Paying College Athletes/Letting Them Get Endorsements

[AZ_]

The hardest part is obviously going to be regulation, and I hear the arguments and how its geared to over-value colleges with corporate connections or the bad actors who will be deployed to find a recruiting advantage.

That's a tough logistical question, and the clearinghouse arm of the NCAA obviously has to take control and ensure that everyone is doing this type of stuff on the level.

But the NCAA has had DECADES to modernize and they have just allowed the gravy train to keep rolling as the viral age of marketing has hurt hundreds, maybe thousands of kids who could have been earning money based off their image and likeness.

The time is now, so forcing the NCAA to defend this in court is pushing them in the right direction to change.

 

[Cavatt]

The hardest part is obviously going to be regulation, and I hear the arguments and how its geared to over-value colleges with corporate connections or the bad actors who will be deployed to find a recruiting advantage.

That's a tough logistical question, and the clearinghouse arm of the NCAA obviously has to take control and ensure that everyone is doing this type of stuff on the level.

But the NCAA has had DECADES to modernize and they have just allowed the gravy train to keep rolling as the viral age of marketing has hurt hundreds, maybe thousands of kids who could have been earning money based off their image and likeness.

The time is now, so forcing the NCAA to defend this in court is pushing them in the right direction to change.

There's all kinds of ways they could have regulated it. It could have given them 1k per month with the rest in a trust until the leave school or go pro with hardship allowances for their families. They could have solved this decades ago any number of ways, but they decided to take the hard line and public opinion on the NCAA has changed drastically and now they have to adapt unwillingly instead of in a method of their choosing.

 

[Hurl Bruce]

If this is a state by state thing, then DeWine needs to get on the ball here. This is a huge recruiting advantage.

 

[AZ_]

Indiana fires Archie Miller, but gets $10M from boosters to cover it under the guise of "philanthropic funding"

 

[macbdog]

If this is a state by state thing, then DeWine needs to get on the ball here. This is a huge recruiting advantage.

Under the table money beats over the table any day, Buckeyes still have the advantage.

Indiana fires Archie Miller, but gets $10M from boosters to cover it under the guise of "philanthropic funding"

That's cool to see their supporters step up like that in these trying times.

 

[The Human Q-Tip]

How isn't it that already, is my question.

Yes, but that is a very new phenomenon. I don't think we've yet seen the full ramifications of NIL funding collectives and the transfer portal, though we are rapidly getting there. Although to your point, I am much closer to the "don't much care" phase at this point precisely because of that.

The issue appears to be fans who simply want to turn their relationship with the school into more than it is or can be.

Okay, say that's correct. Then it's just destroying the illusion in which a lot of fans wanted to still believe. It ends up with the same result -- a loss of interest. Although again, there did used to be a much stronger relationships between the state/area in which a school was located, and the players themselves. It was closer to rooting for your local high school team because a higher proportion of the kids were from the same state.

Michigan isn't funding NIL properly because their infrastructure to do so is not something the university has prioritized, which is a miss. They're previous coach (who has since left given the pending, egregious violations) openly advocated for revenue sharing for players.

NIL funding and organization must come from outside the school itself -- usually organized by alumni. UM has the "Champions Circle", which is their NIL collective. The apparent problem is that alumni simply do not contribute enough. So I still don't get some random internet dude ranting against "Ivory tower elites" simply because they choose not to put their money into these NIL collectives. I mean, I'd get it if you were literally just funding a team so that it could play, but that's not what is going on. It is a fund to buy the best players possible. So it shouldn't be a shock to anyone that a lot of private people don't think that is a good use of their own money.

You don't see Ivy League alumni and supporters pouring money to buy NIL players because they cannot offer scholarships for athletics, not because there isn't money or infrastructure to set them up with NIL deals to maximize their value.

Scholarships wouldn't make a shred of difference if the NIL money was big enough. But I don't think the extraordinarily wealthy alumni of those schools care all that much. They prioritize academics over athletics.

 

[AZ_]

Yes, but that is a very new phenomenon. I don't think we've yet seen the full ramifications of NIL funding collectives and the transfer portal, though we are rapidly getting there. Although to your point, I am much closer to the "don't much care" phase at this point precisely because of that.

It’s a disruption to the market, but I prefer to judge based on what is available to me over projection.

College football (and college sports in general) aren’t going anywhere and it’s growing massively in popularity with youth because of the ability to earn money and create the promise of financial stability.


What ramifications could there be? What are these projected negatives that will bring down the empire?

Okay, say that's correct. Then it's just destroying the illusion in which a lot of fans wanted to still believe. It ends up with the same result -- a loss of interest. Although again, there did used to be a much stronger relationships between the state/area in which a school was located, and the players themselves. It was closer to rooting for your local high school team because a higher proportion of the kids were from the same state.

I think we’re just getting older and less emotionally invested. You don’t believe in Santa Claus forever, so the illusion that fans aren’t “adopting sons” from out of state probably isn’t far behind that as we get older.

