College Athletics Enters Revenue Sharing Era

[sbillini]

A private business/entity will be under no directive to need to voluntarily hand over financial data or even who they pay.

Do NIL sponsors agree to some sort of governance with the NCAA (or whatever entity is running this) in order to be a part of NIL. I don't believe so, but not 100% sure. if that's not the case, then yea, good luck enforcing this. Some employee from Deloitte going to be knocking on Twin City Radiator's doors and asking to see financials and the owner laughing and offering him car repair shop waiting room coffee.

 

[RabidDawgClassic]

Do NIL sponsors agree to some sort of governance with the NCAA (or whatever entity is running this) in order to be a part of NIL. I don't believe so, but not 100% sure. if that's not the case, then yea, good luck enforcing this. Some employee from Deloitte going to be knocking on Twin City Radiator's doors and asking to see financials and the owner laughing and offering him car repair shop waiting room coffee.

I don’t believe they do, and while IANAL, even if they did I don’t believe that would be a legally enforceable agreement if two entities agreed to what would essentially be restraint of trade. It’s why the NCAA has lost so many lawsuits already. In Twin City Radiator’s case, I don’t see why they would even have to contact the school, except out of courtesy, if it’s owners want to pay a player for whatever service they dream up. Even with revenue sharing the players aren’t classified as employees, so the university would seemingly have a very thin leg to stand on restricting a player from accepting endorsements - real or otherwise.

 

[Pikeillinifan]

So, now that there is a rev share, doesn't this just mean NIL funding will (most likely) stay the same, but there will be an extra $16M+ (out of the $20M+) thrown into the football and basketball pools, just driving salaries up vs leveling the field?

 

[the juiceman cometh]

I don’t believe they do, and while IANAL, even if they did I don’t believe that would be a legally enforceable agreement if two entities agreed to what would essentially be restraint of trade. It’s why the NCAA has lost so many lawsuits already. In Twin City Radiator’s case, I don’t see why they would even have to contact the school, except out of courtesy, if it’s owners want to pay a player for whatever service they dream up. Even with revenue sharing the players aren’t classified as employees, so the university would seemingly have a very thin leg to stand on restricting a player from accepting endorsements - real or otherwise.

The NCAA would not have any way of obtaining information from a third party, other than by consent. But my guess is they would enforce any doubt about an agreement against the player, as a way to obtain information from interested third parties. If a booster pays NIL to a player, the last thing that booster wants is for the player to be deemed ineligible because they couldn't provide the NCAA information to justify that NIL agreement.

This is not to say I think the NCAA can successfully strictly enforce NIL. I don't. I just don't think the problem will be in getting third parties to provide info. I think they'll be fine there, as the third parties want the players to play and the lack of reporting on an NIL deal is actually going to be the easiest way for the NCAA to justify denying eligibility. The question is, once the NCAA gets the info, will they be able to do anything if the NIL deal looks "fishy." That's where I think the enforcement is going to fall flat. As long as a player does something to justify an NIL agreement, I doubt the NCAA will have firm ground to raise any objections.

 

[Grandpa]

So this eliminates the collectives? How can an entity that exists only to collect money to pay players to come to a school justify as NIL?

 

[Oldskoolkoach]

I'm hanging onto college sports by a thread. The illinois seating reset, NIL, and now this. Its all about the money, whereas college sports used to be about showing out to get to the pros, or get a degree when most would not have had a chance before.

To make sure I'm correct:
1. This is in addition to NIL
2. Do all d1 schools (Eiu, Isu, etc) get the same amount?

 

[sbillini]

The question is, once the NCAA gets the info, will they be able to do anything if the NIL deal looks "fishy." That's where I think the enforcement is going to fall flat. As long as a player does something to justify an NIL agreement, I doubt the NCAA will have firm ground to raise any objections.

I 100% agree on the "something" element, but wouldn't violating the settlement agreement be where NCAA has leverage?. Let's say Shahid Khan cuts a $1M check to twin city radiators and the next day Twin City Radiators gives Luke Altmyer $1M to do a 1 hour autograph session at the store. If the NCAA (or whomever) is able to follow that paper trail, wouldn't that be a violation of the settlement agreement? They could go after UIUC for that, no (now, assuming they have the spine to do that is a whole other question)?

