Sports & Entertainment Beat

California Adopts Bill Allowing Athletes to Earn Money from Marketing Promotions or Endorsement Deals

On Monday, September 30, 2019, California Governor Gavin Newsom signed into law SB 206, the "Fair Pay to Play Act," which is a bill that could fundamentally transform collegiate athletics amateurism rules. The bill allows college athletes to earn money from the use of their name, image or likeness through sponsorships and/or endorsements, which is in direct conflict with the National Collegiate Athletic Association (the "NCAA") amateurism rules.[1] The Fair Pay to Play Act will go into effect in 2023 and will apply to all 58 California NCAA-affiliated schools.[2]

The Fair Pay to Play Act does not require colleges to pay their athletes, but rather will prohibit schools from upholding rules preventing student athletes from participating in intercollegiate athletics because the athlete is being compensated for the use of their name, image or likeness.[3] This prohibition will apply to institutions and organizations affecting California student athletes, including the athlete’s academic institution, the NCAA and collegiate athletic conferences such as the Pac-12.[4] However, colleges will be able to control the types of sponsorships or endorsements students may enter into, so that student deals will not directly conflict with preexisting school sponsorship deals.[5]

The Largest College Admissions Bribery Scandal Erupted in the United States With a Number of Celebrities as Targets

In the early weeks of March, news broke of the largest college admissions scandal in the country's history, nicknamed "Operation Varsity Blues".  At least 40 people were charged with conspiracy to commit mail fraud and honest services mail fraud for their alleged participation in the scheme. Among those charged was actress, Lori Loughlin, who is most famous for her role as Aunt Becky on ABC's hit sitcom series Full House. Charges against her allege that, in order to get her children into the University of Southern California ("USC"), Loughlin paid $500,000 to have her daughters designated as crew recruits, although it is reported that they did not participate in that sport. One day after 14 parties involved in the scheme agreed to plead guilty, 16 parents, including Loughlin and her husband, were charged in a second indictment for conspiring to commit fraud and money laundering. Loughlin has refused to plead guilty and plans to fight these charges.

This post was originally published on GSB's website as a GSB client update on April 2, 2019.

On March 4^th, the Supreme Court ruled that copyright owners must wait to file an infringement suit until the Copyright Office has registered the work. The unanimous opinion, authored by Justice Ruth Bader Ginsburg in Fourth Estate Public Benefit Corp. v. Wall-Street.Com, LLC, affirmed the Eleventh Circuit and resolved a split among the circuit courts of appeal. The decision has significant implications for copyright holders and contract or legislation drafters, and comes at a time of change.

Social media platforms provide a powerful, and efficient means for brands to partner with celebrity “influencers” and reach millions with something as simple as a photograph and a few lines of text. However, as demonstrated by the recent actions initiated by the leading consumer protection agency in the United States, the Federal Trade Commission (FTC) stressing to influencers and marketers the importance of clear and conspicuous disclosure of brand relationships when promoting products on social media, these strategies are rife with pitfalls for brands and influencers, alike.[1] So, how do individuals and brands comply? There are no hard and fast rules, but the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising[2] (the “Guides”), provide a general roadmap within which to operate.