NIL didn’t turn recruiting into a national trend.

Its national popularity did. Without allowing kids to share in that.

If we’re going to monetize the game at every turn, with the massive growth in the revenue in rights and licensing, the solution to your missing nostalgia isn’t restricting the economic freedom of athletes and allowing the system to hoard wealth beyond “scholarship.”

NIL funding and organization must come from outside the school itself -- usually organized by alumni. UM has the "Champions Circle", which is their NIL collective. The apparent problem is that alumni simply do not contribute enough. So I still don't get some random internet dude ranting against "Ivory tower elites" simply because they choose not to put their money into these NIL collectives. I mean, I'd get it if you were literally just funding a team so that it could play, but that's not what is going on. It is a fund to buy the best players possible. So it shouldn't be a shock to anyone that a lot of private people don't think that is a good use of their own money.

This right here is why revenue sharing model makes the most sense to me.

It’s not just about the elites, it’s about the universities ability (or lack thereof) to build an infrastructure and fundraise from the wealthy and monetize their product.



This disruption into a free agency model happened because the system (NCAA) had restricted the economic freedom of athletics for so long. Accumulating massive sums of wealth and issuing rules against athletes ownership of their likeness so much, that even a conservative SCOTUS spanked them on it.

Allowing revenue sharing to players and even putting cash inducements on bowl games and CFP appearances is long overdue.

Better rules on NIL and the whole existence of “collectives” wouldn’t happen if the ncaa hadn’t worked so hard to restrict economic freedom and evolved their model into something equitable.

 

[inliner311]

We really don't know how collectives are funded. Everyone assumes they are donations from real wealth donors but I'm not sure that's true for Ohio State. I could see it as business owners that will get their return on investment when a player or group of players become good and they then are able to use them in advertising. Kind of like how a hedge fund or venture capital works, you don't need everyone to hit you just need a certain number to hit. For Ohio State that number is probably a better hit rate than the vast majority of other programs so they can make bigger bet across the board. Pair that with being able to market a player all through out Ohio because of the fan base, the Ohio State collectives have an advantage.

I also suspect that they get some sort of NIL kick back from players after they graduate. Like a certain percentage of off field endorsements and ads for a certain amount of years. Like CJ Strouds "donation" is some sort of buyout of his percentage that the collective would get. They just negotiated a lump sum buyout in the form of a donation to go after this group of transfers.

 

[The Human Q-Tip]

It’s a disruption to the market, but I prefer to judge based on what is available to me over projection. College football (and college sports in general) aren’t going anywhere....

That remains to be seen, especially with the push to pay players directly. If they are deemed "employees", then they must be paid. And there's no reason to limit that just to football players, nor would Title IX even permit that. I suspect a lot of schools would simply drop it if that was the case. Obviously not the big football schools, but then, they're not the majority.

I do think that a narrowing of the teams considered competitive -- which I believe is an inevitable result of NIL -- will reduce general interest over time as more people in more regions find out that "Major" college football just doesn't exist for them.

and it’s growing massively in popularity with youth because of the ability to earn money and create the promise of financial stability.

That's just with players, and they're not the ones who support it financially.

What ramifications could there be? What are these projected negatives that will bring down the empire?

Things like that don't happen overnight because there are always legacy viewing habits, etc.. But quite simply, you could price the vast majority of schools out of any kind of competitive balance, in which case you have to wonder if casual fan interest would remain as strong. People never thought baseball would go anywhere either, but attendance and the demographics of that attendance are not good.

This right here is why revenue sharing model makes the most sense to me.

I think that could be sustainable among the very wealthiest, most successful programs, although its obviously not really possible to draw the lines that way. I don't think it would be sustainable for a great many others.

One problem I see is that if you make this a legal argument, either through legislation or court decision, you're necessarily going to rope in a whole lot of programs that barely pay for themselves as it is. And if you tell them that the revenues they collect to fund the program have to be shared with players, that just makes it worse. So they have a choice -- go into the red, or give up the program.

 

[AZ_]

I do think that a narrowing of the teams considered competitive -- which I believe is an inevitable result of NIL -- will reduce general interest over time as more people in more regions find out that "Major" college football just doesn't exist for them.

FCS has figured out a way to remain competitive. It’s not “major” football to be playing at Western Kentucky right now, but it still has regional implications and rivalries.

They monetize HS football — all that to say they can make that secondary division competitive and profitable. Football exists in all capacities, and still provides for college.

Wouldn’t that be closer to your traditional model where they have no economic value?



If this is minor league ball, and make no mistake it is…

These schools outside the top 65-70 would represent Double-A, with FCS being A-ball.

That's just with players, and they're not the ones who support it financially.