I agree that there's a whole boatload of grey areas that will be exploited and the above example is probably too egregious to probably ever occur, but having access to the paper trail is how any of this would be proven.

 

[the juiceman cometh]

I 100% agree on the "something" element, but wouldn't violating the settlement agreement be where NCAA has leverage?. Let's say Shahid Khan cuts a $1M check to twin city radiators and the next day Twin City Radiators gives Luke Altmyer $1M to do a 1 hour autograph session at the store. If the NCAA (or whomever) is able to follow that paper trail, wouldn't that be a violation of the settlement agreement? They could go after UIUC for that, no (now, assuming they have the spine to do that is a whole other question)?

I agree that there's a whole boatload of grey areas that will be exploited and the above example is probably too egregious to probably ever occur, but having access to the paper trail is how any of this would be proven.

The settlement is between the class (NCAA athletes) and the NCAA and major conferences. UIUC is not a party to the lawsuit, and the settlement, except as a member institution of the NCAA and Big Ten. So it wouldn't work like that. To the extent the NCAA's has leverage over UIUC, it has nothing to do with the settlement and everything to do with it's status as a member institution, which has always been the case.

The settlement agreement allows for the NCAA to set certain rules and restrictions for NIL. It's basically the players saying the NCAA can set rules and players will be bound by them. The question though will be on enforcement of those rules. If Shahid Khan's $1 million check is an investment in a company, and the company then uses the injection of funds for advertising purposes by having Luke do an autograph session, then can the NCAA legally restrict that? I certainly don't think they can prevent Khan from investing his money however he sees fit. But perhaps they can restrict Altmyer from accepting the money. The thing is it's going to be hard to determine where to draw the lines in a consistent manner. A secondary question is, if the NCAA cries foul on a given deal, what is the result? Is Luke ineligible? Does he have to return the money? Does the NCAA make a market value determination and have Luke return the remainder?

 

[sbillini]

The settlement agreement allows for the NCAA to set certain rules and restrictions for NIL. It's basically the players saying the NCAA can set rules and players will be bound by them. The question though will be on enforcement of those rules. If Shahid Khan's $1 million check is an investment in a company, and the company then uses the injection of funds for advertising purposes by having Luke do an autograph session, then can the NCAA legally restrict that? I certainly don't think they can prevent Khan from investing his money however he sees fit. But perhaps they can restrict Altmyer from accepting the money. The thing is it's going to be hard to determine where to draw the lines in a consistent manner. A secondary question is, if the NCAA cries foul on a given deal, what is the result? Is Luke ineligible? Does he have to return the money? Does the NCAA make a market value determination and have Luke return the remainder?

Ok, so not UIUC, but Luke Altmyer himself is who the NCAA would go after, right? By being an NCAA athlete, he's assumedly agreeing to play by their and the Big Ten's rules (the signatories to the settlement). If their rule is Shahid Khan can't cut a $1M check for a 1 hour autograph session (or whatever that rule looks like), they can declare him ineligible, and if Altmyer takes the NCAA/Big Ten to court, the defendants have this (court approved) settlement to hold up the validity? Regardless of what the NCAA wants to do, they'd need the paper trail to prove anything.

Obviously all the above assumes the NCAA and BIg Ten actually want to enforce their own settlement (which kind of goes to your original point - but more around wanting to enforce it vs. being able to enforce it), which i can see many reasons why they don't in this case. Don't know how that works.

 

[PepeSilvia]

How do you get a paper trail though if you have no real regulatory authority?

I don't even think they can get access to a players bank records to know how much money they receive. They used to catch people because the players were being paid illegally and the FBI would get involved.

How would the NCAA know if Twin City Radiators paid someone 100k or 1k? All they would the player had an autograph signing that they were likely paid for.

