NIL Thread (Name, Image, Likeness Rule)

[TheGMan]

And, I should probably clarify, this was in regards to the NCAA placing barriers. They are 100% eligible to make money off their NIL. Now they still cannot do something illegal or promote illegal activity.

So I want to preface my post by saying that I am all in favor of players getting paid and profiting off of their NIL.

However, I just read Alston over my lunch break. It does not say that there are zero restrictions that the NCAA can put on players profiting off of their NIL. In fact, Alston does not even address this issue. The only issue that it addressed is whether the NCAA could limit education related payments to athletes, and the Court unanimously decided that the NCAA could not limit education related payments. The restrictions that the NCAA had on non-education related payments was not before the Supreme Court, so it did not make a ruling on that. It left in place whatever restrictions the NCAA had on non-education related payments.

But the ruling did lay a groundwork for how restrictions on non-education related payments (i.e. NIL) could be challenged in the future. So the NCAA then voluntarily changed it's rules on NIL compensation. So as of right now, whatever restrictions the NCAA has on NIL payments are not against any Supreme Court ruling. They certainly could be challenged in the future. And based on the analysis in Alston, the Court would probably strike down restrictions on non-education related payments. Though it is important to note that only undue restrictions are banned by the Sherman Act. So it is possible that the Court would allow NIL payments, but allow some restrictions on them. It's also important to note that the Alston opinion laid out a few ways that the NCAA made terrible arguments. So the NCAA could learn from their mistakes and make better arguments, which could effect the eventual outcome.

And just to confirm my analysis, here is the Harvard Law Reviews take on it.

https://harvardlawreview.org/print/vol-135/ncaa-v-alston/#:~:text=Shortly%20after%20the%20Court's%20decision,%2C%20and%20likeness%20(NIL).

And I thank you all for coming to my TED talk.

 

[FrankNitty30]

I understand what you’re saying and I agree with you, but for clarity, there is no “legal standpoint” per se between the school and the NCAA. There’s only rules and compliance. The legal aspect would be handled in civil court, in which the player would file suit against the school and (most likely) the NCAA. Historically speaking, the NCAA has passed itself off as judge, jury and executioner when, in reality, it’s merely been a legal paper tiger.

Yes, perfect description.

 

[BryceHopkins]

I am a co-founder of a Collective. I wish it was University of Illinois, but alas, I live nowhere near Champaign. I will say that the Illini Guardians as well as the ICON collective are seen EXTREMELY favorably in the world of collectives.

With that as the background, I will attempt to answer some questions.

1. The University can have EXACTLY ZERO involvement in facilitating a deal between an organization, business, individual, etc,

1A. A school can have an NIL compliance person who can help the student to understand tax implications, does a deal meet quid pro quo, does it stay away from illegal activities, etc.

2. Technically, a school is not even to know what the deals are worth. Now, we all know, and the NCAA knows that the schools know exactly what every kid gets. They are choosing to turn a blind eye. But, the only way a school should know anything about the financial arrangement is if the student tells them about it.

2A. These deals are the negotiated agreement between an entity and the perceived value of the individuals NIL influencing power. If an entity chooses to tie that to a school specific thing, AKA Coleman Hawkins pitching something because “ALL ILLINI drink/eat/play/whatever here, that is up to the business. Probably a good decision in that regard. But, it in no way has to be nor is it required for payment that it be Illinois specific.

3. Quid pro quo. Here is where it can get sticky especially if a kid leaves and the collective did not set up the deal very well. An athlete must DO SOMETHING. It cannot be something that they will do in the future, and then they are paid up front.

3A. So let’s use Skyy as an example. If he was paid $100,000 for 4 events he was going to be at, cool. But, if he was paid up front, that was very stupid on the collectives part, as well as technically illegal because no quid pro quo happened.

3B. Here is where it gets a little trickier. The Quid pro quo stuff is an NCAA rule that punishes the school. In the above scenario, Skyy does not HAVE TO do anything to keep that money.

3C. The contracts themselves need to be airtight to protect the collective, which in turn keeps the school out of trouble. But this is not always the case.

