Lebanon, TN – Several articles came out this past week glorifying the development of NIL deals. Outside of a few “student-athletes” making the big bucks on for their names, images and likenesses, only certain schools will profit even more. That seems to be the intent. As more money pours in from many sources, especially for new monies earmarked for NIL deals, schools benefit. They will avoid ever having to actually pay their intended future college football playing employees.
NIL deals will transcend scholarships
Those who believe these highly-paid, “pretty” people should be paying their own way through college, will get their wish. Schools will no longer offer football scholarships. Players will become employees eventually, instead of “student- athletes.” It sounds like the plan is already underway. Everything colleges want to do is going as planned as predicted in my book, Fifty Years of Tailgate Tales: The Good, the Fun and the Ugly. A great thing occurring for the anticipated 40-48 schools who will break away from the NCAA to form a new college football association, their employees will now pay them for the education while working for them. Contract money will be paid by collectives. The question arises though, will player contracts then be initiated to slow down the transfer portal?
In Sam Neumann’s story online in Awful Announcing on February 15, 2024, “College athletes to receive NIL money for documentary appearance,” a new documentary called Money Game. It will be released soon depicting the LSU athletic program and the NIL deals that benefit their athletic program. The Prime Video release refers to this documentary as “a historic turning point in the NCAA upon policy changes on name, image, and likeness (NIL) rights—guaranteed to shape the trajectory of college sports forever.” It highlights four NIL deals. They include three for elite LSU woman athletes and for outgoing Heisman Trophy winner, quarterback Jayden Daniels. Daniels ranked fourth among college football players with value from NIL deals.
A degree of discomfort with NIL deals
Produced by Campfire Studios, Axios Entertainment, and Jersey Legends, a production company founded by Shaquille O’Neal, well-known LSU basketball alumnus, the article goes on to say that the athletes featured in Money Game “will receive payment under the guise of ‘NIL compensation.’” Employees featured on it, such as coaches of each of the players, will not. The word “guise” here almost makes it seem like there is a concern that these appearances could construe potential NIL violations. Arrangements here can be totally legal. However, perceptions may challenge some views. NIL deals are not only new, but possibly still unclear to the general public. Rules vary by state making NIL deals inconsistent from school to school. How fair is this?
More money, more money
On the same day of Neumann’s story above, InsideHook released this article by Michael Stahl, “University of Michigan Unveils Major NIL Expansion.” On February 14, U of M’s athletics department invested in a strategic formula for “the growth of its in-house NIL (Name, Image and Likeness) program.” They created two new positions dedicated to strengthening the school’s marketability. They offer NIL deals with the respective assistance of Altius Sports Partners, an advisory firm focused on NIL deals, and Learfield, a sports marketing company.
The new positions of executive general manager and senior manager of business development will “empower its student-athletes” and provide “forward-thinking initiative.” The report goes on to say this strategic move will offer “specialized expertise, enabling them (student athletes) to navigate and maximize NIL opportunities skillfully.” Stahl concludes that this means,” they’ll have a better chance to make more money at Michigan.”
What is the Law?
What statement other than that last one cannot be clearer that college football is on its way to becoming a professional football league? “Pay for play” is supposedly not what college football is about, but the momentum is certainly taking it in that direction. What this article does not explain is what current Michigan laws are in place regarding NIL deals. Again, these laws vary from state to state. There still exists many uneven playing fields when it comes to college football recruiting.
ESPN Staff Writer Dan Murphy wrote an article online on January 10 entitled, “NCAA approves new NIL rules to help athletes ‘protect themselves.‘” Very interesting and well transcribed scenario. The NCAA makes a proposition to continue the implementation of NIL deals for the good of the players to share the wealth. It also proposes to make changes to level the playing field as prescribed here for all college football programs. Two days after this proposal was made, Marc Edelman, Senior Legal contributor for FORBESBUSINESSSPORTSMONEY, published an article online, “New Challenge To NCAA NIL Rules Is ‘Engineered’ On Firm Legal Ground.” Edelman specializes in legal issues regarding sports, fantasy sports and online gaming.
Anti-trust precedence
In it, he highlights a precedence presented by the National Society of Professional Engineers that had “attempted to defend their competitive bidding restraints by arguing that an important social policy goal—promoting customer focus on the safety of engineering—needed to supersede free market forces.” They tried to use this argument to have their customers select engineering sources based on safety before finalizing a price. This move undermines price competition, exactly what the Sheman anti-trust laws prevent. Being a Purchasing Professional for 42 years, I never would have agreed to this. We would always consider the entire value of the package including price quotes along with other pre-determined parameters like quality, service, and payment terms. An engineering firm could present safety parameters along with a pricing proposal simultaneously.
Edelman links his article to his previous Case Western Reserve Law Review, Vol. 64, No. 1, 2013 (41 Pages Posted: 1 Mar 2013 Last revised: 3 Dec 2013), “A Short Treatise on Amateurism and Antitrust Law: Why the NCAA’s ‘No Pay’ Rules Violate Section One of the Sherman Act.” Date Written: February 28, 2013. He points out that in recent years, “some NCAA members have become increasingly wealthy – grossing annual revenues upwards of $100 million per year. “In the case of the University of Texas, they gross over $200 million. He clarifies that by resisting the “opportunity to share their wealth with student-athletes,” the NCAA violates basic anti-trust laws.
College Football Reformation
Interestingly to me, he confirms what I surmised in my book. He states in his treatise, “Finally, Part VI concludes that even if a court were to find that competitive balance is a reasonable basis for upholding certain “no pay” rules, such rules still should not come from the NCAA, but rather from the individual conference level.” This justifies my premise that 40-48 “power” football programs, based on the higher revenues that they make and seek, will terminate their memberships with the NCAA.
The remaining Football Bowl Subdivision (FBS) teams basically in the Group of Five conferences will be on their own. The new Super Conference of 40-48 will establish their media contracts, their recruiting rules, post-season competition and their future independently of the NCAA membership, if the organization still oversees any football. The remaining teams may stay as full members of the NCAA. They can then abide by whatever rules they come up within each conference if they agree to equalize the level of playing competitively.
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The next challenge legally, however, will be how and if the players from within both organizations will be allowed to move from one to the other through current transfer portals. That will most likely still become another anti-trust issue. To read more about how and why this is happening, purchase my book, Fifty Years of Tailgate Tales: The Good, the Fun and the Ugly. The last two essays presented lay out what to expect, but definitely sooner than I expected.
Steve Koreivo, ed. Member of Football Writes Association of America
