NIL 'for Dummies'

[cydline2cydline]

Here is my shot at making something complicated, less so. I'm not involved or an expert in this area, just a process nerd.

ISU is a non-profit, so largely you have to spend what you make (ie. no profit).

In 2024 the budget was balanced (top row). Money comes into the Ath. Dept. from the left and goes out to the right.

In 2025, you had this 20.5million expense (money to spend) that you never had before ('Ath. Rev Share' in Green) which has been allocated a specific way to the major sports (Pollard's control). You need to figure out how to raise money to offset it every year into the future. ISU said we will dip into the Ath. Dept. Savings (Red) to cover the gap short-term. Long Term, how does the Ath. Dept raise money or borrow from other areas (university, board of regents, etc) to fund the 'Red Box'? A problem Pollard and team are trying to solve.

Other universities promising more than 30m a year to football only, are counting on NILGO to account for the remaining amount above what the university is willing/able to contribute (20 million per year max currently for all sports) . This is where Pollard is saying he has no control over how other companies (Hyvee's and Fareway's of the world) choose to spend advertising dollars with athletes within ISU.

I think the grey area for universities right now is that 'Yellow' box. Those are handled outside of the Ath. Dept. budget but are just monitored by someone within the Ath. Dept, so they can see how much players are getting and ensuring it is being done per the university standards. Though, how can universities 'promise' to coaches they will get this much when they technically aren't the ones providing it?

Just trying to provide a little clarity to a complex topic.

 

[Prone2Clone]

Though, how can universities 'promise' to coaches they will get this much when they technically aren't the ones providing it?

This was my biggest question.

According to Jamie, they can't. I mean, they can, but it's anybody's guess how much of that might actually materialize. Might happen. Might not.

According to others on here, nobody is playing by the rules and just throwing excess cash around at will.

 

[tigercy]

I think you are materially correct in the above analysis (the numbers do not really matter). I think the point with Jamie is that until the red box is fully funded from other than reserves (not sure it is 100% funded by reserves now) anything that looks like B2B needs to fund the red box first.

So to be the question remains - if player A in football is getting $1,000,000 from the green box now and a company comes along and says they want to pay him $1,000,000 in a B2B deal would Jamie would say fine, take the $1,000,000 to reduce the red box (ie general fund) or would be allow it to be a yellow box transaction that goes through the clearinghouse? Don't know the answer to that but seems like a logical question for a reporter to ask.

Regarding other schools spending $30,40 50 million on football, I do not see how this will get through the clearinghouse when it becomes effective (not sure when the B2B deals have to first do to Deloitte). Seems like a relic of NIL collective days. For example, Cody Campbell's donation to TTU collective - in the future, each athlete that gets money from this will have to show a FMV return to the donor or the donor's company. EACH player will have to do that. Not sure what they are doing or how an Oil&Gas exploration company benefits from athlete alignment.

To put another way, if a donor came along and wanted to double our football rev share from 13mm to 26mm and pay each player twice what they are making today (very simple example), each players deal would separately have to go through the clearinghouse, justifying the FMV of their NIL usage for the money they receive. IF the rules are enforced, this is going to cause some real issues. A lot of these big $ supporters around the country are wealthy because they sold their business - what is the value they are receiving?

This will only get uglier.

 

[FriendlySpartan]

I think you are materially correct in the above analysis (the numbers do not really matter). I think the point with Jamie is that until the red box is fully funded from other than reserves (not sure it is 100% funded by reserves now) anything that looks like B2B needs to fund the red box first.

So to be the question remains - if player A in football is getting $1,000,000 from the green box now and a company comes along and says they want to pay him $1,000,000 in a B2B deal would Jamie would say fine, take the $1,000,000 to reduce the red box (ie general fund) or would be allow it to be a yellow box transaction that goes through the clearinghouse? Don't know the answer to that but seems like a logical question for a reporter to ask.

Regarding other schools spending $30,40 50 million on football, I do not see how this will get through the clearinghouse when it becomes effective (not sure when the B2B deals have to first do to Deloitte). Seems like a relic of NIL collective days. For example, Cody Campbell's donation to TTU collective - in the future, each athlete that gets money from this will have to show a FMV return to the donor or the donor's company. EACH player will have to do that. Not sure what they are doing or how an Oil&Gas exploration company benefits from athlete alignment.