4. FaIr market value. This is is the bugaboo of all of this. What is fair Market value? What is appropriate. A majority of time FMV is looked at as insuring that a person gets ENOUGH of what they deserve. But this is flipped upside down with NIL. Now the question is “what did the do (QPQ) to get THAT (FMV)? So far this is the Wild Wild West. I sat in on a collective call (anonymously) with the KU collective and the Williams fund donors. These are the big guns of KU athletics. Bill Self, Lance Leipold and Coach Schneider were talking about all kinds of stuff. Leipold and Schneider were kind of rolling with the punches trying to figure some things out. Self was way ahead of the game. He starts calling out specific donors and saying stuff like “If you Donor X want to pay Gradey Dick $500,000 to come to your grandsons birthday party, you can do that.”

Now is that FMV? I think most prudent people would say, well, that is a little excessive. However, if a piece of art comes up for sale and someone is “willing to pay” $1 million…. then that is the value it holds for THAT person. Thus, in that market, at that time, with that buyer….. it is acceptable.

Once again, as with quid pro quo, FMV is an NCAA construct, but only applicable on the institution side. No penalties for the athlete as they are not capped on their earning potential of their NIL.

The real crappy thing with this is that the schools are most definitely guilty until able to prove innocence. If allegations are brought against the school they MUST PROVE COMPLIANCE.

I would be willing to pay Gradey Dick $500,000 to never wear that draft night suit ever again. Money well spent.

 

[FrankNitty30]

Thanks for this information. Are you able to provide your experience with the range of NIL individual players are receiving? Are you seeing players get millions or is it more in the 5 to 6 figure range?

99% of deals are $200-$1000 and some are even “in-kind” deals. The leases, free meals whenever they want as long as they post a picture of the food on Social media, etc. $100 for showing up to sign autographs, etc. We have lease deals and restraint deals. But we also have camps that our athletes put on. A lot of that can pay better than anything if you get enough kids to show up.

Then you have the 1%, and that could actually be more like 10%, that are making bank. Then you have the top 1% that are just making stupid money. Think Olivia Dunne, Cavender Twins, Bronny James, Caleb Williams, Griffin from UCLA, Angel Reece now, etc. Those are not even fair to lump in with others.

Outside of those players, I have only heard of a few, though more surely exist, that are making 7 figures. Tshiebwe I heard had in excess of a million. I heard Kofi would have. I think the majority of the power 5 basketball players have, car leases, a restaurant deal of some sort, and then some cherry picked quick gig that is grossly overinflated that gets the majority to 100k-150k. We probably have 2 that get more than that, Shannon and Hawkins. It would not surprise me at all if 5-6 guys at Illinois make less than 25k.

 

[FrankNitty30]

Very educational post --- thank you Frank! Also glad to hear that Illinois seems to be doing things right.

And the now-bolded text sounds exactly like something Self would say.

It was hilarious. Being a huge Illinois fan, I was fanboy big time that I am in a zoom call with Bill Self for one. But two, you could see how he very easily and effortlessly balance right on that edge of legal and impermissible while still staying wholesome and “Awww Shucks” his way through recruiting, NIL, etc

 

[FrankNitty30]

Ah but here's the rub.

So right now the players have all the power, but without the schools, the players have nothing. Go to a minor league baseball game, you'll have plenty of open seats to choose from. Turn on a USFL game, the seats are almost entirely empty. The Overtime Elite struggles to fill a 3,000 seat arena. Facts are, there is very minimal interest in minor league sports. They are viewed to most as something to do every once in a while with the family, but season ticket holders are FAR less prevalent than any college program. Colleges on the other hand routinely fill 100,000 seat football stadiums and consistently fill basketball arenas of various sizes.

So if athletes want to push people around, the universities could always say, ok that's it. We're not going to be held hostage by 18-22 year olds. Hey coach, go see if you can make $4 M a year in some minor league basketball association. Hey players, see if you can make 6 digits playing in that league. And guess what guys, there are over 360 division 1 basketball programs, if you want to screw this all up, well you'll be lucky to have 32 teams to play on. So thousands of you will lose your opportunity and free education.

