Assembly Arts Entertainment Sports And Tourism Committee

Okay. Good morning, Chairman Ward, members of the committee. Thank you for the opportunity to speak today, and thank you for giving student-athletes a voice in this discussion. NIL and revenue sharing are the most talked-about issues in college sports, but too often people are talking about student-athletes instead of talking with them or giving them a seat at the table. Your willingness to hear directly from those affected is meaningful and important. My name is Tyree Dillingham. I'm a financial educator. Together with NFL Hall of Famer Marshall Falk, I created a financial literacy curriculum for professional and college athletes. When I started teaching, I thought I understood the importance of financial education, but I wasn't prepared for what I would hear. Story after story from student-athletes made it painfully clear that this wasn't just about money. It was about vulnerability, exploitation, and unprepared young people trying to navigate adult decisions without support. That's when I realized we had to bring these issues into light. California created the modern NIL era. We opened the door for student-athletes to finally earn from their name, image, and likeness. But today, the landscape around them has changed faster than the protections designed to keep them safe. NIL created opportunity, but it has also created a new and unregulated financial marketplace, one where young people, some of them minors, are being targeted by predatory actors, deceptive contracts, and financial schemes that they are not prepared to navigate. Across the country, we do not have a model for financial literacy in the student-athlete space. Some states have passed laws requiring it, but even where it exists, there's no structure, no standard, and no accountability. A single workshop can check the box, even though financial literacy is a lifelong skill that cannot be taught in an hour. California recently recognized this gap and passed a law requiring every high school student to take a standalone financial literacy course. But up to 70% of Division I athletes in California come from out of state or internationally. They will never receive that high school financial literacy. A 2025 peer review study found that student athletes score lower on financial literacy than their non peers Research from Kansas State University shows athletes enter college with less financial education than the general student population And importantly students themselves are asking for help They want workshops. They want first-year courses. They want ongoing modules built into athletics programming. They want one-on-one mentorship. A 2021 NCAA-funded study and a 2019 NCAA study both found that student-athletes are asking for more structured, more consistent financial education. NIL has only intensified that need. Athletes are navigating contracts, taxes, budgeting, and business decision without the foundational knowledge to protect themselves. At the same time, their prefrontal cortex, the part of the brain responsible for judgment, discipline, and long-term thinking, isn't fully developed until around age 26. This is why teens and young adults are more vulnerable to impulse spending, peer-influenced purchases, predatory contracts, high-interest debt, and short-term rewards over long-term stability. It's not a character flaw. It's neurodevelopment. Student athletes are lacking basic budgeting skills, knowledge of taxes, rainy day funds, compound interest, credit, let alone advanced concepts like business structures, the consequences of sports betting, disability, loss of value, or endorsement insurance. We're asking young adults to make six-figure decisions with a brain that isn't fully built for long-term financial judgment yet. That's why education, structure, and support matter. Student athletes now move two, three, sometimes four times. Without a standardized model, they may receive a little education at one school, none at the next, and something entirely different at the third. At the same time, we've seen the rise of cash-advanced NIL deals, high-interest loans, and contracts disguised as marketing support. Arrangements that often function like predatory payday loans, but with fewer guardrails and far greater consequences. And the highly sensational nature of college sports, the rankings, the media, the social media attention, and the public reporting of students' NIL earnings, this already vulnerable population becomes an even bigger target for exploitation. Bad actors can watch the news and know exactly who these young people are, how much they make, and how inexperienced they are. In our assessment, only about 30% of student athletes follow a written budget. Fewer than half track their weekly spending. Confidence in banking, taxes, credit, and investment averages at about 3 to 6 out of 10. Only 40% know their credit score. These are not small gaps. These are structural vulnerabilities. In one-on-one meetings with student athletes, not a single one could clearly explain how much they would be paid, when they were supposed to be paid, whether it was NIL, revenue sharing, stipend, scholarship, or other income sources. In every meeting, no athlete understood how to read their paycheck, gross versus net, tax withholdings, any deductions or pay periods. If you can't read a paycheck, you can't verify income, identify errors, or detect fraud. Tax literacy is extremely low. Most athletes don't understand self-employment tax, quarterly payments, multi-state tax obligations, or what expenses are deductible. These vulnerabilities are not theoretical. They're happening every single day. We have parents and grandparents opening credit cards in athletes' names without their permission. Family members are withdrawing NIL earnings without permission. Scammers are posing as investors. Predatory lenders offering upfront cash in exchange for long NIL rights Some students are spending upwards of a month on food delivery or buying cars that they believe are investments not realizing the long costs And perhaps the most staggering statistic, 98% of student-athletes have been asked for money by friends or family with no idea how to manage those difficult conversations. That's not a red flag. That's a crisis. There's no model right now, no standard, no safety net. and these issues fall hardest on athletes in revenue-generating sports like football and basketball, which are largely composed of minority athletes and athletes from low-income or first-generation households. Without protection, NIL widens existing inequities instead of closing them. Even the NCAA requirement for financial literacy is unregulated and inconsistently implemented. I've seen one-off workshops run by car dealerships who give coaches free vehicles. and pay-to-play financial product companies sponsoring schools in exchange for access to athletes. That's not education. That's marketing. California has been the national standard for NIL opportunity. Now it must set the standard for NIL protection. California opened the door for athletes to earn. Now we must ensure they're not exploited the moment that they walk through it. There was a time when the life-changing moment in a student-athlete came under the bright lights of a draft stage. But now that moment comes at 18, the first financial foothold that their family has ever had. And while less than 2% will ever go pro, every one of them deserves the chance to change their trajectory. Financial education must reach them before financial exploitation does. California has led the nation in consumer protections and in NIL, and this is our chance to lead once again, to ensure that NIL opportunities become one of empowerment, not exploitation. While we cannot control the entire NIL ecosystem, we can control whether student athletes in California are prepared, protected, and positioned to win. Thank you.

