Revenue Sharing is Officially Here

[NorthKCHawk]

For those of you focusing on Summer fun rather than ESPN, the House settlement was given final approval. Schools will now be paying kids directly, and at least in theory, the classic collective model that most major schools have developed in the last two years will go away. All NIL deals over $600 must be reported and scrutinized to make certain it is not pay for play, but rather, a legitimate payment for the use of a players Name Image and Likeness. Anyone think the collectives and boosters are just going to dissolve into the sunset now that kids are being paid by the schools? No way.

Apparently, the NCAA is not going to be the enforcer of these rules, but the newly formed Commission and the conferences are going to take the lead in enforcing what tiny shred of amateurism is left in college athletics. There are still way too many unanswered questions in this whole affair.

So is a $599 handshake totally legal and does not have to be reported?
Who sets the standard for what is a legitimate exchange of NIL for cash? I mean, if I am willing to pay the left guard at Iowa $5,000 for a signed poster of himself, who gets to say whether or not that is simple pay for play?
What roles do agents get to play now that dark money is being squeezed out of the game a little bit?
Are these kids employees or independent contractors? Do they sign contracts with rules in place? Does every school use the same contract form???
How is this setting of a revenue sharing with a specified cap on how much the players get not itself an antitrust violation?

 

[HuckFinn]

For those of you focusing on Summer fun rather than ESPN, the House settlement was given final approval. Schools will now be paying kids directly, and at least in theory, the classic collective model that most major schools have developed in the last two years will go away. All NIL deals over $600 must be reported and scrutinized to make certain it is not pay for play, but rather, a legitimate payment for the use of a players Name Image and Likeness. Anyone think the collectives and boosters are just going to dissolve into the sunset now that kids are being paid by the schools? No way.

Apparently, the NCAA is not going to be the enforcer of these rules, but the newly formed Commission and the conferences are going to take the lead in enforcing what tiny shred of amateurism is left in college athletics. There are still way too many unanswered questions in this whole affair.

So is a $599 handshake totally legal and does not have to be reported?
Who sets the standard for what is a legitimate exchange of NIL for cash? I mean, if I am willing to pay the left guard at Iowa $5,000 for a signed poster of himself, who gets to say whether or not that is simple pay for play?
What roles do agents get to play now that dark money is being squeezed out of the game a little bit?
Are these kids employees or independent contractors? Do they sign contracts with rules in place? Does every school use the same contract form???
How is this setting of a revenue sharing with a specified cap on how much the players get not itself an antitrust violation?

I am very confident that sophisticated predators will successfully bypass any “ rules” put forth to place controls on out of place player bribes. Nothing new under the sun. I am pleased that the University of Iowa will be straight up paying players within their own guidelines. As for the rest of the story, get out the popcorn and some cold beer.

 

[NorthKCHawk]

I am very confident that sophisticated predators will successfully bypass any “ rules” put forth to place controls on out of place player bribes. Nothing new under the sun. I am pleased that the University of Iowa will be straight up paying players within their own guidelines. As for the rest of the story, get out the popcorn and some cold beer.

I was thinking about this, and how NIL hasn't infiltrated professional sports all that much. I mean, NFL teams have rich fans that want to win. What would stop Phil Knight from offering Patrick Mahommes a 250 million dollar Nike Deal, but only if he moved to Seattle and played for the Seahawks? Nothing. But, it hasn't really happened to my knowledge.

I wonder if injecting millions into direct payment to players, with clear contracts establishing what is and is not allowed on the side, might finally bring some equity to major college athletics. I have to believe that schools will do more to restrict free movement with no consequences, which might finally draw the dark money out of the game.

 

[NorthKCHawk]

Just read that a bipartisan group of House members has introduced a bill that would largely codify the House settlement. It would give authority to regulate things like transfers without fear of antitrust violations, and it would preempt various state law efforts to avoid the restrictions of the House Settlement. It would set a national standard. This would be a huge step in bringing some rules and order to this process.