How many athletic departments actually make a profit? If the schools were forced to pay the players, many DIAs would go bust. Or they'd just make donors ultimately pay for it, so the school would just be the middle man. So in the grand scheme of things, the schools, if they act in unison have the power. Will they exert this power and threaten to shut it down? I doubt it, but to me that is the path to sanity. Some structured rules are put in place that pays the players but keeps a relatively level playing field. Some rules to limit player movement where you can't contact someone on another roster through back channels and offer them more money to leave their team. These would be helpful, because the way things are moving college teams are becoming pro teams that aren't as good.

I would agree with all of this. The whole thing needs to be cleaned up. The fastest way to clean that up is for the schools to take ownership of it and pay them as employees. Then, they can dictate contractual obligations, scaffolding etc. The real fish out of water in this, and if you have listened to Whitman and most specifically the SEC commissioner, the NCAA is on its deathbed. Or, best case scenario for the NCAA is that they are in charge of Div 1AA and lower sports wile the Power 5 conference form their own business entity that incorporates salaries,, benefits, etc so that their DIAs do make money. They would negotiate their own TV deals that would be directly shared with the athletes, and ideas like that.

 

[FrankNitty30]

So I want to preface my post by saying that I am all in favor of players getting paid and profiting off of their NIL.

However, I just read Alston over my lunch break. It does not say that there are zero restrictions that the NCAA can put on players profiting off of their NIL. In fact, Alston does not even address this issue. The only issue that it addressed is whether the NCAA could limit education related payments to athletes, and the Court unanimously decided that the NCAA could not limit education related payments. The restrictions that the NCAA had on non-education related payments was not before the Supreme Court, so it did not make a ruling on that. It left in place whatever restrictions the NCAA had on non-education related payments.

But the ruling did lay a groundwork for how restrictions on non-education related payments (i.e. NIL) could be challenged in the future. So the NCAA then voluntarily changed it's rules on NIL compensation. So as of right now, whatever restrictions the NCAA has on NIL payments are not against any Supreme Court ruling. They certainly could be challenged in the future. And based on the analysis in Alston, the Court would probably strike down restrictions on non-education related payments. Though it is important to note that only undue restrictions are banned by the Sherman Act. So it is possible that the Court would allow NIL payments, but allow some restrictions on them. It's also important to note that the Alston opinion laid out a few ways that the NCAA made terrible arguments. So the NCAA could learn from their mistakes and make better arguments, which could effect the eventual outcome.

And just to confirm my analysis, here is the Harvard Law Reviews take on it.

https://harvardlawreview.org/print/vol-135/ncaa-v-alston/#:~:text=Shortly%20after%20the%20Court's%20decision,%2C%20and%20likeness%20(NIL).

And I thank you all for coming to my TED talk.

I am glad you could clarify some points that I am unable to articulate since my background is not in law.

My perspective that is being shared is sprinkled in with a ton of “collective speak” and adopted “guidelines and guardrails” that are presented to us by the lawyers we do use. So I should not speak so matter of factory of this is “X” and this is “y” in such absolute terms.

The surety with which collectives act in the face of any NCAA muscle flexing is based on the interpretations we have been given that the NCAA has very little to stand on.

Once again, thanks for giving the discussion a little more scholarship.

 

[blife]

I am a co-founder of a Collective. I wish it was University of Illinois, but alas, I live nowhere near Champaign. I will say that the Illini Guardians as well as the ICON collective are seen EXTREMELY favorably in the world of collectives.

With that as the background, I will attempt to answer some questions.

1. The University can have EXACTLY ZERO involvement in facilitating a deal between an organization, business, individual, etc,

1A. A school can have an NIL compliance person who can help the student to understand tax implications, does a deal meet quid pro quo, does it stay away from illegal activities, etc.

2. Technically, a school is not even to know what the deals are worth. Now, we all know, and the NCAA knows that the schools know exactly what every kid gets. They are choosing to turn a blind eye. But, the only way a school should know anything about the financial arrangement is if the student tells them about it.

