Transfer portal and NIL Money, how they have changed college sports".

[Heyjoe4]

I have a friend, retired, who practiced labor law. I talked to him about this. He mentioned something that I thought was actually something that could happen. If players, particularly football and basketball, ask for money from the schools, at the DI level, whatever is determined by law would also effect all schools in DII and DIII, as well as other affiliations. You could kiss all those programs goodbye, because none of them are profitable to start. At the DI level, the number of sports would diminish considerably.

This thing is going to be a real mess before it's over.

That makes sense. Worst case, D2 and below would be wiped out and at the D1 level, there would be fewer schools participating. I mean that’s the worst case, but a good example of being careful what you ask for (NIL).

I understand the ethics behind paying players for helping the schools make money. That’s what is happening, college sports are a big business. Captain Obvious here.

Just seems like there hasn’t been much thought behind NIL. So the law of unintended consequences will be in force.

I don’t think the worst case will happen. D2 and lower will still have athletic programs. How they look though could be very different from what we’re used to.

 

[Voyageur]

That makes sense. Worst case, D2 and below would be wiped out and at the D1 level, there would be fewer schools participating. I mean that’s the worst case, but a good example of being careful what you ask for (NIL).

I understand the ethics behind paying players for helping the schools make money. That’s what is happening, college sports are a big business. Captain Obvious here.

Just seems like there hasn’t been much thought behind NIL. So the law of unintended consequences will be in force.

I don’t think the worst case will happen. D2 and lower will still have athletic programs. How they look though could be very different from what we’re used to.

One thing that should scare the bejeebers out of everyone is unions. For the most part, employees at schools at the teaching level are unionized. I'd venture a guess that a lot of the employees at the schools are also in unions, especially those at state owned schools, since the people employed there would be state employees. As we've already found out, through recent court actions, not even religious organizations can claim exemption from unionization. It's an endless stream of problems, demands, litigation, appeals, and chaos, with the NCAA being right in the middle, neutered by their own doing.

I like your reference to the laws of unintended consequences. Merton's Law. Totally appropriate.

 

[weeds]

I scroll through a lot of sports related news sites including Florio's looking for stories that potentially MIGHT be worth reading - hard to sift through the click-bait. Well, Florio used to be an attorney - probably an ambulance chaser - and seems to have an unhealthy preoccupation with how much athletes make and how much MORE they're worth, it's almost roll your eyes stuff but he claims that "Rumors" is part of the title of the website, so he feels free to post a lot of half-baked stuff.

Still, this one caught my eye and yeah, I think there are going to be a lot of unprepared kids at the mercy of Uncle Sam AND their State's Department of Revenue:

Unpaid taxes are the next wave of NIL complications

As the dust settles on the NIL explosion, Uncle Sam will be looking for his cut.

www.nbcsports.com

 

[Heyjoe4]

I scroll through a lot of sports related news sites including Florio's looking for stories that potentially MIGHT be worth reading - hard to sift through the click-bait. Well, Florio used to be an attorney - probably an ambulance chaser - and seems to have an unhealthy preoccupation with how much athletes make and how much MORE they're worth, it's almost roll your eyes stuff but he claims that "Rumors" is part of the title of the website, so he feels free to post a lot of half-baked stuff.

Still, this one caught my eye and yeah, I think there are going to be a lot of unprepared kids at the mercy of Uncle Sam AND their State's Department of Revenue:

Unpaid taxes are the next wave of NIL complications

As the dust settles on the NIL explosion, Uncle Sam will be looking for his cut.

www.nbcsports.com

Good catch Weeds. Yeah the tax law is actually simple. It says "All income is taxable, except...." and after the word "except" there are about a million pages that provides a full employment act for tax accountants and lawyers.

But at its core, income is always taxable, at least to start. What's worse is that after one year of not keeping up with taxes, the IRS requires us to pay estimated taxes so we aren't paying a huge amount at the end of a year. So there are a few ways the IRS can hurt us unexpectedly.

So a lot of these guys will need agents or accountants or lawyers or all three long before they ever go pro.

 

[Pokerbrat2000]

One thing College athletics can do to help maintain the level of competition is to put more focus on tweaking the Transfer Portal. I think they really dropped the ball with it. I have no problem with allowing an athlete to switch schools, without having to sit out a year. However, unlimited incoming transfers for any program is where they made the mistake. Put a cap on the number of transfers allowed by each team in a single year. Vary that number based on the sport and roster size. Teams are currently limited to how many scholarships they can hand out, not much different.

Speaking of scholarships, programs may want to reconsider those too. Why would an athlete making $200K or more in NIL money need/deserve a scholarship?