Things like that don't happen overnight because there are always legacy viewing habits, etc.. But quite simply, you could price the vast majority of schools out of any kind of competitive balance, in which case you have to wonder if casual fan interest would remain as strong. People never thought baseball would go anywhere either, but attendance and the demographics of that attendance are not good.

The problem is that a lack of balance exists now and we just won’t admit it.

Let’s build out a more competitive post season for those teams and provide financial inducements for participation/winning.


Make football competitive and it will sell at every level.

I think that could be sustainable among the very wealthiest, most successful programs, although its obviously not really possible to draw the lines that way. I don't think it would be sustainable for a great many others.

One problem I see is that if you make this a legal argument, either through legislation or court decision, you're necessarily going to rope in a whole lot of programs that barely pay for themselves as it is. And if you tell them that the revenues they collect to fund the program have to be shared with players, that just makes it worse. So they have a choice -- go into the red, or give up the program.

There will be some level of governance in a post NCAA world.

I see the problem of deeming them employees, but that problem wouldn’t exist if they’d simply not constructed an illegal effort to restrict the economic wealth and profit off these kids.

 

[natedagg]

What if they:
Paid all players from a pool of all revenue. Same base amount.
Had NIL on top of that.
Probably have some sort of method where big programs (profitable) subsidize small ones, beyond paying them to beat up on them.

Do those fundamental pillars work or no?

 

[The Human Q-Tip]

In essence, these sports existed and became popular due to a few players with pro careers essentially subsidizing the rest of the field. I don't think this was fair, particularly with the injury risk but without that subsidy, you lose what made college sports feel special and unique vs pro sports.

I kind of disagree with that. You do have college football junkies who follow all the recruiting of the high end players diligently, but most fans don't. If the best 50 players in college football never went to college at all, but went straight into the pros, I'll bet it would have a negligible effect on the popularity of college football. The non "pro-prep" schools would be unaffected, and even the Alabama/Ohio State/Clemson/Texas fans would still be just as excited chasing a national championship despite the absence of some guys who skipped college completely.

It's the schools themselves - that college "brand" - competing against each other, not the individual players, that are the primary draw. College football was massively popular before pro football was big, and even before TV. You supported the college not because of the particular players, but because they were players representing that college. That was the best underlying source of the attendance/popularity.

Heck, I wish independent minor leagues would start up and siphon off the top 100 or so players from ever entering college at all. I think it would improve college football for fans because you'd have more stability and more 4 year players.

The whole conference re-alignment was another step in this direction where what made sense for individual schools and the top conferences is actually leading to a sub-optimal product. Instead of creating a playoff system that accentuated the regional differences and created an opportunity for rivalries to form both at local schools and across regions, the rise of the conference championship game was too lucrative.

I'm rambling now but I guess what I'm saying is the NCAA is exacerbating the problems that was inevitably coming from a more fair payment scheme to players by actively destroying what made college football unique and attractive vs pro sports

Agree 100%

 

[The Human Q-Tip]

Am I missing something and it’s impossible for the NCAA to go back and put limitations in place if things get out of control in favor of larger schools?

Well...isn't that what we're debating?

NiL plus transfer free agency massively favors wealthier (including alumni $$$) programs. So either we stay with it an live with the consequences, or we add limitations.

I think the key point that takes this out of the normal economic realm is that you can't sign college players to enforceable multi-year contracts. So what we're really seeing is something like what pro sports would be if there were no multi-year player contracts at all, players could be signed only for one year, and there was no salary cap.

I struggle to see why it’s a step in the wrong direction to let players receive profit from their likenesses that otherwise goes to schools. We’ve done this with literally everything else in the history of America as far as I’m aware. Why should this be an exception?

Apart from the above point, the reality is that NiL isn't really compensating players for the commercial value of their likeness in ads, etc... It's just a way for wealthy alumni to legally funnel money to players to convince them to come and play for their school.

 

[The Human Q-Tip]

What if they:
Paid all players from a pool of all revenue. Same base amount.
Had NIL on top of that.
Probably have some sort of method where big programs (profitable) subsidize small ones, beyond paying them to beat up on them.

Do those fundamental pillars work or no?

I don't think so.

For starters, you've basically eliminated any incentive for schools to try to increase their own revenue, because they'd have to divide the increased revenue with hundreds of other teams that aren't spending nearly the same amount of money on their own programs.

There's also the Title IX aspect, which essentially further divides all that shared revenue in half, with the other half going to women's sports.

I also think a lot of these plans don't consider the fundamental underlying reality that the overwhelming majority of college athletic departments are a net drain on the financial resources their school. So there's not a massive pool of "profit" out there to be shared.

 

[2 For The Brew]

Many schools are going to be concerned about diversion of alumni money to athletes and away from donations for other purposes. Falling enrollments are already a fact of life and tons of money going to de facto pro athletes playing for State U is going to make any case for public financial support of schools more difficult.

This won’t be a huge issue for the Alabamas and Ohio States but mid tier schools are going to think long and hard about this.