2A. These deals are the negotiated agreement between an entity and the perceived value of the individuals NIL influencing power. If an entity chooses to tie that to a school specific thing, AKA Coleman Hawkins pitching something because “ALL ILLINI drink/eat/play/whatever here, that is up to the business. Probably a good decision in that regard. But, it in no way has to be nor is it required for payment that it be Illinois specific.

3. Quid pro quo. Here is where it can get sticky especially if a kid leaves and the collective did not set up the deal very well. An athlete must DO SOMETHING. It cannot be something that they will do in the future, and then they are paid up front.

3A. So let’s use Skyy as an example. If he was paid $100,000 for 4 events he was going to be at, cool. But, if he was paid up front, that was very stupid on the collectives part, as well as technically illegal because no quid pro quo happened.

3B. Here is where it gets a little trickier. The Quid pro quo stuff is an NCAA rule that punishes the school. In the above scenario, Skyy does not HAVE TO do anything to keep that money.

3C. The contracts themselves need to be airtight to protect the collective, which in turn keeps the school out of trouble. But this is not always the case.

4. FaIr market value. This is is the bugaboo of all of this. What is fair Market value? What is appropriate. A majority of time FMV is looked at as insuring that a person gets ENOUGH of what they deserve. But this is flipped upside down with NIL. Now the question is “what did the do (QPQ) to get THAT (FMV)? So far this is the Wild Wild West. I sat in on a collective call (anonymously) with the KU collective and the Williams fund donors. These are the big guns of KU athletics. Bill Self, Lance Leipold and Coach Schneider were talking about all kinds of stuff. Leipold and Schneider were kind of rolling with the punches trying to figure some things out. Self was way ahead of the game. He starts calling out specific donors and saying stuff like “If you Donor X want to pay Gradey Dick $500,000 to come to your grandsons birthday party, you can do that.”

Now is that FMV? I think most prudent people would say, well, that is a little excessive. However, if a piece of art comes up for sale and someone is “willing to pay” $1 million…. then that is the value it holds for THAT person. Thus, in that market, at that time, with that buyer….. it is acceptable.

Once again, as with quid pro quo, FMV is an NCAA construct, but only applicable on the institution side. No penalties for the athlete as they are not capped on their earning potential of their NIL.

The real crappy thing with this is that the schools are most definitely guilty until able to prove innocence. If allegations are brought against the school they MUST PROVE COMPLIANCE.

Serious question and not meant as a slight, do the employees of the collective get paid? Who sets their salaries? Is it percentage based on revenues collected? I can't believe the collectives are done gratis. Do the collectives have any independent outside oversight other than the IRS? It sounds like a lot of work and reasonable amount of expenses incurred, accounting... ect.

 

[FrankNitty30]

It doesn't?
View attachment 26914
Goodbye to almost 5 years of never making a post.... Really wish it had been about Illini Hoops Recruiting instead of SCOTUS but at least it wasn't my worst mistake of the day.

In fairness, most of those 9-0 motions are on rulings in which case precedent already existed. Basically rubber stamping it. Not always the case for new rulings, especially as big as this issue was. It literally changed the entire direction of collegiate athletics and left very little wiggle room to navigate out of it. They basically hit the NCAA with a firehose to the face from 10 feet away.

Both of the gifs work

 

[FrankNitty30]

Serious question and not meant as a slight, do the employees of the collective get paid? Who sets their salaries? Is it percentage based on revenues collected? I can't believe the collectives are done gratis. Do the collectives have any independent outside oversight other than the IRS? It sounds like a lot of work and reasonable amount of expenses incurred, accounting... ect.

Great question and I can only speak on my mid-level collective and maybe a little bit about the Power 5’s I have become close with. We take a percentage of every deal. This is to cover salaries, deal tracking with tax preparing for each athlete. We use a company called Basepath. At the end of the day all accounting is handled through an app on my phone.

 

[FrankNitty30]

Serious question and not meant as a slight, do the employees of the collective get paid? Who sets their salaries? Is it percentage based on revenues collected? I can't believe the collectives are done gratis. Do the collectives have any independent outside oversight other than the IRS? It sounds like a lot of work and reasonable amount of expenses incurred, accounting... ect.