Lots of big decisions ahead for College Athletic Programs, mostly involving money and how best to split up the big old pie of it.

 

[Heyjoe4]

One thing College athletics can do to help maintain the level of competition is to put more focus on tweaking the Transfer Portal. I think they really dropped the ball with it. I have no problem with allowing an athlete to switch schools, without having to sit out a year. However, unlimited incoming transfers for any program is where they made the mistake. Put a cap on the number of transfers allowed by each team in a single year. Vary that number based on the sport and roster size. Teams are currently limited to how many scholarships they can hand out, not much different.

Speaking of scholarships, programs may want to reconsider those too. Why would an athlete making $200K or more in NIL money need/deserve a scholarship?

Lots of big decisions ahead for College Athletic Programs, mostly involving money and how best to split up the big old pie of it.

Good points. Certainly the TP and NIL are connected. I didn't know transfers were unlimited. To try and maintain some semblance of competitiveness, at least at the national level and ideally within conferences, makes sense to put some limits own the number of transfers per program per year.

And yeah, any player receiving NIL money in excess of his or her scholarship value should have to pay some or all of their tuition. The problem is that scholarships are handed out for a number of reasons, but here they're probably all of the athletic variety. Start clawing that back once a player starts getting paid. Save the scholarship money for bright minds from poor families.

This is all getting analogous to how the tax code is used to affect individual behaviour - tax credits especially. That has failed spectacularly in rewarding those truly in need. NIL will take major and minor NCAA sports down that hole unless some common sense safeguards are put in place.

 

[Pokerbrat2000]

Not sure how up to date this list is, but the top 25 NIL money athletes are listed.

Bronny James at #1 : $4.9M

Kyle McCord @ #25: $857,000

MSN

 

[Voyageur]

Not sure how up to date this list is, but the top 25 NIL money athletes are listed.

Bronny James at #1 : $4.9M

Kyle McCord @ #25: $857,000

MSN

That's the list of known amounts. It's just the tip of the iceberg.

 

[Pokerbrat2000]

This doesn't shock me one bit and what we all have to "look forward to" in college sports and the NIL and Transfer portal takes over and changes college sports.

"Whitlock also pointed to player behavior as a symptom of the larger financial strain. He reported that several offensive players spent two consecutive nights at a rented strip club during their time in Texas. “This was primarily offensive players,” Whitlock noted. “They spent two nights partying… and you wonder why their focus wasn’t there.”

https://athlonsports.com/college/colorado-buffaloes/colorado-ran-out-of-money-for-alamo-bowl

 

[Voyageur]

The Federal government has stated that the proposed issuance of NIL money from collectives to football and basketball players in DI college is not going to be in the 80-85% range like schools were planning on applying. Title IX requires more of an equal distribution.

Everyone should have known that eventually Title IX would come into play. It's going to be interesting seeing how far this goes. What balance will be struck? It's going to seriously change the face of college sports.

 

[Heyjoe4]

The Federal government has stated that the proposed issuance of NIL money from collectives to football and basketball players in DI college is not going to be in the 80-85% range like schools were planning on applying. Title IX requires more of an equal distribution.

Everyone should have known that eventually Title IX would come into play. It's going to be interesting seeing how far this goes. What balance will be struck? It's going to seriously change the face of college sports.

What was inevitable was that courts would allow players to get paid for NIL. I don't know where the portal came from. Probably the courts.

 

[Voyageur]

What was inevitable was that courts would allow players to get paid for NIL. I don't know where the portal came from. Probably the courts.

It was a lawsuit filed by Ed O'Bannon who felt he should have been paid for the NCAA and the school using his name and likeness in video games. It grew from there into a monster that the NCAA couldn't beat in court.

I understand why the players should have these rights, and at the same time I understand the position of the schools. The problem is that the NCAA didn't work in good faith from the start trying to kill it all and it backfired. Now they have this monstrosity of a problem.

 

[Heyjoe4]

It was a lawsuit filed by Ed O'Bannon who felt he should have been paid for the NCAA and the school using his name and likeness in video games. It grew from there into a monster that the NCAA couldn't beat in court.

I understand why the players should have these rights, and at the same time I understand the position of the schools. The problem is that the NCAA didn't work in good faith from the start trying to kill it all and it backfired. Now they have this monstrosity of a problem.

Good point. If the NCAA had been up front about this and recognized it was coming, a better plan could have been worked out. Maybe. No one really knows how this will end, other than to say college football is gonna suffer.

 

[Pokerbrat2000]

Good to see the Big10 is backing the Badgers on their stance with Xavier Lucas.