First, introducing myself, my name is Brandon Copeland. I'm the executive director of athletes.org. We are the Players Association for College Athletes. We have over 5,200 college athletes from multiple sports who believe that they deserve the seat at the table that Tyree was referring to. I played 10 years in the NFL myself. When I was with the New York Jets in 2019, I went back to my alma mater, University of Pennsylvania, and started teaching a course I nicknamed Life 101. But it was about money. Since the Jets, we weren't winning. Had a little more time in the off season to go and help my community, but basically a younger version of me. How to buy a house, how to buy a car, what's your 401k, credit, all of those things that I feel like you should learn in school. But a lot of these things I had to learn about live in the NFL. And so during the latter part, I'm happy to dive into specifics and details of what our athletes are experiencing, what I've experienced, what my teammates have experienced. Because as Tyree alluded to, now, instead of you having to wait to get to the NFL to have your big moment and change your life forever, now you can do it in college. And I think that that's more than fair. but I do believe that the system has just been, I do some real estate as well and sometimes when you look at a home, you debate whether Are you renovated and tear it down to the studs or whether you rip out the foundation and start from scratch? And I think that the system that we are living in in college athletics right now is one that needs to be ripped down and start on a new foundation. And so right now you hear a lot of people describe college athletics as chaos. And a lot of those people are the NCAA and the conference commissioners and they're pushing for a lot of legislation. But let's be honest about what's actually happening. Ratings are up. Revenue is up. And the only thing that has changed is that the athletes finally have rights. They can transfer. They can earn money. And they have some level of control over their futures. So what people are calling chaos is really just a shift in power. And it's important to understand that athletes didn't actually create this system. They don't control the rules. They don't negotiate the contracts. They're not in leadership positions. They're simply navigating a system that was built without them, a system where this year alone over $270 million has been paid out to fired, released coaches. And I use the term fired because in the NFL they say we were released, and that's a nice way of saying we were fired. But $270 million has been paid out to coaches who have failed at their jobs and their responsibilities. And meanwhile, the NCAA, the conference commissioners will come and complain to Congress and complain politically that they're at risk of cutting women's sports and cutting Olympic sports. But again, you have $270 million for people who are sitting on the couch. This system was built on multibillion-dollar media deals, and we don't call that chaos. We call that business. And in that same system, that business is taking programs like Stanford and Cal and force them to leave the Pac-12 to join the ACC for money. But we don't question their loyalty. We don't criticize their decisions. We highlight the business acumen. And even as these athletes are flying across the country on Tuesday nights to play their conference games and people claim that this is about education, ultimately, we have to, again, look at this system and wonder who built it. Because, again, it wasn't the athletes. And at the center of this issue is a fundamental conflict of interest. The NCAA presents itself as a protector of athletes trying to develop student athletes. But by its own definition, if you go to its website, it says it represents the interests of its member schools and the conferences. That means the same entity that's negotiating against athletes is also trying to claim that they protect them. Multiple courts have ruled that the model that the NCAA has had violates federal antitrust law. And so the question is no longer whether change is needed. The question is, are we going to finally fix it the right way? Because we keep letting the NCAA and these conferences try to complain about the agents and complain about the collectives and complain about the rules. But they're the first to break the rules when it suits them. Or their schools, the members, are the first to break the rules when it suits them. And I can go into details later. But right now we have athletes, as Tyree alluded to, operating in a system where they have very little protection. They're signing contracts, and some of these contracts are absolutely egregious. On October 3rd of this year, one of our members, unfortunately, was given a black trash bag and told to clean out his locker, and his scholarship was going to be removed. Because at the coach's determination, and I have a presentation that has excerpts from the actual contract, if you'd like to see it. But at the coach determination his play his effort had declined That subjective And ultimately this young man is in the middle of I won say the state right now but it a school that we all know and figuring out life at this point in time because his financial package was taken away at the coach's determination to try to get a roster spot. So now at the same time, schools are paying athletes, But we're calling it name, image, and likeness. And again, applaud the state of California for allowing its athletes to earn money off their name, image, and likeness. But I always tell people, my mom gave me my name, image, and likeness. You should have never been able to stop me from earning off of that in the first place. And so the world, we kind of cheer that athletes can finally make money off of something they should have always been able to make money off of. But the problem here is when Pat Mahomes, you know, I know I'm in California right now, so let me try to think of Matthew Stafford. OK, Matthew Stafford throws he gets paid by the Rams to throw touchdowns. He's not getting paid by the Rams for his name, his image or his likeness. Matthew Stafford can go do a marketing deal with Sleep Number to get paid for his name, his image and his likeness. But right now we have the entire football team at University of Texas, Maryland, Cal, insert whatever school you want there, being paid for the value of their name, their image, and their likeness. And unfortunately, all of that payment is being done in that manner simply to dodge employment and to dodge all of the repercussions that potentially the negative and positive consequences that come with classifying athletes as employees. Because of this, the schools are now forced to try to make these contracts with these athletes adhere to marketing policies when they're really, again, pay for play and pay for performance contracts. So it puts athletes in a situation where, for example, a quarterback decides to transfer from Washington to go to another school, and the school decides to sue him saying, well, we own your name, your image, and your likeness. Well, you don't own my ability to play football. So who's right here? OK, there's a quarterback right now that transferred to Texas Tech who's suing the University of Cincinnati for Cincinnati is trying to charge him a million dollars for transferring. But he is arguing that you paid me for my name, my image and my likeness not to play football. So you can still go ahead and use my name, image and likeness if you'd like to. or you are admitting that you are violating NCAA bylaws by charging me a million dollars for transferring and going to play football because the NCAA bylaws say that I am not able to be paid for my play. So I'm sharing this, and it gets a little convoluted because it's the way the system is. But ultimately, my message today is the NCAA and the conferences, instead of calling, instead of accepting and acknowledging the talent that athletes have and the value that they bring to their institutions, the billions of dollars that they generate every single year, the NCAA is the second highest revenue producer outside of the NFL. It generates more money than the NBA and the MLB every single year. Instead of accepting that and setting up contracts and guardrails in that manner, The NCAA and those conferences have tried to dodge that responsibility, and ultimately they're leaving athletes in this broken system. And finally in order to solve this broken system this is a professional model I know that a lot of people want to call college athletics amateur but again the NCAA in 2024 did billion in revenue The NFL did $23 billion. The NBA did $12.25 billion. And the MLB did $12 billion. So this is a professional model, right? in all professional models, they have a players association whose sole job and sole purpose is to represent the interests of the players alone, to help negotiate a standard contract, to create an agency registration process, a financial advisor registration process, to hold the schools and the conferences accountable to, well, it's not conferences at the pro level, but to hold the the teams accountable to the rules that they collectively bargain together. In the college athletics landscape, there is none. And they're trying to push this SCORE Act so badly because that would ban employment forever, that would give the NCAA an antitrust exemption, that would allow them to roll back the clock, put caps on athletes, but ultimately it does not solve for the things that you're trying to solve for today. A Players Association is the best and, frankly, the way that has been proven to actually help solve for that for the long haul. Thank you.

