NCAA set to allow direct payments to athletes

[MountainManHawk]

You can't compare these deals with other CFB or CBB deals. You compare to deals outside of those industries where there is no incentive to massively overpay with intentions outside of just true NIL.

I guess, but athletes in different sports have different NIL value so it will be weird to say that college football players can’t have a higher endorsement value than other leagues.

It’s hard to debate without a specific example because this is all hypothetical but the first time the clearinghouse tries to invalidate a deal I’m sure there will be a lot of controversy.

Like if the clearinghouse tries to say that Miami is over-paying Carson Beck, can’t Miami just challenge that by saying they paid Cam Ward a similar amount and Texas paid Arch Manning a similar amount, and so on and so forth?

And what about the first time the clearinghouse says a player can’t get paid at a given university and then he goes to a different school and gets offered an endorsement deal for a similar amount to the first one? Does that not prove that he was being offered FMV the first time?

 

[goody2012]

I guess, but athletes in different sports have different NIL value so it will be weird to say that college football players can’t have a higher endorsement value than other leagues.

It’s hard to debate without a specific example because this is all hypothetical but the first time the clearinghouse tries to invalidate a deal I’m sure there will be a lot of controversy.

Like if the clearinghouse tries to say that Miami is over-paying Carson Beck, can’t Miami just challenge that by saying they paid Cam Ward a similar amount and Texas paid Arch Manning a similar amount, and so on and so forth?

And what about the first time the clearinghouse says a player can’t get paid at a given university and then he goes to a different school and gets offered an endorsement deal for a similar amount to the first one? Does that not prove that he was being offered FMV the first time?

Again, comparing CFB deals with CFB deals won't work. It has to be compared to deals outside of CFB.

 

[cykadelic2]

Like if the clearinghouse tries to say that Miami is over-paying Carson Beck, can’t Miami just challenge that by saying they paid Cam Ward a similar amount and Texas paid Arch Manning a similar amount, and so on and so forth?

The current and prior year markets were primarily a pay for play market, not True NIL. Completely irrelevant for comparison purposes after July 1st.

And that is why there is a current mad rush to get all these ongoing & grossly inflated "NIL" deals disguised as Pay for Play executed and paid before July 1st.

 

[MountainManHawk]

Again, comparing CFB deals with CFB deals won't work. It has to be compared to deals outside of CFB.

I get how this is supposed to work in practice I’m just struggling to see how it would hold up in court because when there are so many schools wanting to pay so many players it feels like that is going to create its own established FMV.

And the first time a school like Miami gets told they can’t poach the QB from WSU in the portal because the proposed NIL deal is above FMV I don’t imagine everyone involved just letting it go.

Again it’s hard to debate before we have a specific example but it feels like people are trying to say that starting this year the wealthy schools won’t be able to buy the best recruits with NIL and I wish there was a way to bet on that because I think I would bet all that I could that in 5 years the QBs at Texas and Ohio State and a bunch of other places will still be getting millions of dollars in NIL above and beyond whatever salary cap we try to impose on them.

 

[MountainManHawk]

The current and prior year markets were primarily a pay for play market, not True NIL. Completely irrelevant for comparison purposes after July 1st.

And that is why there is a current mad rush to get all these ongoing & grossly inflated "NIL" deals disguised as Pay for Play executed and paid before July 1st.

I’ve read that too in a few articles so I understand why you say that, I’m just cynical that it’s really going to work as intended. For example, Ohio State basically just bought themselves a national title when their donors spent $20m putting together a great roster. And I’m just struggling to imagine a system where the NCAA successfully prevents those donors from funneling bags of cash to recruits in the future.

Like if the clearinghouse rules that the autograph of a WR at Ohio State isn’t worth more than $50, do we then force the poor kid to sign 100,000 different autographs so that the Ohio State donors can legally give him the $5m they want to give him? I guess we could get the kid an auto pen to sign that many autographs and then the donors can distribute those autographs to all the kids in a hospital across Ohio and then the whole thing is legal and we successfully got the kid his $5m and everything is legit according to the clearinghouse.