This will be an important "case" to follow and see how it rolls out. I would be surprised if Lucas plays for the Badgers again, but I will also be surprised if the NCAA doesn't go after Miami for tampering and somehow keep Lucas from playing for them as well. I also hope that somehow Lucas is penalized for thinking he can just jump from 1 agreement to another.

Watch, Lucas will probably end up with the Buckeyes.

You must be logged in to see this image or video!

MSN

 

[Pkrjones]

The Badgers & Lucas signed an NIL deal which isn't, yet, legal. UW did not enter Lucas into the portal based on this non-legal document. Imho, the transfer portal system will be swiftly dying, as its structure and "rules" are very imperfect. Lucas supposedly wanted to be closer to home, was denied the "standard" portal procedure, so unenrolled from UW & enrolled at Miami. I'm sure there was contact with members of Miami football, as Lucas is a football player, so not sure how tampering gets proven.

 

[Voyageur]

The Badgers & Lucas signed an NIL deal which isn't, yet, legal. UW did not enter Lucas into the portal based on this non-legal document. Imho, the transfer portal system will be swiftly dying, as its structure and "rules" are very imperfect. Lucas supposedly wanted to be closer to home, was denied the "standard" portal procedure, so unenrolled from UW & enrolled at Miami. I'm sure there was contact with members of Miami football, as Lucas is a football player, so not sure how tampering gets proven.

What I say about this comes from information I have from a source that's usually right. Someone who knows a quite a bit about how some schools have been operating within the system and outside. He also knows people in the Miami consortium, and at the University of Miami. Here's what he has told me about what happened. Is he right? Believe what you want. I think he's on the money with it for reasons I can't divulge.

Lucas signed an NIL deal, but it hadn't kicked in yet. He's a Florida boy and someone he knows was talking to someone close to the Miami program, and they said they'd really like to get Lucas at Miami, if he was available. So, the word goes out to the deep pocket alumni, and they come up with a package of NIL money that Lucas can't refuse. So, he figures he'll just enter the portal, and Wisconsin can suck it up because the contract he signed hasn't kicked in yet. Apparently, his agent at least suggested that was okay or said that Wisconsin would just let him go.

The problem is, someone found out that the money was offered as an "incentive" to leave Wisconsin for Miami and wasn't a question of Lucas wanting to leave and submitting to the portal before fielding offers. He was "induced" to leave by the offer of several times the amount of NIL money he had from the Wisconsin consortium.

Let's look at Wisconsin's position in this. They obviously have some documentation or hard evidence that Lucas was given an offer before entering the portal. In fact, it could come from players on the Badger team. Guys he thought would keep his secret and haven't. Additionally, they must be pretty much aware of the timeline of communications between someone representing getting him and/or his agent, to pull the plug at Wisconsin. There has to be enough data for them to even consider the lawsuit against Lucas and whomever else is involved.

There's no way that the University of Wisconsin would even embark on this journey if it was just a fishing expedition. They have a smoking gun, or they would have let the kid go.

Anyhow. Make your own decisions.

 

[Heyjoe4]

What I say about this comes from information I have from a source that's usually right. Someone who knows a quite a bit about how some schools have been operating within the system and outside. He also knows people in the Miami consortium, and at the University of Miami. Here's what he has told me about what happened. Is he right? Believe what you want. I think he's on the money with it for reasons I can't divulge.

Lucas signed an NIL deal, but it hadn't kicked in yet. He's a Florida boy and someone he knows was talking to someone close to the Miami program, and they said they'd really like to get Lucas at Miami, if he was available. So, the word goes out to the deep pocket alumni, and they come up with a package of NIL money that Lucas can't refuse. So, he figures he'll just enter the portal, and Wisconsin can suck it up because the contract he signed hasn't kicked in yet. Apparently, his agent at least suggested that was okay or said that Wisconsin would just let him go.

The problem is, someone found out that the money was offered as an "incentive" to leave Wisconsin for Miami and wasn't a question of Lucas wanting to leave and submitting to the portal before fielding offers. He was "induced" to leave by the offer of several times the amount of NIL money he had from the Wisconsin consortium.

Let's look at Wisconsin's position in this. They obviously have some documentation or hard evidence that Lucas was given an offer before entering the portal. In fact, it could come from players on the Badger team. Guys he thought would keep his secret and haven't. Additionally, they must be pretty much aware of the timeline of communications between someone representing getting him and/or his agent, to pull the plug at Wisconsin. There has to be enough data for them to even consider the lawsuit against Lucas and whomever else is involved.

There's no way that the University of Wisconsin would even embark on this journey if it was just a fishing expedition. They have a smoking gun, or they would have let the kid go.

