NCAA to soon pass name, image and likeness rules targeting boosters offering inducements to athletes (Dodd)

[huskymedic]

NCAA to soon pass name, image and likeness rules targeting boosters offering inducements to athletes

The NCAA is prepared for lawsuits stemming from forthcoming legislation

www.cbssports.com

->"We know we're going to get lawsuits," Ohio State athletic director Gene Smith told CBS Sports on Friday.

Smith is a member of a little-known NIL working group formed about two months ago to deal with growing questions of illicit activity. Despite the threat of legal liability, Smith said the NCAA and his subcommittee are determined to put up meaningful guardrails around NIL, which in some cases has edged close to pay-for-play.

The working group's recommendations submitted this week primarily deal with booster involvement. Several monied boosters have developed "collectives" establish NIL opportunities for athletes. NCAA stakeholders have long been suspicious of such collectives becoming direct inducements for recruits and transfer candidates.

"What's happening in that space is what we were all fearful of," Smith said. "What's going on -- on campuses [with existing scholarship athletes] -- currently is fine. It's the inducement pieces. We gotta kill that. If we don't kill that now, forget it." <-

 

[SubbaBub]

Wouldn't any licensers become by boosters by default? Aren't agents (ad hoc collectives or not) essentially boosters?

These are rhetorical questions that can only be affirmed by killing NIL eligibility, which is certainly impossible now that the barn door has been opened.

If a group of fans wants to start the Boneyard Licensing LLP, there is nothing the NCAA can do that won't cost them millions in court judgements.

They can try to defer payments to the players through escrow, but that's equally unlikely.

Of course, if you've ever dealt with university bursars, you know they have ways of holding onto money that doesn't belong to them.

 

[olehead]

So back to ground zero where we pretend the decades long tentacles of old-time fat-pocket "friends" of SEC and some BIG programs never had and don't continue to exist.

Actually, not true, the reality is - recruits now see institutionalized monetization opportunity governed by the NCAA plus the same old booster -now collective- deep pocketed opportunities more likely found in the SEC, BIG.

 

[shizzle787]

It's time to go to a pay for play model. I'm not a fan of schools paying the players as I don't think (with the exception of the 30 or so schools that make a profit on sports and the 5% or so of players that have a market value greater than their educational package) many players are worthy of getting paid above and beyond their scholarship package. However, the cat is out of the bag and there need to be guardrails quickly so we need to go to a system where the athletes are still students but are under a CBA.

 

[McLovin]

This is laughable and shows how delusional the NCAA is. There is no way of reigning this in now. How could they?

If the mafia and political campaigns can hide where their money is coming from, I’m pretty sure these collectives can do the same.

The NCAA knew this was coming and failed to prepare. This is on them.

BTW I’m totally fine with NIL / these collectives. It was happening anyways, glad it’s now legal and has opened up more opportunities for the athletes.

 

[bmayuc]

These people are insane. Can't wait for a judge to ask them. "So they aren't employees? But you can restrict their economic rights?"

 

[buddy]

I would like to know if they have to file income tax on NIL money. I am assuming that scholarships are not taxable.

 

[uconndogs]

At the top level of collegiate athletics it's professional sports. It's a done deal. That NIL is not going to be used as to induce players is never going to happen and could never be effectively enforced anyway.

It will be huge money and it will drive the final stake between the haves and the have nots. I still believe 30-40 programs breakoff from the NCAA and they will be primarily SEC and BiG programs. Sad in my book, but maybe most folks will enjoy it.

 

[uconndogs]

I would like to know if they have to file income tax on NIL money. I am assuming that scholarships are not taxable.

That money will most certainly be taxable to the recipient and will most likely result in some kids getting in tax trouble on top of everything else. Hopefully the athletic departments provide some guidance for the athletes on this and other issues.

 

[CL82]

These people are insane. Can't wait for a judge to ask them. "So they aren't employees? But you can restrict their economic rights?"

Disagree. The NCAA is a voluntary organization. They can set limits on outside earnings in order to be a participant. That is what they should have done from the get-go instead of “leaving it up to the states or federal government“ which was just weak and feckless. Putting outside earnings cap of $20,000 for year per player would level the playing field considerably.

( A little more difficult to implement would be some kind of longevity/business purpose test for organizations who are purporting to hire student athletes. It would be endormously helpful because it would take these start up collectives out of the game.)

 

[McLovin]

Disagree. The NCAA is a voluntary organization. They can set limits on outside earnings in order to be a participant. That is what they should have done from the get-go instead of “leaving it up to the states or federal government“ which was just weak and feckless. Putting outside earnings cap of $20,000 for year per player would level the playing field considerably.

( A little more difficult to implement would be some kind of longevity/business purpose test for organizations who are purporting to hire student athletes. It would be endormously helpful because it would take these start up collectives out of the game.)

They had an earning cap of $0 before NIL was legal, and many programs got around that…

If they go the business purpose test route, they will just launder the money through a donors legitimate business.

You’re not wrong about either being a possible solution (although I personally disagree with any sort of individual earning cap) but they will always find ways around it.