So it depends on the school. And you can, of course, add to this, Brandon, but I think that it depends on the school. So, you know, some schools have third party entities that are called collectives where they will help manage NIL deals. So depending, like San Diego State actually has a third-party organization where, you know, if you want to engage with students, you know, have them drive your car or whatever, you know, whatever your product is. And they sort of, you can go directly to them. There are other schools that do not. So the students are receiving revenue share and from the school, which is basically like the payments, although right now it's currently lumped. Everybody calls everything NIL, but there's actually different pots of money like Brandon was talking about, but where it's NIL or rev share. Rev share is what came under the house settlement, which I think is at $22.5 million per school. Right. And then NIL is separate. So some brands will go directly to students and, you know, offer them an NIL deal directly. And then there are some schools that write into their contracts I think this is what Brandon was alluding to Correct me if I wrong is that the school says that they own your NIL And so they don allow their students to actually go do their own NIL deals

Sure.

Correct.

Can I also add on one thing too, because I know there's a lot of times, again, being a guy who's played and is teaching at the highest level as well too, a lot of times people say, well, you know, they actually, they got to read. They got to understand the contract. Be careful what you sign. And I agree. But as a 17, 18, 19-year-old, and even for me as a 21-year-old, when I went to the Baltimore Ravens, my hometown team, you put that contract in front of me. The last thing I want to do is find a reason to not sign that contract. My dream is finally coming true. And so I do believe that there is a responsibility that I'm not going to say the adults in the room because a lot of times we try to refer to college athletes as kids, and they're not. They're 18, 19, 20, 21 years old. But some of the wiser folks in the world or people who have more experience, there's probably some things that we can put in place to help alleviate the conflicts of interest that come in a multibillion-dollar sports and entertainment business that is college athletics.

Yeah, and I'm sorry to cut you off. There is a lot of those stories, and frankly, it's one of the reasons why we do this work because I think it is horrible.

Go ahead. So schools are coming in, and you mentioned the rep share opportunities, but also once you're already in, they might be approached by sort of a third-party NIL opportunity.

Definitely depends on the school. I mean, there are some schools like San Diego State is really forward thinking, right? They have, who you're going to hear from later, an athletic director who's dedicated sort of meets at the intersection of NIL and revenue share. He is very progressive about making sure students have financial literacy, and he also knows where he gets to stop. So it's like, okay, there's a tax question. I can't answer that for you. So but let me send you. So I get those students where it's like, OK, this is we have a student who needs help on this for liability reasons and, you know, school policy or whatever the case may be. I can send you to someone. But not every school. I mean, San Diego State's been highly recognized as being like on the forefront of that. But not every school is like that or has the resources or, you know, it's kind of a hodgepodge.

So I think what I'm hearing you say is like if we have a student who's enrolled in California and they get an NIL deal in New York or Texas or wherever, like where's the jurisdiction essentially? Like what laws sort of govern that? Or, you know, so afforded for the weekend, they're out of state, but the activity is happening over there. I mean, I don't, honestly, I can't say that I know the answer to that. Like if, you know, if they do something in another state, what laws do and don't apply to them in any way, shape, or form? Best we can do is, you know, make sure that we're at least tightening it up here for California purposes.

know, I mean, it, it all starts with education. I mean, even having an, you know, a players association still all starts with education and that's like the foundation of everything and making sure that they have that and, you know, making sure that that is kind of shored up before we do anything else.

law strengthened. Yeah, I would like to see standardized financial literacy, like a requirement for any students, whether it's a first year student in California or just a first year student in general, but making sure that everyone is getting the same thing. So if you start at San Diego State and you move to Sacramento State or wherever it goes, it's not falling through the cracks. Like these are the topics that we're covering. And this is what every student in order to participate in this space, you know, gets to have access to. So I think the standardization around it is critical. And like I mentioned, there's a lot of states right now who are requiring financial literacy, but there's nothing, you know, it's like Louisiana. It's like you get All student athletes have to have it, but it could be an hour long. It could be five hours long. It could be all year. You have no idea. So there's a lot of disparagement and who has access to it, what schools have resources and are able to currently fund a robust program without any structure around it. Because I think while most administrators recognize, most administrators and coaches, I've never met anyone who said, oh, we don't need financial literacy. Everyone's like, yes, okay. it's just the how and what's actually included in it so I think the the standardization the structure making sure that all students and that are covered and then you know I think that one of the really important things is around this these predatory NIL deals and making sure that because they're essentially payday loans which you'll hear about in a little bit but you know where students are being advanced money and then they're giving away their NIL rights for people who don do anything which essentially is the same as payday lenders We have pretty strict laws in California but these loans are like sometimes six figures California I think if excuse me if I wrong but I think the limit like or something that you can get in like a payday loan And so, I mean, these are astronomical loans when you look at the size of it. And so some of these contracts around the NIL, like ownership and marketing deals where they're actually then receiving portions of their revenue share but not doing anything for it. I mean, that's really important. And making sure, to your point, that our kids are covered, whether they're in California, going to school in California, or they're from California and studying somewhere else, I think that is one of the most important and critical issues. I mean, I could go on and on about all the issues that I hear, but that one to me, I mean, we protect the military when it comes to payday lending on a national level because we recognize them as a vulnerable population. This is another population that is recognized as a vulnerable population that people are targeting and much more highly publicized. So those would be my two recommendations.

