Navigating NIL: Issues and their implications
Editor’s note: This is part two of a five-part series looking at the intricacies and practices of the NCAA’s new Name, Image and Likeness Policy approved last year.
INDIANAPOLIS (BVM) — With so much flexibility from one school to the next and one state to another, things have gotten a bit murky when understanding the complexities of NIL and what is and is not allowed. Due to this, over the past couple years, since the NIL movement seemed imminent, companies have been created to help NCAA student-athletes understand the changing nature of the sport around them and how they can take advantage of it. In the case of Michelle Meyer, a former University of California-Santa Barbara volleyball player and University of Hawaii volleyball coach, she created the NIL Network which aims to deliver content, guidance and resources to athletes, coaches and administrators to guide NIL-related decisions in the new market. These resources include an NIL athlete service provider directory, an institution-NIL database and a listing of businesses created by student-athletes, a new opportunity now provided to athletes.
In this way, Meyer is hoping to not only open the doors to the wide wealth of opportunities that can be given to athletes, but also educate and advise them so they make the right decision for themselves and their future.
“I started NIL Network in November 2020, basically trying to build a hub of resources for athletes, coaches and administrators to understand all the nuances and layers of NIL as they came to college sports,” Meyer said. “NIL Network really just tries to create any type of resource that helps people understand all of the changes.”
Schools have adopted this idea too, with many either offering courses or programs that can directly help athletes navigate the ins and outs of the NIL landscape without directly facilitating deals or violating NCAA rules. For athletes, a lot of schools have even created courses within their business programs to help the players understand the new laws, according to Meyer.
At the University of Illinois, its program is called INFLUENCE and it looks to help athletes by teaching them key ideas of business understanding such as brand strategy and development, business innovation and entrepreneurship and financial literacy.
“For us, we see NIL as really a second classroom,” University of Illinois Athletics NIL Director Kameron Cox said. “It gives us a tangible opportunity for us to teach the things we should be teaching young people anyway…NIL gives me an opportunity to dangle a little bit of money in front of you and give you a real framework of learning. It really allows us to apply what we’re otherwise doing here and furthers the educational mission of the university.”
However, there have still been hurdles to overcome for athletes, programs and even businesses for them to fully understand what is and is not allowed. In some cases, NIL deals have been created for whole teams in which they can be compensated for certain deliverables like Howard University’s deal with College HUNKS. Howard players will receive a specified dollar amount up front to be split evenly and will also have opportunities to individually earn more money through incentives with the company by bringing in new clients or employees.
In other cases, such as BYU football’s deal with Built Brands LLC where the individual NIL deals include compensation to all members of the team, including compensation to all walk-on players in the amount comparable to the costs of tuition for the academic year in exchange for players wearing Built branding on their practice helmets and participate in experiential events, the NCAA is probing if the deal violates its policy.
This confusion has caused issues among schools and businesses, something the NCAA warned of back when it had to come up with its own policy as the lack of a national ruling makes the NIL world a bit of a free-for-all.
“I think some of those investigations, in my mind at least, the NCAA doesn’t have a lot of power to push back on what is happening so far,” Meyer said. “The NCAA needs a federal bill because they can’t change any of these rules.”
Emmert: "We are in fact conducting investigations into a number of deals to make sure we understand them. So far, in most cases, schools are following the guidelines quite well. But we’ve got to have national clarity on what the rules and we can’t do that without Congress."
— Ross Dellenger (@RossDellenger) December 8, 2021
Another thing that has made the ruling difficult to understand is how the NCAA can police it. In terms of its own rules, the NCAA cannot punish an athlete for getting NIL deals with third-party companies. This has opened the floodgates for companies, many helmed by alumni or former student-athletes of the schools themselves, to create what are known as collectives, organizations which help create and implement NIL deals for athletes at a specific school.
These collectives are not a part of the institution, so they are not violating the NCAA’s rules on using NIL deals, unless it is used specifically to recruit a player. However, they do provide exclusive NIL deals and opportunities only to the athletes of the school of their choice. Such collectives have been created by University of Texas and University of Oregon alumni, among others, and it is all on the level based on NCAA rules.
“I think it’s going to be hard for the NCAA to pull back on any of these yet and honestly I don’t think the NCAA should,” Meyer said. “At the end of the day, it’s still not the institution paying the athlete, but they are creating these organizations connected with local businesses and giving NIL opportunities. The thing that is really scary to me about collective groups are the ones that are more independent and just started by your top booster.”
