Under a Proposed California Bill, Some College Athletes Could Earn $25,000 Per Year. Some Are Worried for Less Lucrative Sports

College athletes could finally get a slice of the revenue pie that athletics departments generate from some sports.

State Assemblymember Chris Holden (D-Pasadena), who played basketball at San Diego State, has proposed a new bill called The College Athlete Protection Act, which would entitle college athletes to up to $25,000 annually from their departments’ revenue.

Any surplus would be placed in a trust that athletes could access after they graduate.

The legislation is intended to compensate athletes for raising the profile and prestige of their schools and athletics departments, as well as ensure that they graduate. But Pac-12 schools, including USC and UCLA, oppose the legislation, saying the new law would likely lead to the elimination of sports that don’t generate revenue.

Who would benefit?

Alicia Jessop, a professor of sports administration at Pepperdine University, joined LAist’s public affairs show AirTalk to discuss what this bill might mean for universities and for athletes in revenue and non-revenue sports.

“College athletes, day in and day out, are contributing [greatly] to revenue production at their respective universities,” Jessop says. “Yet, although they are getting the huge benefit of a college scholarship, many of them aren't getting the fair market value of their services.”

Jessop says not every college athlete would have access to revenue sharing. It would be reserved for athletes whose teams spend at least 50% of their revenue on these athletes’ scholarships — which would primarily be football, men’s basketball, and in some cases, women’s basketball.

If a team’s revenue exceeded the 50% threshold for scholarships, the remaining revenue would be divided among the team: up to $25,000 for each athlete while they're still in college, with the rest being put in a degree completion fund for them to access after graduating within six years.

The bill would give schools another option: they could distribute the difference between the current and previous year’s revenue, even if they did not make a profit. For example, a team that generated $1 million in one year and $2.5 million the next year would split the difference, $1.5 million, among the members.

Jessop says it’s important to note that this bill would provide an equal share of revenue to everyone on the team: a football team’s star quarterback would not receive a bigger cut than its kicker.

This is in part because college athletes are not considered employees of the school, Jessop says. She thinks the lack of employee status is one of the biggest hurdles to negotiating a fair revenue split that both parties find feasible.

She does not believe the 50% threshold is feasible.

“I'm a college athlete advocate. I believe that college athletes should be compensated more than they are today,” Jessop says. “But this arbitrary 50% number presents huge hurdles for even the biggest athletics departments which we have in LA, like USC and UCLA.”

Effects on non-revenue sports

Funding for college athletics can get quite complex, and any changes to it, like this bill, could have unintended consequences, says Andy Fee, deputy athletic director at the University of Washington.

Fee says the intense focus on football and men’s basketball could create a huge recruiting battle for star athletes on those teams. This could put pressure on Olympic sports, like track and field, that don’t produce any revenue.

“For example, here at University of Washington, or even any of the schools in the Pac-12, football and basketball drives revenue to pay for those student athletes in the Olympic sports, scholarships and operating budget,” Fee says. “So every dollar you're taking away isn't necessary replaced. To me, that's a huge concern.”

Fee says this bill could drive schools to cut or reduce programs in sports that don’t generate revenue, since tight budgets can mean they just have to follow the money.

But Professor Jessop of Pepperdine says that isn’t necessarily true. With many schools’ endowments going well over $1 billion, it’s a matter of how they choose to allocate the money, Jessop says. Nearly 30 college coaches earned $3 million in 2019, she says, outpacing the salaries of many state governors.

That’s why she thinks that some of these concerns over programs getting wiped out are overblown.

“That's not economic reality. That's not how a free market works,” Jessop says. “There are incentives for universities to continue offering opportunity.”

Listen to the conversation