAA from either the schools or the state of California. Or the NCAA could simply sue to have the law declared unconstitutional.

The NCAA has done so successfully in the past. Miller v. NCAA resulted in a Nevada law requiring greater due process protection in NCAA proceedings to be declared unconstitutional under the Dormant Commerce Clause. That doctrine prevents a state from passing laws which burden interstate commerce, one of the activities which Congress may regulate. It is the same theory the NCAA is using in its countersuit against the state of Pennsylvania.

The NCPA’s legislative strategy has paid off well here. If the bill is passed, and previous legislative victories help, no matter what happens it is a massive win. The NCAA could permit the stipends meaning that portion of the law is at least allowed nationwide. The NCAA could sue and lose, depriving them of the protection of the Miller precedent from state regulation. Or the NCAA could sue and win, which would be a bad public relations image and potentially get Congress seriously involved in regulating the NCAA more closely.

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