“They’re all so different,” Cox said. “Some of them are run by a couple of really financially well-resourced people. Some are really a crowdfunding mechanism. Some of them are subscription services, some of them are one-offs, some of them are team-oriented, some of them are university-oriented. They exist in so many capacities and it’s a world that we’re all trying to navigate and think about and it’s been cool to see them pop up.”
One of the companies getting in on the collectives craze, though not as a booster supported group, is Student-Athlete NIL (SANIL), a third-party organization that works directly with brands, individuals and other groups to help identify partnerships for student-athletes that best align with the activation for numerous schools across the country.
SANIL and its collective branch, known as Student-Athlete Empowerment (SAE), have created numerous groups working with student-athletes from specific schools across multiple levels of college athletics with SAE groups at institutions like Creighton, Florida, Fordham and Robert Morris, among others. A professionally-backed group with a fleet of lawyers and law professionals, SANIL aims to keep all its deals on the level with a more dedicated focus than other collectives that are run by rich alumni or program donors.
“Collectives are the perfect case study of free market economics,” SANIL Chief Executive Officer Jason Belzer said. “SAE and SANIL is the only company right now, to my knowledge, that is doing professionally-managed collectives, meaning we’re not like a one-off at a school; we go to all different schools and create this opportunity and this program and do it in a way that is above board. It is not illegal, not violating rules, maximizing benefits for student-athletes, creating these opportunities.
“If a group of people believe there is a value for student-athletes to make money…who am I to stop them? These student-athletes were making nothing before. Yes, there are certainly groups of donors that are saying like, ‘Let’s go buy a championship by getting these recruits.’”
While some of these collectives seem to have questionable motives, many feel like this is likely the trend most top programs will follow based on how it eases the work for the student-athletes and local businesses.
“I think those collective groups, every [NCAA Division I school] is going to have one in the next three years,” Meyer said. “It just makes sense for engaging your local community and local businesses. There’s so much friction right now between how athletes can find a deal and also how a local business can work with an athlete of a local school.
“There are schools that are saying, ‘Hey we have an opportunity for alumni who don’t have an existing business but want to help student-athletes, want to engage with them, but don’t have the means or understanding as an institution can be involved because of the law.’ We need to work with somebody like SAE who can facilitate that and it’s a win-win for everybody and there’s no nefarious, underlying goal.”
Add to this rich alumni who have their own companies or are large stakeholders in a company. There seems to be some confusion if they are allowed to use their company as a front to “sway” an athlete to their former school. An example of this recently came up with quarterback Caleb Williams, a freshman phenom at the University of Oklahoma. After he entered his name into the transfer portal on Jan. 3, the highly-touted QB received the attention of Charlie Batch, a former NFL quarterback and now the Senior Vice President of Strategic Investments for CapStone Holdings. In a tweet by Batch, he offered Williams $1 million from a branch of his company, GameAbove Capital, to play at Batch’s alma mater, Eastern Michigan University.
Hey @CALEBcsw, have you considered Eastern Michigan, @EMUFB? If not, you SHOULD. GameAbove Capital is prepared to pay you ONE MILLION DOLLARS for one year! Are you ready be an EAGLE?@espn @CBSSportsNet @CBSSports @NBCSports @FOXSports @barstoolsports @MACSports @FS1
— Charlie Batch (@CharlieBatch16) January 5, 2022
“That would’ve fallen under pay for enrollment so that would be a violation of the interim policy in place,” Meyer said. “In my mind, I’m like, by putting that tweet out you have now taken your school out of it completely because now he can’t go to that school without a serious investigation by the NCAA.”
While this does seem like a clear violation of the NCAA rules, providing funds from an NIL deal to commit to a specific university, it does show the difficulty companies have had with the ruling. The state of Michigan currently doesn’t have legislation on NIL going into effect until the end of 2022, meaning that the deals are institution by institution as long as they follow the NCAA’s broad rules. Once again, the idea of a free-for-all becomes apparent. Some have argued that this trend is already impacting college recruiting.
“Recruits are going to start talking about it or asking about it if they haven’t yet and I know they have,” Meyer said. “I think there’s going to be a trickle down. They are already asking at the football and basketball levels but I think it will trickle down to Olympic sports eventually…because kids do care about making a little extra cash and now that they actually can, I think that’s going to be a part of the recruiting conversation.”
Click here for part 1: What is the NCAA’s policy and who does it impact
Click here for part 3: The athletes
Click here for part 4: The coaches