To put another way, if a donor came along and wanted to double our football rev share from 13mm to 26mm and pay each player twice what they are making today (very simple example), each players deal would separately have to go through the clearinghouse, justifying the FMV of their NIL usage for the money they receive. IF the rules are enforced, this is going to cause some real issues. A lot of these big $ supporters around the country are wealthy because they sold their business - what is the value they are receiving?

This will only get uglier.

The clearing house has been in effect since this summer.

It’s extremely easy to pass along NIL as having value for the high revenue programs. We live in a capitalist society, the value essentially is what people are willing to pay, you just have to have the right NIL team to frame it

 

[Die4Cy]

I think you are materially correct in the above analysis (the numbers do not really matter). I think the point with Jamie is that until the red box is fully funded from other than reserves (not sure it is 100% funded by reserves now) anything that looks like B2B needs to fund the red box first.

So to be the question remains - if player A in football is getting $1,000,000 from the green box now and a company comes along and says they want to pay him $1,000,000 in a B2B deal would Jamie would say fine, take the $1,000,000 to reduce the red box (ie general fund) or would be allow it to be a yellow box transaction that goes through the clearinghouse? Don't know the answer to that but seems like a logical question for a reporter to ask.

Regarding other schools spending $30,40 50 million on football, I do not see how this will get through the clearinghouse when it becomes effective (not sure when the B2B deals have to first do to Deloitte). Seems like a relic of NIL collective days. For example, Cody Campbell's donation to TTU collective - in the future, each athlete that gets money from this will have to show a FMV return to the donor or the donor's company. EACH player will have to do that. Not sure what they are doing or how an Oil&Gas exploration company benefits from athlete alignment.

To put another way, if a donor came along and wanted to double our football rev share from 13mm to 26mm and pay each player twice what they are making today (very simple example), each players deal would separately have to go through the clearinghouse, justifying the FMV of their NIL usage for the money they receive. IF the rules are enforced, this is going to cause some real issues. A lot of these big $ supporters around the country are wealthy because they sold their business - what is the value they are receiving?

This will only get uglier.

NILgo does not have the resources to investigate thousands of individual deals in depth and follow through to make sure they happen as they were reported to be. From what we've seen with the first few things coming through the clearing house, which admittedly have all been small dollar events, all you really need is a contract agreement from the business for the amount and what you are going to do for it. Seems like a swiss cheese system.

 

[mwwbbfan]

Here is my shot at making something complicated, less so.

ISU is a non-profit, so largely you have to spend what you make (ie. no profit).

In 2024 the budget was balanced (top row). Money comes into the Ath. Dept. from the left and goes out to the right.

In 2025, you had this 20.5million expense (money to spend) that you never had before ('Ath. Rev Share' in Green) which has been allocated a specific way to the major sports (Pollard's control). You need to figure out how to raise money to offset it every year into the future. ISU said we will dip into the Ath. Dept. Savings (Red) to cover the gap short-term. Long Term, how does the Ath. Dept raise money or borrow from other areas (university, board of regents, etc) to fund the 'Red Box'? A problem Pollard and team are trying to solve.

Other universities promising more than 30m a year to football only, are counting on NILGO to account for the remaining amount above what the university is willing/able to contribute (20 million per year max currently for all sports) . This is where Pollard is saying he has no control over how other companies (Hyvee's and Fareway's of the world) choose to spend advertising dollars with athletes within ISU.

I think the grey area for universities right now is that 'Yellow' box. Those are handled outside of the Ath. Dept. budget but are just monitored by someone within the Ath. Dept, so they can see how much players are getting and ensuring it is being done per the university standards. Though, how can universities 'promise' to coaches they will get this much when they technically aren't the ones providing it?

Just trying to provide a little clarity to a complex topic.

View attachment 163001

This is a GREAT visual - THANKS - do you know who all is included in the support 20M - that seems like a big number.

 

[tigercy]

For anyone interested, here is a good short article from Bloomberg on this topic. I found this of particular interest -

"Through NIL Go, the CSC evaluates whether NIL deals are “for a valid business purpose related to the promotion or endorsement of goods or services provided to the general public for profit” at rates NIL Go believes match the market."

Just seems like individually, many of these are going to be hard to pass that test. Again, a lot of the big money funding these programs are not using for the "promotion or endorsement of goods or services provided to the general public". It does not matter how "rich" a program is, anything above $20.5mm must fit the above criteria.