 

[PepeSilvia]

I 100% agree on the "something" element, but wouldn't violating the settlement agreement be where NCAA has leverage?. Let's say Shahid Khan cuts a $1M check to twin city radiators and the next day Twin City Radiators gives Luke Altmyer $1M to do a 1 hour autograph session at the store. If the NCAA (or whomever) is able to follow that paper trail, wouldn't that be a violation of the settlement agreement? They could go after UIUC for that, no (now, assuming they have the spine to do that is a whole other question)?

I agree that there's a whole boatload of grey areas that will be exploited and the above example is probably too egregious to probably ever occur, but having access to the paper trail is how any of this would be proven.

How do you get a paper trail though if you have no real regulatory authority?

I don't even think they can get access to a players bank records to know how much money they receive. They used to catch people because the players were being paid illegally and the FBI would get involved.

How would the NCAA know if Twin City Radiators paid someone 100k or 1k? All they would the player had an autograph signing that they were likely paid for.

 

[Curbelo Fanboy]

it won’t be hidden like before , as there is nothing stopping wealthy boosters or corporations from paying endorsements or other fees to players directly .

there will be two separate worlds in college sports . in due time , it will become official . perhaps a few schools in G5 can transition up . the new PAC league is lower level .

the NIL issue will eventually basically solve itself . the larger issue is eligibility and transfer portal . players will really need to become employees so that there can be collective bargaining & rules and money caps can be written and enforced . The NCAA as it relates to big time football will no longer be around .

it’s pretty sad for most of us longtime fans

I am thinking within 5 years the football and basketball programs will basically go to an employee type of model. Go to class and get a degree if u want but not a requirement to play for the school. It is essentially minor league baseball from here on out. Will have serious long term consequences imo.

 

[the juiceman cometh]

Ok, so not UIUC, but Luke Altmyer himself is who the NCAA would go after, right? By being an NCAA athlete, he's assumedly agreeing to play by their and the Big Ten's rules (the signatories to the settlement). If their rule is Shahid Khan can't cut a $1M check for a 1 hour autograph session (or whatever that rule looks like), they can declare him ineligible, and if Altmyer takes the NCAA/Big Ten to court, the defendants have this (court approved) settlement to hold up the validity? Regardless of what the NCAA wants to do, they'd need the paper trail to prove anything.

Obviously all the above assumes the NCAA and BIg Ten actually want to enforce their own settlement (which kind of goes to your original point - but more around wanting to enforce it vs. being able to enforce it), which i can see many reasons why they don't in this case. Don't know how that works.

The settlement very likely won't have all the rules in it. As far as I can tell, it'll just grant the NCAA the authority to make rules, and set forth some parameters for the rules. The settlement can't govern every scenario. That's where the rules come in. Of course, those rules can still be challenged for a number of reasons, such as "that's not what the rule actually says, or "that rule isn't actually authorized by the House settlement," and "that rule is illegal and therefore unenforceable."

Think of it like how the Constitution doesn't say anything about smuggling heroin, but smuggling heroin is very clearly against laws enacted Federal government, which has the authority to enact such laws because of the Constitution.

 

[Curbelo Fanboy]

I read the ruling as 20.5 million salary cap from example OSbuckeyes. Then their booster will add another 25 million for NIL. Thus, Ohio state having a 50 million dollar roster. Texas, OMG 60 or 70 million when done. College athletics is officially dead, soon to follow smaller conferences and schools. I support athletes making money. This is not remotely close to being good for the brand nationwide.
I'll look forward to MWC and Pac? whatever moving down and competing for a nattty in new lower division.

I posted separately that I think the football & basketball is heading to an employee type of model for the top division. The "mid majors" will drop off to form a division 1AA kind of model. Maybe some D2 schools & current FCS schools move up together & form a division that is more along the lines of the student athlete model minus the $50 million payroll for football rosters. A few real good basketball only schools (Gonzaga, Nova) will be able to hang around in the top rung but a whole lot of the rest will either not be able to or decide that it's just not worth it.

In the old days the D1 lesser likes (power 5 bottom feeders & high level mid majors) at least had the thought that they could someday compete & sometimes those programs would rise up. Gonzaga in hoops & Boise in football as examples. With this new model, I don't see how new versions of programs like those will be able to rise up over time (minus a filthy rich guy that funds NIL) & will just decide it's not worth even trying. Kinda like some of the bottom feeder MLB teams that know they will never compete in the free agent market so just perpetually draw 3,000 people a night to their games. These schools could "drop down" & be more competitive in a more realistic financial environment.