 

[cykadelic2]

I’ve read that too in a few articles so I understand why you say that, I’m just cynical that it’s really going to work as intended. For example, Ohio State basically just bought themselves a national title when their donors spent $20m putting together a great roster. And I’m just struggling to imagine a system where the NCAA successfully prevents those donors from funneling bags of cash to recruits in the future.

Like if the clearinghouse rules that the autograph of a WR at Ohio State isn’t worth more than $50, do we then force the poor kid to sign 100,000 different autographs so that the Ohio State donors can legally give him the $5m they want to give him? I guess we could get the kid an auto pen to sign that many autographs and then the donors can distribute those autographs to all the kids in a hospital across Ohio and then the whole thing is legal and we successfully got the kid his $5m and everything is legit according to the clearinghouse.

I agree that rogue boosters will attempt to circumvent the Clearinghouse and RevShare Cap after July 1st and some will not get caught. But if/when House gets codified, the threat of getting caught will be greater than in the past with the enforcement arm having Fed subpoena power and punishment being administered under Fed code/regulations in a similar manner to the IRS.

 

[CloneJD]

I’ve read that too in a few articles so I understand why you say that, I’m just cynical that it’s really going to work as intended. For example, Ohio State basically just bought themselves a national title when their donors spent $20m putting together a great roster. And I’m just struggling to imagine a system where the NCAA successfully prevents those donors from funneling bags of cash to recruits in the future.

Like if the clearinghouse rules that the autograph of a WR at Ohio State isn’t worth more than $50, do we then force the poor kid to sign 100,000 different autographs so that the Ohio State donors can legally give him the $5m they want to give him? I guess we could get the kid an auto pen to sign that many autographs and then the donors can distribute those autographs to all the kids in a hospital across Ohio and then the whole thing is legal and we successfully got the kid his $5m and everything is legit according to the clearinghouse.

The booster can’t give him $5M under the rules. That’s the point. The athletic departments desperately want that money back in the athletic departments coffers (including Big 10 and SEC)..

 

[MountainManHawk]

The booster can’t give him $5M under the rules. That’s the point. The athletic departments desperately want that money back in the athletic departments coffers (including Big 10 and SEC)..

But would it really be illegal to buy 100,000 autographed cards for $50 each and then give them away to poor kids? I’ll have to re-watch that movie Brewster’s Millions and I’ll probably be able to figure out a bunch of other ways to legally get the kid $5m that would be hard for anyone to claim is illegal.

 

[MountainManHawk]

I agree that rogue boosters will attempt to circumvent the Clearinghouse and RevShare Cap after July 1st and some will not get caught. But if/when House gets codified, the threat of getting caught will be greater than in the past with the enforcement arm having Fed subpoena power and punishment being administered under Fed code/regulations in a similar manner to the IRS.

Thanks, I appreciate the response. And for the record I obviously hope you are right. As the fan of a team that will never out-spend Ohio State, it’s not like I want the current system to last.

 

[CloneJD]

But would it really be illegal to buy 100,000 autographed cards for $50 each and then give them away to poor kids? I’ll have to re-watch that movie Brewster’s Millions and I’ll probably be able to figure out a bunch of other ways to legally get the kid $5m that would be hard for anyone to claim is illegal.

None of this has to do with what is considered ‘illegal’. It’s contract law.

By accepting an NCAA scholarship the athlete agrees not to accept NIL that isn’t vetted by the clearinghouse. The restraint is on the athlete, not the booster.

 

[isucy86]

Arguably the House settlement included enough current players that the courts will consider it to be collectively bargained. That will be the point of contention once it is challenged.

I believe the House settlement only runs for 10 years too. After that there would have to be some type of collective bargaining to keep the cap.

IMO that is a critical part. House only applies for 10 years.

That window gives players the payday the courts feel the athletes are due.

But more importantly it gives schools a reasonable period to implement a long-term structure that won't have the schools back in the courts 10 years from now.

The other interesting aspect for me is the Ivy League schools aren't going to opt-in. Will that be a divergent parallel student-athlete path from the P4 structure (aka $20M revenue sharing). That over the next 10 years FCS, G5 and some P4 might choose?