It most certainly is a sh*tshow now and will only get worse. It will be interesting to see if there is ever any enforcement (I'm sure they will come after the ISU/OSUs of the world first)

https://news.bloomberglaw.com/legal...lete-pay-deal-faces-early-enforcement-fumbles

 

[mlendog]

I think you are materially correct in the above analysis (the numbers do not really matter). I think the point with Jamie is that until the red box is fully funded from other than reserves (not sure it is 100% funded by reserves now) anything that looks like B2B needs to fund the red box first.

So to be the question remains - if player A in football is getting $1,000,000 from the green box now and a company comes along and says they want to pay him $1,000,000 in a B2B deal would Jamie would say fine, take the $1,000,000 to reduce the red box (ie general fund) or would be allow it to be a yellow box transaction that goes through the clearinghouse? Don't know the answer to that but seems like a logical question for a reporter to ask.

Regarding other schools spending $30,40 50 million on football, I do not see how this will get through the clearinghouse when it becomes effective (not sure when the B2B deals have to first do to Deloitte). Seems like a relic of NIL collective days. For example, Cody Campbell's donation to TTU collective - in the future, each athlete that gets money from this will have to show a FMV return to the donor or the donor's company. EACH player will have to do that. Not sure what they are doing or how an Oil&Gas exploration company benefits from athlete alignment.

To put another way, if a donor came along and wanted to double our football rev share from 13mm to 26mm and pay each player twice what they are making today (very simple example), each players deal would separately have to go through the clearinghouse, justifying the FMV of their NIL usage for the money they receive. IF the rules are enforced, this is going to cause some real issues. A lot of these big $ supporters around the country are wealthy because they sold their business - what is the value they are receiving?

This will only get uglier.

In your scenario of Player A getting an additional $1million, a few more details matter.


Audi Crooks wears her Audi branded shirt and not a uniform/ISU gear in fareway commercials, so she gets every penny of that deal, and because her agent sourced it.

If say Tamin gets a deal with hyvee, who want him in jersey, they would have to split that $1 million with a portion going to the pot, and some to the player. Smaller deals that include ISU logos/Branding just fund the pot.

This is just a guess, cant know unless someone asks like you said. Pollard mentioned today every scholarship athlete signs over their name, image, and likeness for the $1000 they get, which is why I assume the smaller deals just go to the pot.

We have 10 or so athletes in the "Bigger deal" category, so im sure they do get a split in that scenario case by case.

 

[FriendlySpartan]

For anyone interested, here is a good short article from Bloomberg on this topic. I found this of particular interest -

"Through NIL Go, the CSC evaluates whether NIL deals are “for a valid business purpose related to the promotion or endorsement of goods or services provided to the general public for profit” at rates NIL Go believes match the market."

Just seems like individually, many of these are going to be hard to pass that test. Again, a lot of the big money funding these programs are not using for the "promotion or endorsement of goods or services provided to the general public". It does not matter how "rich" a program is, anything above $20.5mm must fit the above criteria.

It most certainly is a sh*tshow now and will only get worse. It will be interesting to see if there is ever any enforcement (I'm sure they will come after the ISU/OSUs of the world first)

https://news.bloomberglaw.com/legal...lete-pay-deal-faces-early-enforcement-fumbles

Couple things you are missing. The 20.5mil is not NIL, it’s revenue sharing.

It also 100% matters how rich a program as is it is another way to denote value. Also it’s extremely easy to make these numbers work looking at social media and influencers as examples.

All this program does is essentially cut out the lazy programs not even attempting to hide it or programs that don’t have dedicated NIL depts

 

[tigercy]

Couple things you are missing. The 20.5mil is not NIL, it’s revenue sharing.

It also 100% matters how rich a program as is it is another way to denote value. Also it’s extremely easy to make these numbers work looking at social media and influencers as examples.

All this program does is essentially cut out the lazy programs not even attempting to hide it or programs that don’t have dedicated NIL depts

I get that the 20.5 is rev sharing. All deals beyond that are supposed to go through clearinghouse.

It is interesting that a "tip line" (ie a snitch line) is set up to report violations. This will get really interesting in SEC country as they have been snitching on each other forever.

So come January, lots of promises are going to be made in the portal window and all of those promises that are above rev share amount need to have a company aligned with them with a FMV component. I know ISU (and others) will do it exactly as the rules require - call me skeptical on the big $ programs.

 

[FriendlySpartan]

I get that the 20.5 is rev sharing. All deals beyond that are supposed to go through clearinghouse.