Anyhow. Make your own decisions.

Thanks guys, much appreciated.

Question on NIL money - who pays the player NIL money? I always thought it would be a sponsor like Nike, but reading this makes me think the money may come from the university directly. Is that true? That would encourage the kind of manipulation pk and V are commenting on. Anyway, thanks to anyone who can answer that question.

 

[Voyageur]

Your question about who pays can be extremely misleading. Not from the question but as to how it has to be answered.

The rule is supposed to be that a player decides he wants to change schools so he can play more or for educational reasons, so he puts his name in the portal then looks around for a different school he can attend. The caveat as to how it's supposed to be done is that the player decides to transfer first, with no interaction with any other school or persons associated with another school involved in the process. Then, after his name is in the portal he can pursue other opportunities by contacting schools that interest him from either a playing perspective or educational perspective or, as I giggle at, the perspective of playing and getting a better education.

What's happening is that players have agents, and these agents are constantly out there representing the players and pretty much trying to sell them to a higher bidder than that he's getting from the school he's at. In other words, the agent is constantly working to help the player make more money. The agents are constantly looking inside the collectives/consortiums/groups, whatever you want to call them for more money for their clients. But, at the same time, they aren't opposed to sitting down over a lunch with someone who just seems to know someone who knows someone else, who knows (In the Lucas case) someone who says Miami could sure use the kid and figures he's worth a healthy hunk of change to play football for them. Of course, the agent responds that the player is happy where he's at but is curious about just how much money they'd be talking about. Then it turns into an unofficial bartering question to find out just how much they are really willing to pay with the contact making several phone calls along the way. In the end, the agent knows what the player is worth at that school.

Strictly by accident of course, the agent runs into others who know somebody, who knows somebody, etc. They have lunch and the mating dance occurs again, and the offerings from the bigger of the two from previous agreements and what is available elsewhere becomes to testing point as to how much it will take to get the guy to play at their school.

The problem with the Lucas case is that Lucas and his agent had signed a contractual agreement for NIL money that was linked to his playing football at Wisconsin, not Miami. Like anyone else in the real world, a contract is a contract unless both parties are willing to break it and set it aside. What's interesting in this case is that the school itself is directly involved in the lawsuit, which shows that they in some way or form are a party to the specific contract itself. This is where it gets murky.

How did the Badgers get involved in a contractual agreement with a student/player? Or does it have something to do with the way his scholarship is written, or how all scholarships are written? The fact is, this is going to tear the band-aid off a lot of wounds with this whole thing before it's over. There's no way Wisconsin would go into this fracas without the NCAA realizing it's something that is probably needed. In fact, I'd venture a guess that a huge percentage of the schools believe the players need to live up to their contracts.

So, what is this contract between the school and player? I think he was offered a full scholarship for the upcoming college year and signed his acceptance for it. They are considering it a valid contract like any other in the real world, and are holding him to it.

Now, how the rule reads:


NIL collectives and corporate brands make offers of name, image, and likeness (NIL) money to college athletes.

NIL collectives

• Independent organizations that raise money for universities
• Formed by wealthy alumni
• Pay athletes in exchange for services like meet and greets or charity work
• Can help athletes with other deals, like high-end cars

Corporate brands

• Pay athletes for endorsements, often based on social media clout
  
• Brands like Nike and Adidas may offer deals to athletes
  

How NIL money is paid

• Athletes can earn money from:
  
  • Appearing in ad campaigns
  • Selling merchandise and signed memorabilia
  • Selling ads on their social accounts
  • Starting their own businesses
  • Starting their own sports camps
  • Making paid appearances
  • Delivering speeches for money
  • Arranging autograph signings

 

[Pokerbrat2000]

Easy solution to the Lucas situation and any like it.

Allow his transfer to Miami, for his education, but he is suspended for 1 year from playing football.

If he has committed a contractual violation, let the interested parties pursue legal action on that part of it.

If there was illegal tampering by Miami, then the NCAA steps in and penalizes them.

If Wisconsin did something wrong, same thing, they should be penalized.

I am really glad that Wisconsin put their foot down and said "Sorry, we aren't turning a blind eye, you are not following the rules as we know them." This is how things evolve and get fixed. Some will see Wisconsin as being the "bully" and Lucas as a "victim". Personally, I see Wisconsin as the "victim", Miami as the "bully" and Lucas getting caught up in a situation where he didn't get proper or legal advice.

 

[Voyageur]

Easy solution to the Lucas situation and any like it.

Allow his transfer to Miami, for his education, but he is suspended for 1 year from playing football.