 

[illinistephen]

For comparison sake, Ohio State athletics had 2023 revenue of $279.5M and the LA Kings had 2023 revenue of $279M. But college sports will have a $20.5M salary cap versus the 2022-2023 NHL that had an $82.5M salary cap? As long as the max cap that colleges are allowed to pay is well below what the market would come to on its own I think that under the table payments or using NIL as pay to play are inevitable even if they are officially against the rules.

 

[RabidDawgClassic]

Ok, so not UIUC, but Luke Altmyer himself is who the NCAA would go after, right? By being an NCAA athlete, he's assumedly agreeing to play by their and the Big Ten's rules (the signatories to the settlement). If their rule is Shahid Khan can't cut a $1M check for a 1 hour autograph session (or whatever that rule looks like), they can declare him ineligible, and if Altmyer takes the NCAA/Big Ten to court, the defendants have this (court approved) settlement to hold up the validity? Regardless of what the NCAA wants to do, they'd need the paper trail to prove anything.

Obviously all the above assumes the NCAA and BIg Ten actually want to enforce their own settlement (which kind of goes to your original point - but more around wanting to enforce it vs. being able to enforce it), which i can see many reasons why they don't in this case. Don't know how that

The way I see this possibly playing out in this hypothetical scenario.

1. Shahid Kahn “invests” $1 million in Twin City Radiator.

2. Twin City Radiator uses that “investment” to sign Luke Altmeyer to five autograph sessions.

3. Deloitte looks at the deal and says “uh, we reject this. $200k per session is unreasonable.”

4. Twin City Radiator and Altmeyer say “okay, how about ten autograph sessions?”

5. Deloitte says “nope, sorry.”

6. Twin City Radiator says “sorry, Luke” while Luke says “no worries… I’m gonna sue for restraint of trade.”

7. Luke wins his lawsuit because if someone was willing to pay him $1 million dollars, it’s quite clear that $1 million is Luke’s fair market value.

8. Twin City Radiator signs Luke to one autograph sessions for $1 million (no need to do five anymore).

9. Kahn says “NOW GIVE ME MY HONORARY DEGREE, DAMMIT!!”

 

[the juiceman cometh]

The way I see this possibly playing out in this hypothetical scenario.

1. Shahid Kahn “invests” $1 million in Twin City Radiator.

2. Twin City Radiator uses that “investment” to sign Luke Altmeyer to five autograph sessions.

3. Deloitte looks at the deal and says “uh, we reject this. $200k per session is unreasonable.”

4. Twin City Radiator and Altmeyer say “okay, how about ten autograph sessions?”

5. Deloitte says “nope, sorry.”

6. Twin City Radiator says “sorry, Luke” while Luke says “no worries… I’m gonna sue for restraint of trade.”

7. Luke wins his lawsuit because if someone was willing to pay him $1 million dollars, it’s quite clear that $1 million is Luke’s fair market value.

8. Twin City Radiator signs Luke to one autograph sessions for $1 million (no need to do five anymore).

9. Kahn says “NOW GIVE ME MY HONORARY DEGREE, DAMMIT!!”

Yep, essentially this.

If you think the Courts dislike the arbitrariness around eligibility waivers, just try to imagine the arbitrariness that will result from the NCAA (through Deloitte) trying to pin down each player's "fair market value," and how the courts will view that.

 

[sbillini]

Yep, essentially this.

If you think the Courts dislike the arbitrariness around eligibility waivers, just try to imagine the arbitrariness that will result from the NCAA (through Deloitte) trying to pin down each player's "fair market value," and how the courts will view that.

But didn't a court just bless this by signing off on this settlement? Part of the settlement is establishing limitations on what constitutes NIL, no?