put limits on eligibility rules and things like that. And my only fear in that is that there's some very unintended consequences that happen as a result of it. So if California is going to jump in, I think the best way to jump in here is to ensure that players actually have their own organization to negotiate those rules. A byproduct that I shared with folks recently was, you know, if there's a limit on the amount of times that you can transfer, which our athletes agree that there should be limits. But if the lawmakers do it for the athletes, well, then now what happens when an athlete decides to transfer, use their one transfer, go to a school, get promised $250K in a contract, and then the school says, well, we know you can't transfer. So you only got $50K. That's all we have for you. That will absolutely happen. We've we unfortunately watch it happen now, even when athletes can transfer. And so so I want to be clear. I would suggest that California does not jump in creating laws that they believe are intended to help athletes, but ultimately end up handcuffing athletes and taking away rights that they've earned in courts previous to now. And then finally, again, making sure that athletes have that players association that they can go to because that players association is not only their voice and their negotiating partner, which is led by the players today, but it's also their negotiating arm and that thing that holds the other side accountable 10 years from now, 20 years from now. Private equity is coming in the college athletics now, right? There's deals being cut. Literally, there's news about this now. And so if we thought that the conflicts between an athlete development and maybe sitting them out with that bad ankle versus hey we need you to play because we make a million dollars if we go ahead and make it to the CFP this round it only going to get worse from here for the athletes Great Thank you very much for this overview and presentation here today We like to welcome up our next panel who going to talk a little bit I think more about the student experiences

And I understand.

Okay. Great. Well, when you're comfortable writing, you can begin. Good morning, Chairman Ward and members of the committee, and thank you for having me here to testify. Tyree and Brandon did such a great job talking about the big picture. I'm going to scrap some of my comments and go right into the experiences that I've had working with Mikey Williams, who's sitting here next to me, and you will hear from shortly. So I'm an attorney by trade and I work for a venture consulting firm in New York, Oak Tree Solutions. I'm the CEO. And we work with a lot of high-level, sophisticated businesses and individuals in the real estate world and in all sorts of different walks of life. And sort of got introduced to working with athletes by accident, working with some professional athletes. And we were introduced to Mikey just in a casual conversation. I was being told about this contract that Mikey signed with his NIL rights and I said to myself, that can't possibly be true. There's no way that a contract like that should be permissible. And having experience working through the subprime mortgage crisis and working with hard money lenders and predatory lenders of all different types, I found it hard to believe that in something in an industry so big and popular as college sports, that contracts like this would be even possible. And so I was given a copy of the contract to review, met with Mikey and his family, and they told me what they believed this contract to be. And they believed that they were signing a contract that would help bring deals to Mikey, help him utilize his NIL to earn money. And Mikey had come through some difficult times in his life. I mean, Mikey was the face of NIL. He was the first person to sign a major NIL deal with Puma and his first school that he went to. And then he had a legal situation that he was able to overcome the same type of legal situation that is very common among 18 year olds that could happen. It ultimately wound up being resolved. But the time period under which it happened and when it was resolved, a lot happened in Mikey's life. And similar to the comments that Brandon stated is that Mikey signed a deal with one brand, and the school that he was going to signed a deal with a different brand. And that's part of the reason that they used to terminate his scholarship when we really know it was because of his legal situation. They didn't really have his back. But that was an interesting point because that's one of the things that Mikey experienced. But long story short, he worked out his legal situation – Um, he, he, when he, when he first, uh, signed this big NIL deal, he purchased a home with the expectation that he would be receiving a substantial amount of income. And then when that didn't come to fruition, the house went into foreclosure. So that was the first, um, thing that I, that I stepped in to try to help Mikey with. And it turned out that the house was underwater and the value of the house was, the loan was, was more than the value of the house. So we were just trying to figure out a way to just close that loop and move on. And then this NIL contract that he signed was brought to my attention, and I reviewed it, and I spoke to Mikey and his family, as I said earlier. And their expectation was that he was going to get all these different services, and they were going to be helping him with his marketing and presenting him with opportunities. And I said, okay, great. I read the agreement, and I said, you know, the agreement says the exact opposite of what you think it says. And they were surprised and shocked. I said, well, did you have an attorney review it? He said, unfortunately, I didn't. I mean, he did the best that he could. And so they advanced him $150,000 at a time that he was at the lowest point of his life. He had no money. He had a house and foreclosure. He lost his scholarship. He lost his NIL contract. He was not even sure where he was going to be playing at that time. And so they came and they advanced this money. And what did they get? They got the exclusive rights to his NIL. Not only that, in the fine print of the contract, he was required to make public appearances for their benefit under which he was not promised any compensation. He was supposed to be tweeting about products that they made deals with that he wasn't participating in. And he was supposed to give them a substantial – 25 percent of whatever revenue he would earn. And I think because of Mikey's popularity and the fact that he had previously earned such a great NIL deal while he was in high school, they assumed that they would give him this $150,000. Within a couple of months, they would get a return that would equal around 400 percent of what the investment was, depending on the timing of it. And there was a certain cap, but they had the potential to make such a large amount of money in such a very short period of time and give nothing in return. In any event, my initial conversation with the folks over at the company that had made this advance to Mikey were, well, you've got to redefine print. We're not required to do anything for Mikey, and you've got to redefine print. We're not obligated to do anything to bring him transactions, but he's obligated to pay us this money, and we want to know how he's going to pay us. And I said, well, number one, he's not making any money right now. And so even if you were to take him to court and get a judgment against him, you can't garner somebody's pay more than they have to need to live. You don't own him. He's not chattel. He's a human being that has an asset that he's developed and that he's going to hopefully be able to monetize. And they said, well, the contract says what it says. I said, well, did Mikey have an attorney? They said no. I said, well, and how is he going to fight us? I said, well, don't worry about how he's going to fight. That's what we're here for. We're going to look out for his rights. And it turns out the people that were involved in this company, one was a prominent attorney from a very prominent law firm. And I said, you know, it's interesting that you prepared a contract and presented it to a young man without an attorney. And you always know when there's a problem like that, when they have a clause in the contract that says he was offered an opportunity to meet with an attorney and he is elected not to do that and he waives any rights for not having an attorney present. If you going to put that language in a contract it means you expecting that there might be some issues that arise in the future And so when I turned it back on him and said wait you come from you know you working at this white shoe law firm And I know this is like you know a side gig that you have You weren't uncomfortable having a young student athlete that, you know, that comes from a family that doesn't have access to resources, low income family, you know, first generation, you know, having an opportunity to, you know, to earn income of this amount.