If he has committed a contractual violation, let the interested parties pursue legal action on that part of it.

If there was illegal tampering by Miami, then the NCAA steps in and penalizes them.

If Wisconsin did something wrong, same thing, they should be penalized.

I am really glad that Wisconsin put their foot down and said "Sorry, we aren't turning a blind eye, you are not following the rules as we know them." This is how things evolve and get fixed. Some will see Wisconsin as being the "bully" and Lucas as a "victim". Personally, I see Wisconsin as the "victim", Miami as the "bully" and Lucas getting caught up in a situation where he didn't get proper or legal advice.

That's pretty much what I see too. I think the reason the U isn't saying much except breach of contract has to do with the perceptions that people might have before the truth is exposed in a court room. I believe that Lucas has decided to leave the Badgers for Miami and sit out a year of eligibility believing that the NCAA will end up having to give him back that year when he wins in court. In the meantime, since there's nothing that could stop them, the people handing out the NIL money have more than likely guaranteed him the money for the remainder of years he would have left to play college football. In other words, he'll get paid the full amount and they'll absorb the costs of his scholarship and living expenses because they can still use him under the NIL as it exists.

For those who are calling the Badgers out on this, they need to realize that the vast majority of schools cannot compete in a world where money flows like water in the schools who have the most money to hand out. Notice I said "schools," because no matter how you slice it, the schools decide how much they want the player and know exactly how much money is out there to pay.

Since day one, I have been telling people about what I know personally about how it's gone at the University of Texas, and Texas A&M, and I was told I didn't know what I was talking about. It was only going to amount to a pizza here and there and maybe a pair of shoes at best. I knew better. I know people within the sphere of both the University of Texas and Texas A&M, who told me about where it was going. One friend told me that as soon as it was available, Texas sponsors put a guarantee on the table for every offensive lineman who earned a scholarship from the school, there was $50,000 in NIL money for the first year. That was just for one area of the team. Look how much Ewers and Manning got to be there. At the same time, I saw A&M people going into the field telling potential recruits there was a lot of money out there, but they wouldn't discuss how much. First the kid had to sign a letter of intent and get into the program. Of course, when they left the kid's home, there was a piece of paper sitting on the table with a dollar figure on it. It didn't mean anything.... LOL! Just some scribbled notes of no value. But we all know better, don't we?

People get the misguided impression that this is all new and came out of nowhere. Nothing could be further from the truth. A lot of the top programs in the nation already had an underground network of supporters who were funneling perks into the hands of top athletes in large sums. Imagine a poor kid from Alabama, whose dad has to drive a 25 year old junker to get to work, and they live in a run-down house all of a sudden getting a job with a prestigious company for 3 to 4 times or more what he was making, and a sudden savings account so he can buy a new car and they can move into a decent home. It happened, repeatedly. In addition to all of that, the kid ends up driving an $85,000 car back around 2010, while in school, and can afford it, the insurance, and buy clothes and bling that was totally out of his price range. Yup! The network was there. All that happened for the most lucrative schools was to bring that network out in the open and expand on it.

The NCAA spent too much time burying their heads in the sand and bringing charges against some schools and putting the hammer down, while warning those who added large viewership to the TV markets. They're as dishonest in their actions as the average agent out there. And by the way, I know one guy who has been representing athletes for a long time, and when he gets a snoot full and nobody is around, he'll tell you just how corrupt the whole thing has always been.

 

[Pokerbrat2000]

People get the misguided impression that this is all new and came out of nowhere.

100% on this.

NIL is just the fix that was needed to call what has been going on for decades, "above the board". The problem is, it has opened the floodgate for massive amounts of money to be pumped into college sports, in very disproportionate amounts from college to college and program to program.

I liken this to what happened to the Olympics of old. The Olympics were once a proud tradition of amateur athletes from around the world, competing against each other on a world stage. Then Russia and a few other countries decided that they could improve their Olympic fortunes by employing top athletes in their "Armies". Armies of athletes that trained year round in their specific sport. When other Countries started losing to these well trained athletes, "foul play!" was cried and the only way to level the playing field was to allow professional athletes to compete in the Olympics, for any country they had some sort of tie with. I still watch some of the Olympics, but not really caring who wins. I would love to see it go back to 100% amateur athletes only, but it won't.

College sports are now moving to paying their athletes. For those who enjoy it that way, bully for you. Personally, I hate it and my interest in those sports that are now being heavily influenced by NIL and to some extent, the Transfer Portal, I am about done with. If I want to watch professionals (paid athletes), I will watch the NFL or NBA. The talent is much better and at in those leagues, competitive parity amongst the teams is considered important.