 

[Calvin]

I don’t believe they do, and while IANAL, even if they did I don’t believe that would be a legally enforceable agreement if two entities agreed to what would essentially be restraint of trade. It’s why the NCAA has lost so many lawsuits already. In Twin City Radiator’s case, I don’t see why they would even have to contact the school, except out of courtesy, if it’s owners want to pay a player for whatever service they dream up. Even with revenue sharing the players aren’t classified as employees, so the university would seemingly have a very thin leg to stand on restricting a player from accepting endorsements - real or otherwise.

I also don't see an enforcement body getting into the weeds of the contracts. Anyone who's worked with business contracts can tell you they can be very complex, hold many contingencies, and be difficult to value, other than a stated estimate. My guess, and it's pretty speculative at this point, would be the CSC or whatever sub-entity winds up with enforcement, simply requires the athletes to attest it's for NIL, or specify to some degree what the athlete is doing for it. The amounts are going to be irrelevant. For example, if I sign an NIL for signing autographs, the amount isn't going to have any comparison to say, Tom Brady doing it. They won't be able to police it from that standpoint IMO.

 

[the juiceman cometh]

But didn't a court just bless this by signing off on this settlement? Part of the settlement is establishing limitations on what constitutes NIL, no?

The court blessed the terms in the agreement. My understanding of the agreement is that it does not contain the eventual rules/guidelines we're talking about (which will likely be many pages long and subject to ongoing revisions).

The court did not bless every rule the NCAA will make in the future, nor did it bless any specific applications of those rules.

Taking your example from earlier, at no point was the judge confronted with the specific scenario in which Khan paid Twin City Radiator $1 million so it could turn around and pay $1 million to Luke Altmyer, and then the NCAA ruled that payment a violation.

 

[sbillini]

The court blessed the terms in the agreement. My understanding of the agreement is that it does not contain the eventual rules/guidelines we're talking about (which will likely be many pages long and subject to ongoing revisions).

The court did not bless every rule the NCAA will make in the future, nor did it bless any specific applications of those rules.

Taking your example from earlier, at no point was the judge confronted with the specific scenario in which Khan paid Twin City Radiator $1 million so it could turn around and pay $1 million to Luke Altmyer, and then the NCAA ruled that payment a violation.

Agree that the details haven't been figured out, but it seems like the settlement does lay the framework for the NCAA/Conferences to establish some guidelines on how NIL can be structured - specifically to prevent the Khan/Twin City motors scenarios from happening. What exactly it ends up looking like (and whether it'll be at all effective) is still an open question - but it seems like an Altmyer suing the NCAA and winning on a simple restraint of trade argument is off the table.

Per ESPN

The settlement gives the schools power to create new rules designed to limit the influence of boosters and collectives. Starting this summer, any endorsement deal between a booster and an athlete will be vetted to ensure it is for a "valid business purpose" rather than a recruiting incentive.

I still go back to my original point, though. It's still going to be hard to enforce if you can't get Twin City Motors to disclose the paper trail, and I don't think they have any obligation to. Maybe you could put the onus on Luke Altmyer and subpoena Twin City to disclose those financials if you went that route.

 

[JKR]

10. Faculty says, "Forget about it Shahid, you dirty capitalist."

 

[STL Illini]

Why would Twin City Radiator even pay Luke? Look at all the free advertisement they’re getting in this thread.
I for sure would think of them if I ever need a new radiator when I’m in CU.

 

[RabidDawgClassic]

Why would Twin City Radiator even pay Luke? Look at all the free advertisement they’re getting in this thread.
I for sure would think of them if I ever need a new radiator when I’m in CU.

Yeah, but if Twin City Radiator doesn’t pay up, Huey’s or Jumer’s Castle Lodge will come along and shell out the cash. Then all of the sudden everyone’s taking about them and Twin City Radiator is all but forgotten. That’s just the cost of doing business in the NIL era.

 

[sbillini]

Yeah, but if Twin City Radiator doesn’t pay up, Huey’s or Jumer’s Castle Lodge will come along and shell out the cash. Then all of the sudden everyone’s taking about them and Twin City Radiator is all but forgotten. That’s just the cost of doing business in the NIL era.

But is jumers castle lodge good enough to get shahid khan his honorary degree? IMO, he needs to go the reputable local
Mechanic route…it’s the only way