 

[NCHawker]

I'm wondering if some day I'll wake up and games or a season is cancelled - no college football will be played because of a mass of unanticipated economic, and legal issues have combined to create gridlock. ON the surface it wont make any sense but when we consider the intracacies... they won't play.

I hope this does not happen.

 

[Fryowa]

Anyone think the collectives and boosters are just going to dissolve into the sunset now that kids are being paid by the schools? No way.

Apparently, the NCAA is not going to be the enforcer of these rules, but the newly formed Commission and the conferences are going to take the lead in enforcing what tiny shred of amateurism is left in college athletics. There are still way too many unanswered questions in this whole affair.

The genie is long out of the bottle. The commission has no legal leg to stand on. I would glady bet my house that as soon as whatever governing board they put in place steps in to issue a violation of rules pertaining to college athletes making money they'll get sued into oblivion and the highest courts in the land have already spoken that the NCAA or it's minion governing bodies can't limit what college kids make from their services.

One of my coworkers thinks this is going to bring parity but I call an emphatic bullshit on that. As soon as any "parity" is reached there will be a vacuum, and that vacuum will be filled by the same collectives and boosters that are causing the disparity right now.

No one in his or her right mind would think for a second that OSU is going to let a hypothetical Iowa with say $20M allocated for football salaries get by with it and not come with additional millions as a counter punch. If they had a $20M roster last year they'll just have a $40M roster next year and so on and so on.

 

[Fryowa]

Just read that a bipartisan group of House members has introduced a bill that would largely codify the House settlement. It would give authority to regulate things like transfers without fear of antitrust violations, and it would preempt various state law efforts to avoid the restrictions of the House Settlement. It would set a national standard. This would be a huge step in bringing some rules and order to this process.

Regulating transfers, etc. would be huge and doable, and I think it should happen. I do not however think that essentially creating salary caps will happen. The players have no representation or union in this fight and they have no incentive to have one now. All this is going to do is increase the amount of money they're being paid

 

[NorthKCHawk]

Regulating transfers, etc. would be huge and doable, and I think it should happen. I do not however think that essentially creating salary caps will happen. The players have no representation or union in this fight and they have no incentive to have one now. All this is going to do is increase the amount of money they're being paid

Agreed on transfers. Requiring a kid to sit for a year absent a coaching change or serious personal situation could really get the boosters out of the mix. Most rich dudes don't want to wait 2 years to see their 500k in action.

Salary cap is a bit murkier. Your point about collective bargaining is a good one. However, they kind of did have collective bargaining in the form of a Court-supervised lawsuit and settlement, where the prospective athletes were represented by lawyers and class reps. I talked to a buddy who thinks any challenge to the settlement terms on anti-trust or NLRB grounds would be an uphill climb. I mean the House settlement was the resolution of the antitrust lawsuit that was brought, and its been blessed by the federal judiciary after a long fought compromise that is pretty historic. That said, I do not disagree that someone will challenge the cap and any rules put in place at some point. This is all so knew and unsettled, it won't be hard to find lawyers who want to test the limits.

Congress could make this a moot point through legislation. There is momentum that way it seems.

 

[NorthKCHawk]

Regulating transfers, etc. would be huge and doable, and I think it should happen. I do not however think that essentially creating salary caps will happen. The players have no representation or union in this fight and they have no incentive to have one now. All this is going to do is increase the amount of money they're being paid

And to be clear, the House settlement in fact has a functional salary cap starting this season with escalators for future years. Each school has a cap on the maximum they can pay their players. They are given discretion on which sports to allocate the money to and then how much any particular player gets, but there is a cap. Congress can absolutely bless that through legislation and there is nothing the athletes could do to overcome that if it became law.

If Congress does not bless it, then I think any athlete would have standing to sue under Title IX, antitrust, and NLRB. Whether they could overcome the efficacy of the judicially blessed class settlement is an open question.

 

[Fryowa]

Agreed on transfers. Requiring a kid to sit for a year absent a coaching change or serious personal situation could really get the boosters out of the mix. Most rich dudes don't want to wait 2 years to see their 500k in action.

