Request: For Arkstfan’s Legal take on NIL…It’s affect on G5’s & Lower P5’s …{Should each P5 & G5 school be required to report how much Industry has given each of their players each fiscal year}?

[PlummMeanGreen]

For those who may not know, @Arkstfan is a lawyer with (IMO) very balanced & sensible ideas concerning matters of the NCAA.  

Like many of you, I see NIL as an ender to the NCAA for what used to be intercollegiate amateur athletics (for the most part).
Stipends for each athlete are OK, but giving the bank away to 18 year olds is not OK—IMHO. 
 

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Edited February 17, 2022 by PlummMeanGreen

[Arkstfan]

NIL is not supposed to be paid by the school. If the school pays it, the school is now an employer and subject to state wage and hour regulations, FICA and Medicare and income tax withholding. They would need to provide worker’s compensation coverage.

Right now the NCAA has a cluster on it’s hands because they’ve failed to come up with a regulator scheme that lays out the rules.

A prime example is the boast one school made that some group was going to pay $50,000 to each offensive lineman. 

Common sense tells us that is not compensation based on the player’s name, image, or likeness because the name, image, and likeness are unknown. That’s not an NIL offer, that is an offer to play football for compensation and should be treated as such. That’s straight professionalism.

Until these outlaw deals arrived players got “full cost of attendance” the school financial aid office calculates the cost of tuition, books, fees, room, board, and incidentals such as travel, laundry and such.

Schools are not supposed to provide benefits beyond the full cost of attendance in headcount sports like football. In equivalency sports (such as track), the student can either receive full cost (ie. a full ride) or a partial scholarship. I think the minimum in Division I is either 1/4th or 1/3rd of full-cost in an equivalency sport. 

Players are required to report their deals to the school and I presume the school to the NCAA. The school can limit use of school trademarks and restrict certain categories of advertising. The school can filter and compile offers for players.

NIL is in theory a good thing for players. If fans want a Joe Smith jersey, then Joe ought to get some compensation. If someone wants to Joe to advertise sunglasses, pizza, or shoes, more power to him. 

Remember Jeremy Bloom? He was rated the #1 moguls skier in the world and had endorsement income (though I think it was mostly in merchandise with not a lot of cash) and wanted to play football at Colorado. The NCAA said you can’t have that income and endorse products while playing football. Bloom didn’t live up to his rating and finished 9th in the Olympics and that same day the NCAA ruled that he couldn’t keep the money and stuff and endorse ski products based on his skiing ability while playing NCAA football. It was a ridiculous decision. NCAA prevailed and he lost his last two years of eligibility for football. The courts upheld the NCAA saying yeah we get it that this is legit income based on skiing but if we rule in your favor, the whole thing will become a sham with players being paid to play football under the guise of being paid for something else.

The NCAA and schools have to find a way to not interfere with legitimate deals while heading off contracts based solely on paying the kid to play football.

Edited February 17, 2022 by Arkstfan

[PlummMeanGreen]

And the school who said each of their offensive linemen would get $50K was the one down in Austin. (I bet DKR is turning over in his grave with what’s going on in todays NCAA). 
 

👍Thanks, Arkstfan, you’ve come thru again.   I had misconceptions of NIL that you have totally cleared up.   Thanks.  

Still…isn’t it obvious that about 25 schools in the P5 group benefit & the rest could hang out to dry? And then the G5?😪

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Edited February 17, 2022 by PlummMeanGreen

[Arkstfan]

4 hours ago, PlummMeanGreen said:

And the school who said each of their offensive linemen would get $50K was the one down in Austin. (I bet DKR is turning over in his grave with what’s going on in todays NCAA). 
 

👍Thanks, Arkstfan, you’ve come thru again.   I had misconceptions of NIL that you have totally cleared up.   Thanks.  