It is interesting that a "tip line" (ie a snitch line) is set up to report violations. This will get really interesting in SEC country as they have been snitching on each other forever.

So come January, lots of promises are going to be made in the portal window and all of those promises that are above rev share amount need to have a company aligned with them with a FMV component. I know ISU (and others) will do it exactly as the rules require - call me skeptical on the big $ programs.

I think you might be missing the point in that it’s incredibly easy to get that organization component and to show value. That’s the whole point and why this was never going to affect anything. There are entire depts dedicated to make sure that paperwork will get through the clearing house or appeal if it doesn’t till it does.

 

[twincyties]

These schools and coaches are not stupid.

If someone is "guaranteeing" $X in above the cap NIL it suggests (1) they have a plan for how to implement this in a compliant way, (2) they have the infrastructure in place (or soon will) to administer it successfully and (3) they have the donors lined up with financial commitments to make it happen.

Otherwise, it's a complete set up for failure at best. At worst, it's self-incriminating.

Will there be f**kery involved in these deals? Of course. Will "fair market value" be subjective? Of course. But they'll find a way to do it and we need to adapt to the best of our ability.

The best possible thing we could do is to set up a team inside the university to manage this. Both sourcing the deals and managing the risks that come with it.

 

[Big_Sill]

I get that the 20.5 is rev sharing. All deals beyond that are supposed to go through clearinghouse.

It is interesting that a "tip line" (ie a snitch line) is set up to report violations. This will get really interesting in SEC country as they have been snitching on each other forever.

So come January, lots of promises are going to be made in the portal window and all of those promises that are above rev share amount need to have a company aligned with them with a FMV component. I know ISU (and others) will do it exactly as the rules require - call me skeptical on the big $ programs.

Clearing house and FMV evals aren’t stopping any deals. FMV is what someone is willing to pay in the principal market (NIL deals).

 

[twincyties]

Clearing house and FMV evals aren’t stopping any deals. FMV is what someone is willing to pay in the principal market (NIL deals).

At the risk of sounding terribly naive and knowing full well some schools are going to push the envelope more than others, will this not make it at least somewhat more difficult for schools to just throw money at kids? At least in theory.

Meaning today, I can say "I'm rich and I really like basketball so here is $2M for a PG". Whereas in the future I'd need to (again, theoretically) be some business owner and said PG would need to do some kind of promotion or service for me?

No doubt there will be f**kery that ensues on that front, but I'd think there is getting to be a fairly well established market for endorsements and even social media impressions?

 

[StPaulCyclone]

Thank you for providing this, I hope everyone here reads this. For ISU the good thing is the department is using reserves to fund the rev share. Yes, “cheap” JP had a reserve fund in case of emergency…thankfully! The reserves only have enough for two years. WWC generated $5MM for NIL in its last year. We have to find a way to fund rev share fully in future years, not to mention provide NIL opportunities on top of that.

I am hoping that changes at the Regents will result in the University’s ability to help support the AD, because the broader fanbase will not get it done. I am also hoping with rev share funded that we can put more focus to generating NIL opportunities for athletes.

 

[cydline2cydline]

Thank you for providing this, I hope everyone here reads this. For ISU the good thing is the department is using reserves to fund the rev share. Yes, “cheap” JP had a reserve fund in case of emergency…thankfully! The reserves only have enough for two years. WWC generated $5MM for NIL in its last year. We have to find a way to fund rev share fully in future years, not to mention provide NIL opportunities on top of that.

I am hoping that changes at the Regents will result in the University’s ability to help support the AD, because the broader fanbase will not get it done. I am also hoping with rev share funded that we can put more focus to generating NIL opportunities for athletes.

This is the reason why I did this. It's confusing to talk about it, but when you lay it out on paper it makes sense. It's all about balancing the budget. Lots of nuance around where the money comes from and where it goes, but trying to find 15% more money than you had before is difficult.

Imagine your family made 100k and were just getting by, then suddenly you had to pay an additional 15k per year for something. Where would that money come from? It would be hard to just go out and make 15k more per year and maintain the same level of living, so you might pay less on other things. Similar concept.

 

[BCClone]

I think you are materially correct in the above analysis (the numbers do not really matter). I think the point with Jamie is that until the red box is fully funded from other than reserves (not sure it is 100% funded by reserves now) anything that looks like B2B needs to fund the red box first.