Also, I would say that expenses incurred is heavy at the beginning. At the end of the day, for me and a lot of the collective founders at my size, is doing it as another stream of revenue. Pay for your vacation time share, travel a little bit more, able to come to some Illinois games that I normally am not able to get to. This year I will be at the Illinois/Kansas football game. A few years back I was at the Illinois/Cincinnati game in Kansas City. My son shot 3’s at halftime and won tickets to any sporting event up to $100. I think he used it to go to the Big 10 tournament last year. So, it has paid me off in spades!

 

[TheGMan]

I am glad you could clarify some points that I am unable to articulate since my background is not in law.

My perspective that is being shared is sprinkled in with a ton of “collective speak” and adopted “guidelines and guardrails” that are presented to us by the lawyers we do use. So I should not speak so matter of factory of this is “X” and this is “y” in such absolute terms.

The surety with which collectives act in the face of any NCAA muscle flexing is based on the interpretations we have been given that the NCAA has very little to stand on.

Once again, thanks for giving the discussion a little more scholarship.

I appreciate your input. And I never meant it as a "you gotcha" kind of thing. More was just curious. And it certainly does seem to be the case that the NCAA has little to stand on, so you were ultimately right. I was just curious about what the case said, since I never actually looked into it.

 

[FrankNitty30]

I appreciate your input. And I never meant it as a "you gotcha" kind of thing. More was just curious. And it certainly does seem to be the case that the NCAA has little to stand on, so you were ultimately right. I was just curious about what the case said, since I never actually looked into it.

Zero hard feelings from me. Like I said, you gave it gravitas, i was poorly articulating

 

[sacraig]

It doesn't?
View attachment 26914
Goodbye to almost 5 years of never making a post.... Really wish it had been about Illini Hoops Recruiting instead of SCOTUS but at least it wasn't my worst mistake of the day.

 

[Tacomallini]

Goodbye to almost 5 years of never making a post.... Really wish it had been about Illini Hoops Recruiting instead of SCOTUS but at least it wasn't my worst mistake of the day.

 

[Roundball Sage]

So right now the players have all the power... Overtime Elite struggles to fill a 3,000 seat arena. Facts are, there is very minimal interest in minor league sports... Colleges on the other hand routinely fill 100,000 seat football stadiums and consistently fill basketball arenas of various sizes. So if athletes want to push people around, the universities could always say, ok that's it. We're not going to be held hostage by 18-22 year olds.

The relationship between sports organization and fan is at the most basic level an emotional one. You grow up as a kid liking a team all on your own. Or your Dad or Mother or Grandfather or Uncle or some family member or friend took you to a game and you got hooked.

But why did you get hooked? Suddenly overnight you found great passion for some sports team that at one time you didn’t care about at all? No... it was some kind of personal emotional connection with that team. And for each of us we have our own story and path of how that came to be for each of our fan interests.

We see in our fan team choices what we want to see in them and what personal meaning they carry for us.

The point? It’s a lot tougher to develop a connection to a minor league sports franchise with the quickly changing rosters (although a few fans make such a connection but to a much lesser degree than with a Major League franchise or a School and University at whatever level). With colleges you have the added personal element of investing time and money in being there... choosing to be there... developing friends and memories tied to the place. Those you carry with you through life and they never go away... thus, why many of us connect with the Illini and the passion is there even when the game record might be bad or there are other challenges going on at the time.

So even now when student athletes can bank big money while still in school... the personal connection that fans have to the institution can and will survive. Yes, it may diminish the interest level by some fans (or a few might go altogether)... but likely not enough to make a big dent in the current system or general fan interest level.

The University makes dough. The coaches make dough. The advertisers make dough. It’s only right that student athletes make dough, too, if their talent warrants this. This might tax the emotional connection to the institution by fans but won’t break it when the fan relationship-connection is strong.

If an institution cannot make the sports finances work for them under the current rules then they need to seek a performance competition level where they find a model that works for them. That might mean dropping one or more competition level-notches down. But the World won’t disappear and we’ll all survive.