Good morning, chair and members of the committee. My name is Mikey Williams I a student athlete and I here today to share my story not because it is easy to tell but because I believe it can protect the next kid who finds themselves exactly where I was I want this legislator to understand two things what happened to me and why it should never be allowed to happen again. I grew up in Southeast San Diego, an area where violence, chaos, and survival were a part of everyday life. Basketball is my escape, and it kept me out of trouble, it kept me focused, and it kept me believing I could be more than the circumstances I was born into. I got my first basketball at 10 months old. I started playing when I was three, and by 12, I was dunking. I poured everything into the game because it was my way out, and it was the only door I could see. And then California changed everything. On September 1st, 2021, the NIL law went into effect. One month later, at 17 years old, I became the first high school athlete in America to sign an NIL deal with a major shoe company. The deal was worth $8 million, and it made national headlines. And for a kid like me, it wasn't just money. It felt like a miracle. I became national headlines again, but this time it was not for basketball. I got into legal trouble, and I found myself fired for my reputation, my future, and livelihood all at once. I lost my endorsements. I lost my scholarship and chance to play ball. I lost opportunities. I was drowning in attorney fees, and I had not saved properly for taxes. In the home I bought, that was supposed to be my escape, winning the foreclosure. I was 19 years old watching everything I had worked for disappear. and that's when the payday lending company showed up. They promised me the world. They told me they could give me marketing deals that I could not get on my own. They told me they believed in my future and said they would invest in me. I had 3 million social media followers. My NIL value was at $3.3 million. And the company said they would give me money up front and only take a small portion when they secure me deals. And that was a lie. What the company actually gave me was a predatory lending deal disguised as a marketing contract. They did not show up to help me. They did not show up to guide me. They showed up because they saw I was a vulnerable kid with a big name and no way out. I signed that contract without a lawyer. They had one from a very prominent law firm who personally called me and told me it was a simple contract and a great decision for my future. I did not understand what I had signed until years later when I met Anthony and he sent me down and explained it. Under that agreement, I did not just have to pay back the money they gave me. The contract entitled the company to a minimum 2.5 times that amount before I could even get out of the deal, and it went further. The contract required me to assign compensation tied to my name, image, and likeness directly to them first. They owned a piece of my greatest asset, which is my NIL. They positioned themselves to take a percent of everything I earned as a basketball player, including school-related payments, and returned only a portion back to me. when I told my lawyers that can't be right that even the company's own website said they would help me unlock my earning potential and help me provide opportunity. They showed me the contract and the company had no obligation to secure me a single deal. I fell for the track. And while I was losing my home, the company was using my name, image, and likeness without compensating me to recruit new athletes, raise millions from investors, and attract new victims. They wouldn't even let me credit the millions they gained to the money I owed. That is not marketing and that is not a partnership. I have thought about this a lot and I want to be honest with this committee. I take responsibility for the decisions I made. I'm not here to make excuses, but I was 19 years old. I had no financial literacy and I had no lawyers. The company sitting across from me had attorneys, experience, and a contract designed to benefit them and they told me it was simple. If there had been a law requiring legal review or the option for state-led financial literacy before I could sign I would not have signed that contract but no laws exist and that why I here It was not until I got to Sacramento State and took the NIL financial literacy that I began to take control of my money and my NIL I learned about the rule of 72 I learned what compound returns actually mean, and I learned how to read a contract. I wish I had known any of this before I was 19 and signed my future away. If the company could do this to me with my platform, my visibility, and my social media following, imagine what they're doing to kids who have none of that. kids from communities like mine, where sports is the one door that opens, where there is no safety net, no family attorney, no financial advisor, when a company with lawyers can walk in and walk out with years of your future. This is a dark side of NIL that no one talks about. Teenagers and kids without resources similar to me, navigating million-dollar decisions against companies with deep pockets and decades of experience. I am rebuilding, I am learning, and I am taking full responsibility for where I've been and where I'm going. I'm grateful to Sacramento State for giving me the opportunity to prove myself in this next chapter of my life. I'm committed to becoming better than I was before and using my experience to help ensure others don't end up in the same position I once did. California led once, and you could lead again. Give the next kid the guardrails I never had. Thank you for listening. Thank you for fighting for me and the kids who need your voice and protection the most.