 

[CL82]

They had an earning cap of $0 before NIL was legal, and many programs got around that…

If they go the business purpose test route, they will just launder the money through a donors legitimate business.

You’re not wrong about either being a possible solution (although I personally disagree with any sort of individual earning cap) but they will always find ways around it.

Cheating is always gonna be a problem, the idea is to even the playing field to the greatest extent possible. Right now, it’s the wild West. People say “well there’s always been cheating“ but it is nothing like we’re seeing now. Huge amounts of money are being openly assembled. It is a mess. The sad part is it was totally foreseeable and, thus, avoidable.

 

[McLovin]

Cheating is always gonna be a problem, the idea is to even the playing field to the greatest extent possible. Right now, it’s the wild West. People say “well there’s always been cheating“ but it is nothing like we’re seeing now. Huge amounts of money are being openly assembled. It is a mess. The sad part is it was totally foreseeable and, thus, avoidable.

Agreed.

I think the biggest problem is actually enforcing whatever they choose to regulate.

Unfortunately, the NCAA has made it pretty clear that they will never punish their cash cows regardless of how ridiculous the violations are.

Case in point is a FBI probe that sent people to jail over pay to play, and the NCAA just handed over a national championship trophy to one of the teams implicated.

More “regulation” for the purpose of regulation won’t bridge the gap between the haves and have nots.

Requiring transparency about how much money is moving around and actually enforcing whatever set of rules they create is the only things that would actually “level” the playing field (which will still skew largely towards benefiting top programs)

 

[HuskyHawk]

Cheating is always gonna be a problem, the idea is to even the playing field to the greatest extent possible. Right now, it’s the wild West. People say “well there’s always been cheating“ but it is nothing like we’re seeing now. Huge amounts of money are being openly assembled. It is a mess. The sad part is it was totally foreseeable and, thus, avoidable.

Yes. They can and should solve this. The idea was to allow kids to profit off their NIL. So they can make money on Instagram, YouTube, TikTok or by doing commercials or anything else. That remains. What you can do is say that booster cannot promise NIL to any recruit, and any recruit who accepts any deal for NIL $ before committing to a school is ineligible. It's the explicit inducement that has to go away. The implicit inducement "if you go to Alabama you will have a good chance to make NIL $" is fine. That's still there. Paying kids to attend a specific school is not.

 

[mussels]

Disagree. The NCAA is a voluntary organization. They can set limits on outside earnings in order to be a participant.

I don't think its that simple. If it were, then they didn't need to do NIL in the first place - just declare that the limit on outside earnings is zero.

Problem is that athletes were being held to a different standard regarding outside income than every other student on campus. Thought the courts call foul on that. If you set a limit on athletes outside income you still have the same issue.

 

[mussels]

Yes. They can and should solve this. The idea was to allow kids to profit off their NIL. So they can make money on Instagram, YouTube, TikTok or by doing commercials or anything else. That remains. What you can do is say that booster cannot promise NIL to any recruit, and any recruit who accepts any deal for NIL $ before committing to a school is ineligible. It's the explicit inducement that has to go away. The implicit inducement "if you go to Alabama you will have a good chance to make NIL $" is fine. That's still there. Paying kids to attend a specific school is not.

Agree with what you say, but it seems like it would be impossible to enforce so long as the athlete signs the letter of intent before the NIL agreement. (even though the terms of the agreement have been worked out prior to the commitment)

 

[auror]

Agree with what you say, but it seems like it would be impossible to enforce so long as the athlete signs the letter of intent before the NIL agreement. (even though the terms of the agreement have been worked out prior to the commitment)

Yeah, are you going to go through the phones of every transfer athlete and random businessman who doesn't work for the NCAA?

 

[huskymedic]

 

[mussels]

Yeah, are you going to go through the phones of every transfer athlete and random businessman who doesn't work for the NCAA?

Yep - and I would think that the lawyers and agents who work out the deals would be crafty enough to never explicitly talk or write about there being any quid pro would.

 

[CL82]

Yeah, are you going to go through the phones of every transfer athlete and random businessman who doesn't work for the NCAA?

yeah I think the whole you can never enforce something 100% is a red herring. You can make that argument for any law of rule or regulation that has ever existed and will ever exist. The notion that you won’t catch every last person so you shouldn’t even try to regulate doesn’t really make a whole lot of sense to me.

 

[auror]

yeah I think the whole you can never enforce something 100% is a red herring. You can make that argument for any law of rule or regulation that has ever existed and will ever exist. The notion that you won’t catch every last person so you shouldn’t even try to regulate doesn’t really make a whole lot of sense to me.

Most rules and regulations CAN be enforced; there are mechanisms available because the people cooperating in said rules are in your system. Boosters are not in the system. The players are sorta kinda in the system (they are not compensated directly by the system). The NCAA explicitly made the boosters and payment happen outside the system. That is why they can't be enforced.