Still…isn’t it obvious that about 25 schools in the P5 group benefit & the rest could hang out to dry? And then the G5?😪

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I don’t sweat the P5 doing it because it’s not like we were getting the recruits that the folks down in Austin were signing.

The G5 worry is someone has a sugar daddy with money to burn who starts spending $20,000 a head for endorsements of their business.

Here’s a fun twist to NIL. Most foreign players can’t sign them because they are on student visas that prohibit working. 

 

[TheColonyEagle]

4 hours ago, PlummMeanGreen said:

Still…isn’t it obvious that about 25 schools in the P5 group benefit & the rest could hang out to dry? And then the G5?😪

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The way I see it....it does and it doesn't. The NIL shouldn't have anything to do with the size of the school or their budget. In theory, if UNT had a T Boone Pickens or a guy that owned a bunch of car dealerships, they could pay ten 5-stars $1 million a piece to come sign autographs at their dealership. I honestly thought a school like SMU would really benefit from the new NIL. Their alumni could pay just as much as Alabama's for example. Has nothing to do with the budget of the athletic department. 

If we had some billionaire alum business owner that wanted to pay players to put their pictures on a billboard, why couldn't we do that?

[PlummMeanGreen]

16 hours ago, TheColonyEagle said:

The way I see it....it does and it doesn't. The NIL shouldn't have anything to do with the size of the school or their budget. In theory, if UNT had a T Boone Pickens or a guy that owned a bunch of car dealerships, they could pay ten 5-stars $1 million a piece to come sign autographs at their dealership. I honestly thought a school like SMU would really benefit from the new NIL. Their alumni could pay just as much as Alabama's for example. Has nothing to do with the budget of the athletic department. 

If we had some billionaire alum business owner that wanted to pay players to put their pictures on a billboard, why couldn't we do that?

I have no idea, TCE, how Wren Baker is going to handle NIL.  UNT has several multi-millionaire alums in its nest.  (With 300,000 UNT alums it only makes sense that we would, right)? 

Right now I think AD Baker is trying to raise big bucks to finish out the Athletic Center expansion that will benefit all varsity Athletes, Men & Women.  Would love to see a rendering as to what that will look like since WB tweeted months ago that it will also be tied to the South End Zone of Apogee Stadium.  
 

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Edited February 18, 2022 by PlummMeanGreen

[Arkstfan]

I think some of the mad dash to sign kids to NIL deals is going to fade. Lot of business owners are going to look at the numbers and conclude the deals just don’t produce a sufficient return on investment. So some will quit doing them. Then you are left with a few legit deals and a lot of some successful booster throwing the money to try to win. 

That’s where things get scary. What if Mr. Booster wants the 5-11 QB from his kid’s school who racked up big numbers because of the system the coach runs? Coach going to sign the kid because if he doesn’t Mr Booster might pout and not help land the guys they really want? What happens if a stud player makes Mr Booster mad and he doesn’t want to keep the money train going because he thinks the kid is disrespectful or arrogant? I suspect it’s hello portal.

The kids who build big followings on Twitter, Instagram, TikTok and YouTube can finally cash in. That’s a good thing.

Truth is few college players have any notable NIL value. Look at the NBA. We all know that there are guys with massive contracts with shoe companies and whatever, but there’s quite a few starters with pretty modest deals and lot of guys in the NBA their endorsement contract is nothing more than wear our shoes and we will give you X dollars store credit to buy our merchandise. The 11th and 12th guys on a typical roster don’t have a deal at all.

One of the first NIL deals at AState was a local pizza place signing the #2 RB which told me the owner is a fan because every game the board is loaded with why isn’t he getting more carries posts. They went for the fan favorite 🙂

[akriesman]

What a terrific piece of information, as always.    Many thanks ArkStFan.

[PlummMeanGreen]

11 hours ago, Arkstfan said:

I think some of the mad dash to sign kids to NIL deals is going to fade. Lot of business owners are going to look at the numbers and conclude the deals just don’t produce a sufficient return on investment. So some will quit doing them. Then you are left with a few legit deals and a lot of some successful booster throwing the money to try to win. 