Well done. Chair and members of the committee, thank you for having us here today. And much like Anthony said, you know, Mikey, Anthony, Brandon, Tyreed just have done such a great job articulating their points and my prepared statements. I feel I'd just be reiterating some of the same things that have been said. So with that, you know, I'd like it to be like we discussed a little more conversational. So, again, my name is Adam Shore. I'm the director of athletics at the University of the Pacific in Stockton, California. I've been with the Tigers and the university for almost three years now, and I felt it was important to provide an institutional point of view with regards to these topics. And again, very much overarching in agreement with everything that's said here. But in that conversational nature, just kind of share a little bit of my background in terms of why I do what we do and why most of my peers do what we do. I myself was a student athlete. I was a golfer. I played at Creighton University. and by my senior year I was burnt out. I really didn't want to play anymore. I was ready to just find the best paying job I could. Worked in private corporate America for a couple years and after a couple years of doing that grew pretty bored and not happy with my life and found that what I was missing was being back on campus, being around competition and what I feel is one of the penultimate systems of education and that's the Division I student athlete experience, a true co-curricular experience and being around that. And so I left a really good paying job to be a grad assistant making $685 a month, did that for a couple of years and rest is history, Ball State University, University of Dayton, and now the University of the Pacific. And I think it's important to note that foundationally because I do think that it is worth noting that, and I believe Anthony used the word Wild West earlier when we were meeting, and that's an absolutely great phrase for it. Our world right now is absolute chaos. I think it's a vestige of an old system mixing with the courts, which have been pretty traumatic in terms of our world as we know it. And I'll disagree with Amy one thing that Brandon had said earlier in that these court cases, whether it's NCAA versus Fontenot, House, Johnson, Alston, O'Bannon, And all these court cases, they were brought on those names who are those people. They are student athletes. They're student athletes or former student athletes that were suing for additional rights. And by and large, they have won landslide victories in those cases because, yes, the system needed to change. And I feel of 366 Division I institutions out there, most of my peers would agree that systemic failure at a very high level of institutions not willing to change with the times. And I'll go back to my personal favorite example is an athlete named Jeremy Bloom. Jeremy Bloom was an Olympic mogul, downhill skier. He was a male model on Wheaties boxes. I mean talk about name, image, and likeness. He was the poster child of somebody who could have earned a vast amount of money but was prevented to do because he was also a punt returner at Colorado. Not allowed to. That was a transformative time that institutions could say, hey, you know what? institutions should allow this young man to go out and earn a living based on this. This has nothing to do with us and his student-athlete experience, and they did not do that. The NCAA should have been and ought to have been more of a leader on transfer opportunities, that when, say, for instance, a coach leaves, whether they're fired or depart on their own, that that should open the door for a student-athlete to be able to look for a new opportunity, that that decision that they made to go to that institution, that coach was an important factor in their decision. And them not being there might lead to change. No, you can't transfer, or at least you have to sit out a year. And they buckled on that. They did not. And so what led to getting to a fever pitch of court cases that have led to, yes, a tremendous amount of freedom. It is a seller's market in favor of the student athlete right now in terms of their abilities to call their own shots on a great number of things. And that has led to, yes, in many cases, some predatory activity that has harmed a great number of young men and women out there. With that, I do feel that there is opportunity out there for the state. The state has been a leader in this space for a long time. The difficulty from an institutional standpoint is that we all compete on a national landscape. And there are a lot of legislatures out there that are weaponizing their own states to put their state in front of other states purely from a recruitment standpoint. So I'll use like Arkansas, for instance, passed a bill recently where they will not tax student-athletes in their state. They will not tax, from a state income tax standpoint, they will not tax their NIL or their rev share payments. And now it's becoming increasingly clear that this comes up often when we're talking to agents. Another thing I'll also say is in this day and age, I've gone through 42 basketball players in three years on our men's basketball roster. We have had wholesale turnover of our roster. But University of the Pacific, we like to think of ourselves as a thought leader, an institution of change in this space. We are not an A4 power conference institution. We do not have million-dollar coaches and $100 million football programs. We do opt in. We are one of most Division I schools, all but I think at 30 or so. There was only one university in the state, University of California, Davis, that did not opt in last year to additional house benefits, but they have already announced that they will opt into it this upcoming year. This gives you the ability to pay athletes directly. This gives you the ability to give additional scholarships beyond the old scholarship caps that we used to have. Once you opt in you have to abide by a number of different rules that came from the house settlement But you know that being said you know when we enter into conversations and why we are a little different because unless you spend up to the house settlement limit collectives really don exist in our world. It's only if you spend up to that limit, do third party collectives come in, because that is exempt spending from the cap that exists beyond it. So Cal, absolutely. Stanford, Absolutely. San Diego State, yes, I'm probably sure that they do. Schools like us or probably University of San Diego or University of California, San Diego, where you're at, do not deal in third-party NIL deals. And it also puts universities in a difficult situation where it is hard for us as institutions to provide financial feedback from a liability standpoint to young men and women that if we're wrong and we give them the wrong advice, there's a liability for institutions that could come from that. That being said, we do try and have always been proponents of what a coined phrase in our world is student athlete development. This is something that is back to when I was an athlete. They called them Champs Life Skills Seminars. And I remember getting career preparedness training from Wells Fargo. They even hired a couple of my teammates eventually. The traditional don't bet on it gambling education that we would get. A lot of universities, including ours, have tried to pivot this into financial literacy, into things like educating them on what their rights are as student athletes in terms of, yes, according to the student athlete bill of rights that was passed not too long ago, you do have the ability to retain your scholarship. You do have rights that you can force upon the university if you find yourself in a bad situation. Beyond that, there are mechanisms. So for instance, the tool that we use with a company called Teamworks, which is what we use to pay our athletes, the default setting on this actually sets 30% of their money aside for taxes. Now, because we as an institution, the liability I just mentioned, do not have necessarily the ability to give them financial advice. They can go in themselves and turn it off, which about 4% of our athletes have, not against our advice. They've turned that off. But 96% of our athletes do have that feature enabled. And there's also other mechanisms for financial literacy. I wholesale agree that there should be more financial literacy resources out there for students, whether they're mandatory or just provided by the state. I think that would be a tremendous advantage for California institutions in terms of a value proposition of why their representation should take seriously sending their young men to their clients to compete in California. The hardest thing, and I think the most predatory thing from my seat that I've seen is their representation. And I have every basketball player of those 42 I mentioned, many of whom we've tried to retain, unfortunately, to no avail. And God bless them. I don't wish them any ill, you know, make better lives for themselves. But they, the agents themselves, every one of them I've dealt, I've not dealt with them, I've dealt, we've dealt with their agents. They all have representation by somebody. In some cases, They're high-quality people. They're attorneys. They're probably professional agents or at least with professional agencies. There's some mechanism that I have that I can use if they try to do something untoward, and there have been some doozies. I've had agents tell me, well, I won't send my client to play for you guys unless you sign my other client which to me that seems like fraud because that client has nothing to do with this client I had agents say no you need to pay me directly because I don want my guy knowing what I taking because they taking 10 20 30 which professional leagues because there is collective bargaining they have caps 3 4 5 There's no caps. There's no regulation in our space right now. So with that, there are some obscene contracts and relationships out there. The difficulty for the institutions is they've gotten their hooks in them well before they ever cross our campuses. These are people we deal with from day one. What can the state do? There actually is already a state law on the books around the conduct of sports agents. The Miller – I had it written down here. Let's see if I can find it. The Miller-Eyala-Acox Sports Agent Act of 1996. It regulates now the conduct of agents in the professional space. They have to register with the secretary of state. They have to pay a $100 filing fee. They have to do a criminal background check. They have to show that they have a certain minimum coverage, a liability coverage available to them. This could easily be adapted to our space. and it is a mechanism that I think would be a nice tool for us to have. But again, the issue with and why I think the ultimate thing that states need to do is become a passionate advocate for a national solution. Because what will happen with most of the laws, and I think Brandon actually hinted at this earlier in his testimony, Tony, if we put laws or regulations into place that maybe are student-athlete beneficial, all that's really going to happen is those agents who, again, already have their hooks and those kids are just going to steer their clients away from the state of California because the other 49 states are going to do their own thing. There is such value in what we do in college sports. Um, the, you know, if you look at what the Tigers mean to our community, what a successful competitive sports program can do for a community, uh, what the Flyers meant to Dayton, Ohio, when I was there, Gonzaga and our, in our own conference, uh, now the PAC 12, but I've been a lifelong, uh, WCC member. You know, I've been up to Spokane a number of times. It's a nice city, not a lot of great things going on up there. that being said brand new glitzy convention center a doubling the size of their airport if you grab any civic leader in Spokane they'll tell you it's because of the Zags and 27 straight men's basketball tournament appearances college athletics can have a transformative effect on community and I want to make sure that California is getting the best and the brightest out there not just in our classrooms but on the court so I do feel that there it needs to be taken with some thought to ensure that we are still the penultimate place for student athletes to want to come and compete. But that being said, the ability for us to be able to somehow collectively bargain with athletes to find ourselves in a position to where we have as a benefit, amazing financial literacy opportunities, maybe even things like a collective pension that student athletes can voluntarily electively put money into and pool their monies together for greater returns for their future and their family's future. I think there's a ton of great ideas that the state of California can activate.