So to be the question remains - if player A in football is getting $1,000,000 from the green box now and a company comes along and says they want to pay him $1,000,000 in a B2B deal would Jamie would say fine, take the $1,000,000 to reduce the red box (ie general fund) or would be allow it to be a yellow box transaction that goes through the clearinghouse? Don't know the answer to that but seems like a logical question for a reporter to ask.

Regarding other schools spending $30,40 50 million on football, I do not see how this will get through the clearinghouse when it becomes effective (not sure when the B2B deals have to first do to Deloitte). Seems like a relic of NIL collective days. For example, Cody Campbell's donation to TTU collective - in the future, each athlete that gets money from this will have to show a FMV return to the donor or the donor's company. EACH player will have to do that. Not sure what they are doing or how an Oil&Gas exploration company benefits from athlete alignment.

To put another way, if a donor came along and wanted to double our football rev share from 13mm to 26mm and pay each player twice what they are making today (very simple example), each players deal would separately have to go through the clearinghouse, justifying the FMV of their NIL usage for the money they receive. IF the rules are enforced, this is going to cause some real issues. A lot of these big $ supporters around the country are wealthy because they sold their business - what is the value they are receiving?

This will only get uglier.

Remember, the 20.5 is considered revenue sharing, not NIL. So they spend their revenue sharing and then all those things like the PE tournament, they can call that NIL. Where we are pulling WeWill in and taking their 10MM for Rev sharing, these schools may not since they have enough to cover. So right there if they took our ratios. We would have around 20 Mm just for football.

 

[isufbcurt]

Here is my shot at making something complicated, less so. I'm not involved or an expert in this area, just a process nerd.

ISU is a non-profit, so largely you have to spend what you make (ie. no profit).

In 2024 the budget was balanced (top row). Money comes into the Ath. Dept. from the left and goes out to the right.

In 2025, you had this 20.5million expense (money to spend) that you never had before ('Ath. Rev Share' in Green) which has been allocated a specific way to the major sports (Pollard's control). You need to figure out how to raise money to offset it every year into the future. ISU said we will dip into the Ath. Dept. Savings (Red) to cover the gap short-term. Long Term, how does the Ath. Dept raise money or borrow from other areas (university, board of regents, etc) to fund the 'Red Box'? A problem Pollard and team are trying to solve.

Other universities promising more than 30m a year to football only, are counting on NILGO to account for the remaining amount above what the university is willing/able to contribute (20 million per year max currently for all sports) . This is where Pollard is saying he has no control over how other companies (Hyvee's and Fareway's of the world) choose to spend advertising dollars with athletes within ISU.

I think the grey area for universities right now is that 'Yellow' box. Those are handled outside of the Ath. Dept. budget but are just monitored by someone within the Ath. Dept, so they can see how much players are getting and ensuring it is being done per the university standards. Though, how can universities 'promise' to coaches they will get this much when they technically aren't the ones providing it?

Just trying to provide a little clarity to a complex topic.

View attachment 163001

Thanks for the writeup, but one correction.

Not-for-profits do NOT need to spend what they make. Almost every not-for-profit I've worked with (auditing them, preparing their 990's, internal control work, etc) has a profit that they carry forward to reserves for future needs.

The "not-for-profit" means they don't have to pay taxes on the income related to their mission but would have to pay taxes on non-mission related income.

For example an eastern Iowa Fair association doesn't have to pay taxes on the profit associated with the activities on their fairgrounds associated with their mission. But they also have a non-mission related activity (stock car races) that they have to pay taxes on the profit if it has one. I'm working on this 990 right now so it is fresh in my mind.

 

[cydline2cydline]

Thanks for the writeup, but one correction.

Not-for-profits do NOT need to spend what they make. Almost every not-for-profit I've worked with (auditing them, preparing their 990's, internal control work, etc) has a profit that they carry forward to reserves for future needs.

The "not-for-profit" means they don't have to pay taxes on the income related to their mission but would have to pay taxes on non-mission related income.

For example an eastern Iowa Fair association doesn't have to pay taxes on the profit associated with the activities on their fairgrounds associated with their mission. But they also have a non-mission related activity (stock car races) that they have to pay taxes on the profit if it has one. I'm working on this 990 right now so it is fresh in my mind.

100% agree. That was my intention with the 'laregly spend what you make' comment. Anyone operating without reserves is asking for financial trouble, which I think Pollard has done a nice job with balancing (from purely an accounting standpoint).

 

[qwerty]

I thought this was a pretty good show about Campbell leaving, NIL, college sports in general, and Jimmy Rogers.
Enjoy!