That’s where things get scary. What if Mr. Booster wants the 5-11 QB from his kid’s school who racked up big numbers because of the system the coach runs? Coach going to sign the kid because if he doesn’t Mr Booster might pout and not help land the guys they really want? What happens if a stud player makes Mr Booster mad and he doesn’t want to keep the money train going because he thinks the kid is disrespectful or arrogant? I suspect it’s hello portal.

The kids who build big followings on Twitter, Instagram, TikTok and YouTube can finally cash in. That’s a good thing.

Truth is few college players have any notable NIL value. Look at the NBA. We all know that there are guys with massive contracts with shoe companies and whatever, but there’s quite a few starters with pretty modest deals and lot of guys in the NBA their endorsement contract is nothing more than wear our shoes and we will give you X dollars store credit to buy our merchandise. The 11th and 12th guys on a typical roster don’t have a deal at all.

One of the first NIL deals at AState was a local pizza place signing the #2 RB which told me the owner is a fan because every game the board is loaded with why isn’t he getting more carries posts. They went for the fan favorite 🙂

So what we’re looking at is that it will be the same P5 schools in the Top 10 with or without NIL, right?  So in effect—nothing has changed? 
(Great stuff, Arkstfan)

 

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[SMU2006]

20 hours ago, Arkstfan said:

I think some of the mad dash to sign kids to NIL deals is going to fade. Lot of business owners are going to look at the numbers and conclude the deals just don’t produce a sufficient return on investment. So some will quit doing them. Then you are left with a few legit deals and a lot of some successful booster throwing the money to try to win. 

That’s where things get scary. What if Mr. Booster wants the 5-11 QB from his kid’s school who racked up big numbers because of the system the coach runs? Coach going to sign the kid because if he doesn’t Mr Booster might pout and not help land the guys they really want? What happens if a stud player makes Mr Booster mad and he doesn’t want to keep the money train going because he thinks the kid is disrespectful or arrogant? I suspect it’s hello portal.

The kids who build big followings on Twitter, Instagram, TikTok and YouTube can finally cash in. That’s a good thing.

Truth is few college players have any notable NIL value. Look at the NBA. We all know that there are guys with massive contracts with shoe companies and whatever, but there’s quite a few starters with pretty modest deals and lot of guys in the NBA their endorsement contract is nothing more than wear our shoes and we will give you X dollars store credit to buy our merchandise. The 11th and 12th guys on a typical roster don’t have a deal at all.

One of the first NIL deals at AState was a local pizza place signing the #2 RB which told me the owner is a fan because every game the board is loaded with why isn’t he getting more carries posts. They went for the fan favorite 🙂

Definitely agree that there will be some burnout (especially among the lower tier P5's) when they start to analyze the ROI when they're still getting their butts kicked by the traditional blue bloods.

Other institutions, particularly those with deep pocketed alumni, will simply view NIL as a cost of doing business and won't really look at it as anything other than a necessary expense to keep up in the modern era.  SMU for example has multiple NIL platforms being run at the $1m and above donor level and several at the $500k and below levels.  Each group is coordinated in its efforts to target existing players, transfers, etc.  I know personally that giving $100/month to NIL is a far better "investment" than just handing over $100/month to the Mustang Club that will whatever they want with it.  This way I know I'm having a direct impact on the program.

 

[Jonnyeagle]

13 minutes ago, SMU2006 said:

I know personally that giving $100/month to NIL is a far better "investment" than just handing over $100/month to the Mustang Club that will whatever they want with it.  This way I know I'm having a direct impact on the program.

A valid point indeed.  I can remember one year we wanted to earmark an annual gift specifically for the new stadium.  I was told by the then AD that earmarking funds was not helpful to them and caused a lot of accounting issues.  I always thought the translation was they didn't want me telling them what to do with the money.