Salary cap is a bit murkier. Your point about collective bargaining is a good one. However, they kind of did have collective bargaining in the form of a Court-supervised lawsuit and settlement, where the prospective athletes were represented by lawyers and class reps. I talked to a buddy who thinks any challenge to the settlement terms on anti-trust or NLRB grounds would be an uphill climb. I mean the House settlement was the resolution of the antitrust lawsuit that was brought, and its been blessed by the federal judiciary after a long fought compromise that is pretty historic. That said, I do not disagree that someone will challenge the cap and any rules put in place at some point. This is all so knew and unsettled, it won't be hard to find lawyers who want to test the limits.

Congress could make this a moot point through legislation. There is momentum that way it seems.

I think not having the players union/association is going to be the thing that makes it impossible. Without any central CB unit (and more importantly no incentive for one), it's a one-sided deal every man or woman for his or herself. And that's where the courts have said, "No, this is de facto employment and you [NCAA/institutions] can't prevent someone from making money off of it or limit how much they can make." Unless there is a collective agreement, then things change.

The problem with the college sports landscape when it comes to organizing is the even more short-term length of participation than in pro sports. Yeah, there are guys who stick around 4 years, but let's face it...statistically most all football and basketball players aren't stars or even starters, they're bench-riders who will only be around a program a couple years before seeing that they aren't going to cut it and they bounce. Look at any roster in any D-1 sport and you'll see a bazillion frosh/sophs, and about 25% of that number of juniors/seniors. How do you even begin having a players union like that? By the time they get settled in (even if they're there 3 years) it's time to move on to the next phase of life. Someone has to be the leadership as well, if you had 25 athletes in a college football player's association as representatives, how do you even begin to get them involved and doing worthwhile work on behalf of the group when they'll only be there a couple years at best along with school, year-round football season, and all the other things that go on.

Hire outside people to be the reps? What's the incentive to best represent the union at that point? Money? Altruism? (sarcasm there).

 

[NorthKCHawk]

I think not having the players union/association is going to be the thing that makes it impossible. Without any central CB unit (and more importantly no incentive for one), it's a one-sided deal every man or woman for his or herself. And that's where the courts have said, "No, this is de facto employment and you [NCAA/institutions] can't prevent someone from making money off of it or limit how much they can make." Unless there is a collective agreement, then things change.

The problem with the college sports landscape when it comes to organizing is the even more short-term length of participation than in pro sports. Yeah, there are guys who stick around 4 years, but let's face it...statistically most all football and basketball players aren't stars or even starters, they're bench-riders who will only be around a program a couple years before seeing that they aren't going to cut it and they bounce. Look at any roster in any D-1 sport and you'll see a bazillion frosh/sophs, and about 25% of that number of juniors/seniors. How do you even begin having a players union like that? By the time they get settled in (even if they're there 3 years) it's time to move on to the next phase of life. Someone has to be the leadership as well, if you had 25 athletes in a college football player's association as representatives, how do you even begin to get them involved and doing worthwhile work on behalf of the group when they'll only be there a couple years at best along with school, year-round football season, and all the other things that go on.

Hire outside people to be the reps? What's the incentive to best represent the union at that point? Money? Altruism? (sarcasm there).

All good points. Again, Congress could step in and say look, this a hybrid situation. Yes, these are people who can earn a lot of money and they are sort of employees and sort of not. They are also kids who are students and only supposed to be there for a short period of time. Given all that, we are going to exempt college sports from antitrust laws and collective bargaining requirements. Congress could dictate that a certain percentage of revenue must be paid to the athletes. Essentially, they could codify the terms of the House Settlement.

Absent that, there could still be collective bargaining. The NLRB can set up a union and the union can be staffed by professional labor attorneys whose fiduciary duty is to negotiate terms on behalf of the student athletes. Athletes could be elected to serve on the union's board for 1-year.

But, your point that this is all weird and uncharted territory is accurate. Congress could solve the problem, but I would not bet my best socks that they will be functional enough to do so.