I'll say definitely being patient, and I also agree that like a financial literacy class should be mandatory because when you come from no money and you're not used to dealing with it, you don't really know what to do with it, and certain things are attractive, but it's not going to help your case. You know, I was in a situation that I didn't see coming. You never know what can happen in life. And it kind of forced me to take the loan, you know, but I wasn't advised to not do it. I was just, you know, made a decision.

Yeah, most definitely, especially with me being, having like the reach that I do have, I feel like it would be beneficial, you know, for me to help other kids that are going through the same thing. Talk about that too with your social media and some of the influencers and other activity

It's definitely new. And one thing about like the younger generation, they look up to like us college athletes right now, even like some professional players. And I think we just have a very big impact on them. And I think that we could definitely be used the right way instead of taking advantage of. I'm all about helping the community and helping the kids.

How many signs did he happen to – he was 18.

Please. is that they were able to use his NIL for their own purposes, his NIL, without compensating him. And we subsequently found out that they went out to private equity to raise money, and Mikey was literally the face of their investor's debt. And so one of the comments we had was, how come he's not being compensated for that? You're using it. That alone should – you should – and we did a valuation, a back-of-the-napkin valuation. but just by them using him to recruit other athletes, using his name and image and likeness and his story to recruit other athletes and using him on their investors deck alone should negate the loan, plus a return for them, a fair return for them. But they don't, they didn't look at it like that. They actually, they act as if, you know, they, they literally own his ability to earn money and it's just, you know, inequitable.

applicable or needs to be strengthen under contract law to be able to buffer against some of these situations? I think it needs to be strengthened because the actual contract, if you read it, favors their side. And taking it in a vacuum, they're right under what it actually says in the contract. Our issue was what we believe was fraud in the inducement to sign, the lack of the education, and then the lack of legal representation because these little – the terms in this agreement could have easily been negotiated in a fairer way. And so it's interesting in this case. I don't want to come in too much because it could potentially become a litigation. But it's interesting that they have not commenced litigation against Mikey because I don't think they want this to be highlighted because there's a potential class action aspect of it, as well as there may be students that don't even realize that they were taking advantage of, and maybe they think that this was a great thing, not understanding the full value of it. But Mikey's in a unique situation because of his history and really being the first student athlete in the United States to sign an NIL deal. And they use that in their recruitment because all the young athletes saw the stories about Mikey. And wait, if Mikey's there, then we should go there. That's got to be the place to go.

I did not speak about that.