And if an organization did find a less-stressful competition and financial level and we as fans began to lose interest in ‘Our Team’ because of that... then our personal connection to that organization really was never as ‘real’ as we wanted to believe it was. We would have been fooling ourselves.

 

[FightinIllini30]

Also, I would say that expenses incurred is heavy at the beginning. At the end of the day, for me and a lot of the collective founders at my size, is doing it as another stream of revenue. Pay for your vacation time share, travel a little bit more, able to come to some Illinois games that I normally am not able to get to. This year I will be at the Illinois/Kansas football game. A few years back I was at the Illinois/Cincinnati game in Kansas City. My son shot 3’s at halftime and won tickets to any sporting event up to $100. I think he used it to go to the Big 10 tournament last year. So, it has paid me off in spades!

Dang your son must be a real good shooter
Twas a shame he didn’t get to see Illinois in the tournament since he only went to the s semifinal games

 

[FrankNitty30]

Nice shiny thread all to
Itself. Nice

 

[RichAdams]

Yes, FrankNitty is thoughtful to disclose that Bill Self seems to be way ahead of the game with the quote about a KU alum (astensibly being willing to) pay "Grady Dick" six figures to go to the grandson's birthday party for an hour. But ultimately, does the question become this, to wit: Which school has the most alums with the deepest pockets? [surely not KU...]

Very educational post --- thank you Frank! Also glad to hear that Illinois seems to be doing things right.

And the now-bolded text sounds exactly like something Self would say.

 

[wpr]

Nice shiny thread all to
Itself. Nice

You earned it. Maybe this should be pinned to the top of one of the forum pages.

 

[FrankNitty30]

Interesting perspective.

How transfer portal, NIL reshaping college basketball recruiting has dropped value of high school prospects

'Freshmen are a bad investment. They're all rentals,' one Division I coach told CBS Sports

www.cbssports.com

 

[Calvin]

In fact, Alston does not even address this issue. The only issue that it addressed is whether the NCAA could limit education related payments to athletes, and the Court unanimously decided that the NCAA could not limit education related payments.

This if from the Harvard Law link, "Although the Supreme Court did not have occasion to review the NCAA’s rules regarding compensation unrelated to education, its decision laid the groundwork for the dismantling of those rules in future proceedings."

I think when you couple the way the ruling went, with how state legislatures are over-riding the NCAA to force them to allow NIL compensation, along with the way programs and conferences are shifting power, it's quite a bit of over-reach for the NCAA to try step in and try and reverse or limit it. Things could change, but IMHO, just looking at a strict legal analysis misses the big picture.

 

[Calvin]

Interesting perspective.

How transfer portal, NIL reshaping college basketball recruiting has dropped value of high school prospects

'Freshmen are a bad investment. They're all rentals,' one Division I coach told CBS Sports

www.cbssports.com

Enjoyed the read. From the article:
"A weird duality has emerged in college basketball recruiting: Coaching staffs will sometimes spend two, even three years recruiting a player. If they're lucky, they land that player. But that player's impact on a program could easily wind up being inferior to a transfer who gets recruited for a week — sometimes a transfer decision takes a couple of days — who will transfer in and be better. That dynamic is why high school recruits hold less value now than ever."

 

[Old Farm Illini]

Enjoyed the read. From the article:
"A weird duality has emerged in college basketball recruiting: Coaching staffs will sometimes spend two, even three years recruiting a player. If they're lucky, they land that player. But that player's impact on a program could easily wind up being inferior to a transfer who gets recruited for a week — sometimes a transfer decision takes a couple of days — who will transfer in and be better. That dynamic is why high school recruits hold less value now than ever."

Seems incredibly frustrating but coaches have to keep recruiting these guys and put in the same effort so they can plant the seed for when they transfer after their first school or second school.

 

[spotter]

Kiffin bemoans NIL, portal for football 'disaster'

Ole Miss football coach Lane Kiffin says the current college sports landscape has become a "disaster," with the transfer portal and NIL to blame for it.

www.espn.com