 

[CL82]

Most rules and regulations CAN be enforced; there are mechanisms available because the people cooperating in said rules are in your system. Boosters are not in the system. The players are sorta kinda in the system (they are not compensated directly by the system). The NCAA explicitly made the boosters and payment happen outside the system. That is why they can't be enforced.

That’s why the sanction would need to continue to be, as it always has been, player eligibility. You don’t sanction the party that’s outside of your system, you sanction the party that’s inside your system.

 

[CL82]

“The moment they come to try to interfere with one of my clients’ deals — the next day is the moment they get hit with an antitrust lawsuit,” said attorney Mike Caspino, who represents several football recruits that have landed six- and seven-figure deals with school-specific booster collectives. “They’re saying there’s a whole class of people (boosters) who can’t participate in the market for athletes’ NIL rights. That’d be like saying red-haired people can’t buy meat. That’s antitrust.

No, that’s actually discrimination, and since red haired people aren’t a protected class it’s probably not unlawful discrimination.

 

[uconndogs]

NCAA to SEC "We've had enough. All your programs are abusing the intent of NIL. We're going to put the mechanisms in place to assure the intent of NIL is enforced."

SEC to BiG "Did you just get notified about NIL enforcement by the NCAA? Uh huh.....yup.....got it."

SEC to NCAA "Have a nice life.......we're out!"

 

[CL82]

I don't think its that simple. If it were, then they didn't need to do NIL in the first place - just declare that the limit on outside earnings is zero.

Problem is that athletes were being held to a different standard regarding outside income than every other student on campus. Thought the courts call foul on that. If you set a limit on athletes outside income you still have the same issue.

Not so much. I think you were thinking of the Alston case which said that schools couldn’t limit the amount of benefits paid to athletes. Justice Kavanaugh‘s concurring opinion, which was not the opinion of the court, went further, but again it’s not the law of the land.

 

[AZHuskiePop]

I would like to know if they have to file income tax on NIL money. I am assuming that scholarships are not taxable.

Scholarships normally are not as they are considered gifts, The Unversities have exemptions from the laws governing gifts a person doesn’t have . You are taxed on any amount in excess of the exemption $15,000 the last I looked.
Frankly if someone sued the University because an oAthlete is receiving benefits in excess of tuition room & Board that would test that special privilege.

 

[uconndogs]

Scholarships normally are not as they are considered gifts, The Unversities have exemptions from the laws governing gifts
Frankly if someone sued the University because an oAthlete is receiving benefits in excess of tuition room & Board that would test that special privilege.

NIL isn't through the universities (presumably) so I would have to believe that compensation is taxable.

 

[FfldCntyFan]

NIL isn't through the universities (presumably) so I would have to believe that compensation is taxable.

True but the IRS can take a different stance if they believe they can attribute the earnings to the scholarship.

I've dealt with the IRS on a few matters where what common sense would dictate that things are (or are not) intrinsically related but the IRS took a different stance.

 

[auror]

That’s why the sanction would need to continue to be, as it always has been, player eligibility. You don’t sanction the party that’s outside of your system, you sanction the party that’s inside your system.

But again, how do you enforce it? How do you even gather evidence? Previously, booster activity was caught by the schools themselves essentially self-policing (or the occasional random FBI sting). The schools for a long time felt a compulsion to voluntarily cooperate, because they themselves ARE the system (the NCAA is just the collection of schools). This started flipping as some schools decided winning was more important than the NCAA itself, which had lost all of its credibility and public goodwill had shifted towards athlete rights and in a twisted sense the dirty schools had the moral high ground on that issue.

But because amateurism was too important, they "designed" (aka hastily scrapped the previous guidelines they had written and just said basically do whatever you want) this NIL system so that the schools are outside of the deals and even more importantly the contact entirely. Boosters are working "with" the schools, but the schools are expressly not allowed to get into contact or negotiations. How are you going to catch anyone when your only entry into enforcement is prohibited from accessing the conversation?

 

[McLovin]

Yes. They can and should solve this. The idea was to allow kids to profit off their NIL. So they can make money on Instagram, YouTube, TikTok or by doing commercials or anything else. That remains. What you can do is say that booster cannot promise NIL to any recruit, and any recruit who accepts any deal for NIL $ before committing to a school is ineligible. It's the explicit inducement that has to go away. The implicit inducement "if you go to Alabama you will have a good chance to make NIL $" is fine. That's still there. Paying kids to attend a specific school is not.

I don’t see the difference there.

And if you do stop schools from offering NIL deals before the students sign, what will happen is the kids and their agents will start giving schools their demands to pick their place. Basically become a player driven free agency for top prospects and transfers.

“Hey coach, I really want to play QB for Bama, but if I do I’ll want a Porsche, beach house for my mom and $500K in NIL, or else I’ll transfer after my first year. Just wanted to let you know, in case you want to pull my offer and offer another QB.” 24 hours later, Bama hasn’t pulled the offer so the kid signs with Bama and magically he gets his NIL wish list demands.

Either way, you can’t stop the NIL money talks from happening before or after. The information is out there and pretty easy for players / programs to figure out the players NIL “worth” / ability to pay up…