Yeah, it's – the house settlement was something that – there's obviously a couple components to it. One was the damages that were being – that have to be paid out by all the member institutions. That was one part of it. The other part was the opening of the doors of institutions to be able to deal directly with athletes in terms of compensation. That was one of the biggest changes, and people like to conflate name, image, and likeness with revenue sharing. Revenue sharing is the institutions entering into agreement. So all of our probably, I'd say, 40 athletes of our 400 that actually get some kind of compensation above and beyond Alston money or cost of attendance, they get their deals directly with us. We negotiate those deals. We put a contract in front of them that they sign. Those relationships are 50-50. You know, half of our student-athletes of that 40 or so have tremendous representation. They are pros, right? They are attorneys. They're financial advisors, certified people that have associations and governing bodies that they have to adhere to. They have rights and principles that they have to be mindful of. Otherwise, they can get dragged in front of a bar association or the NBA Players Association or things like that. Half of them are just upjumped grassroots coaches, people that have wormed their way from a young age into these young men and ladies' lives and bizarrely just ask us questions that are like, how are you asking me this question? You are the one who should be providing that information to your client. Like what – clearly you don't know what you're doing. And again, those are the ones that are taking the most egregious cuts of their money and have been asking for, as my women's basketball coach puts it, the blue chips kind of stuff. That just like hey we not going to enter into those kind of relationships where we going to pay you directly because it part of your MO that you don want your clients to know how much money you taking from them So you know pay him that money and then sign a separate deal with me and pay me directly There actually an incidentally rule that's been passed recently that prohibits that kind of behavior. But, you know, for the most part, I think that they are, it's the hardest thing is the transfers. You know, there is a culture that's been kind of born now that in order to, as someone, I'll use the phrase that my athletes use when I talk to them and they let me know that they're leaving, is chase the bag. And I understand it. I get it. I mean, this can be transformative wealth. And at an institution like Pacific, I can only give them so much. And I don't begrudge them one bit. We want them to stay. The thing I struggle with is, and this isn't just student-athletes. This is all students. There is an issue nationally in education around transfers and what credits an institution will take and not take. Every time a student transfers, roughly 30 percent of their credits don't come along with them. There's an NCAA rule that is referred to as progress towards degree. We have to show that they are making progress towards actually attaining a degree. Before progress towards degree existed, students would just come in and take a bunch of electives. They get done. Their eligibility is done. They're done playing, and they don't have a degree because they never actually were working towards an accounting degree. or a finance degree, or a biosciences degree. So now they actually have to show progress towards a degree. Unfortunately, every time they transfer, they lose credits. And every time they transfer, if they're doing four or five institutions in a four or five year, six period, I have seven men's basketball players that are done playing this year.

Well, I got a couple of new good ideas off of this panel as well, too, on representing – do you have a quick – one final thing, Chairman. You had mentioned the house settlement, and although I didn't mention in my comments, through working with Mikey, Tyree, and I, and Sophia, who's sitting here, we connected with Brooklyn Law School's sports clinic, which is working with all major law firms in New York City to help students that can't afford to defend themselves against these bad actors. And on the house settlement, what's happening now, and we're going to probably be hearing about, is these same bad actors are finding out the students that are eligible for those payments over a lifetime and offering them a fraction of it up front and then taking the right to collect that money over time. And many students are taking advantage of that because they want the money up front. that's an industry that, you know, a practice that is also going to be probably, you know, widespread. It's going to, there's going to be publicity and I think there's going to need to be some regulation around that. I appreciate that. I appreciate all three of you for your testimony here today. And we're going to move on to our third panel right now that I think is going to be able to help us get into some overview of potential solutions and best practices on how to address this issue going forward, but got some good ideas off of you too. So we'll note those down and talk with the committee about opportunities to strengthen the law. Thank you. Thank you. So we'd like to welcome up for our third panel from my home district. We've got Sloan Benshoff and Brendan Hill from San Diego State University. Good morning. Good morning. I'd love to hear some of your thoughts on policy recommendations.

Thank you, Mr. Hill.

Thank you, Sloan, and I appreciate the recommendation. I think we're coming full circle as well about, you know, exactly what the needs are out there. But, you know, thank you as well for your personal testimony that I think encapsulates, you know, a really positive experience about how all of this support infrastructure there is making it work for you. And would you characterize, would you go a little further? How do you feel like this is setting yourself up for post-college life for these financial skills?

Do you ever talk about the value or, you know, valuation or revenue sharing or endorsements? Is there starting to become a little bit more of a common sense about how to have each other's back and what people should be asking as they're, you know, getting approached?

Yeah, and the same question I asked for Mikey too. What are you seeing in the social media or kind of other online or influencer space as a mechanism for either monetizing your NIL or creating new opportunities, I guess, to be able to find new partnerships for you or any of your peers at SDSU?

things we've got to think and get ahead of as well. Brendan, for your perspective, as you've seen NIL, like, and especially the explosion of activity that we're seeing right now, how do you, how might you characterize, or are you seeing, you know, the student experience kind of go from something that maybe a decade or more ago was, you know, really about a love of a game and professional development as opposed to maybe not necessarily going pro but you know that into the college experience to something now that might be just all about the bottom line

Got it. And then talk about the sort of experience with the students that you're working with right now when you have a rev share experience or rev share agreement there. how do they actually at what point do they receive their share? Yes. And do you provide any stewardship over that throughout the course of their their student status?

I know there was a comment made, and Brandon, I can agree to disagree a little bit about what a person's NIL is.

I really appreciate that I want to thank you both for your testimony and coming all the way up to the capitol as well and in particular for being able to highlight the you know a really positive student experience, a really positive and hopefully model program that we have as well. As university, you had one final?

will happen the most. Really good point. Thank you for adding that on. We are going to, I want to thank you again for this third panel. We did have a third panelist that was not able to be a part of this today, but I'm going to actually let him maybe virtually open up our public comment period. And following this video from Dr. Luke Wood, I believe, we don't have it? No, we do have it. Great, because I wanted to be able to use that. We'll go ahead and open up the public microphone as well too for any members of the public that wish to make a statement to committee today. So if I could ask our tech to switch it over.

Thank you for that. If there's any other members of the public that wish to address the committee for public comment on the record. Feel free to approach the microphone. And seeing none, I guess we'll go ahead and close public comment. I wanted to again thank Ms. Dillingham in particular for being able to help bring this issue to committee. And I know earlier this year we had good discussion about your observations and the need for both shining a light on it That what we were able to do today and think about the solutions And many of the panelists have offered some really good things to look at too for strengthening the law and the support to be able to provide equity for student athletes across all of California. So really appreciate all the organization that went into this today, and we'd love to be able to keep in touch as we think about our next steps and action items. With that, we are going to conclude this information hearing. I want to thank all for attending today, and we will be adjourned. Thank you.