 

[isucy86]

A lot of legal speculation about the Clearinghouse. Hopefully, the NCAA has good lawyers, and it meets it intended purpose.

But who knows, maybe the NCAA intents the Clearinghouse to be a paper tiger.

That said, it seems like transparency is the key to enforcement. If all NIL deals become public information, does that tamper down pay-for-play. The who got paid (athletes), is less important than who paid/funded the NIL.

And the penalties for athlete and school need to be clear and significant. For schools think SMU death penalty. It's the price schools pay to have athletics being their marketing arm and access to hundreds of millions in TV money.

 

[aeroclone]

None of this has to do with what is considered ‘illegal’. It’s contract law.

By accepting an NCAA scholarship the athlete agrees not to accept NIL that isn’t vetted by the clearinghouse. The restraint is on the athlete, not the booster.

The clearinghouse is the weak link. The idea of FMV is that the efficient market sets the price. In my mind, the market is already set at these crazy payment levels. There are tons of donors and collectives willing to pay tons of money for these kids in exchange for a few token appearances, plus playing for the team. That is the market.

There are lots of car dealerships in the country willing to pay millions for a P4 QB to do a commercial and there are lots of P4 caliber QBs out there willing to take that deal, then it is a fair market value. Who cares if it is 50x the amount the same dealership would pay some local celebrity to do the same ad? They simply claim the athlete is more valuable to them and point to all the other dealerships trying to do the same deals as the data to justify it.

 

[cykadelic2]

The clearinghouse is the weak link. The idea of FMV is that the efficient market sets the price. In my mind, the market is already set at these crazy payment levels. There are tons of donors and collectives willing to pay tons of money for these kids in exchange for a few token appearances, plus playing for the team. That is the market.

There are lots of car dealerships in the country willing to pay millions for a P4 QB to do a commercial and there are lots of P4 caliber QBs out there willing to take that deal, then it is a fair market value. Who cares if it is 50x the amount the same dealership would pay some local celebrity to do the same ad? They simply claim the athlete is more valuable to them and point to all the other dealerships trying to do the same deals as the data to justify it.

For the umpteenth time, the current market is a pay for play market being shifted to AD Revshare. It will not set the True NIL market beyond 7/1.

And for the umpteenth time, the True NIL FMV standard to be applied by the Clearinghouse under House is not what a rogue booster is willing to pay to satisfy their on-field or on-court jollies of the college team he/she supports.

 

[ruxCYtable]

The booster can’t give him $5M under the rules. That’s the point. The athletic departments desperately want that money back in the athletic departments coffers (including Big 10 and SEC)..

But the booster still will. And no one will know because that player was already a millionaire.

 

[FinalFourCy]

The booster can’t give him $5M under the rules. That’s the point. The athletic departments desperately want that money back in the athletic departments coffers (including Big 10 and SEC)..

The P2 want it fully under the AD because as the cap grows mostly from the P2 revenue increasing, player compensation only coming from AD revenue is a big advantage for them.

Prisoner dilemma isn’t going to allow the AD to keep those donations, but removing 3rd party inducement would allow the P2 to leverage their TV rights and such

 

[Nolaeer]

The real winners are the Auburns and Ole Miss-type teams who have consistently flouted the rules. They will still pay what they can and hope their rivals abide by the rules.

 

[aeroclone]

For the umpteenth time, the current market is a pay for play market being shifted to AD Revshare. It will not set the True NIL market beyond 7/1.

And for the umpteenth time, the True NIL FMV standard to be applied by the Clearinghouse under House is not what a rogue booster is willing to pay to satisfy their on-field or on-court jollies of the college team he/she supports.

These boosters aren't rogue, there are tons of them. And what is the definition of a bunch of buyers interested in procuring the same product? A market.

All you guys running around convinced that this change is going to fix NIL and make it work the way it is supposed to crack me up. It is just like the countless posts cheering on the initial rollout of NIL believing it was just going to let some college kid monetize their YouTube account and that there was no way it would turn into a pay for play free for all. Ha.