Dude's got a great name for making NIL bank if his agent can connect him with the right types of businesses.
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NIL: How Does it Work? (Plus transfer rules)
- Thread starter Uncle Ken
- Start date
Can someone answer why Nike, Adidas, Reebok, UA, etc... haven't become big players in NIL on a national scale? Or have they and I'm not aware?
It seems that these companies who are so eager to get pro athletes committed early would be chasing all the college players likely to go pro
What am I missing?
It seems that these companies who are so eager to get pro athletes committed early would be chasing all the college players likely to go pro
What am I missing?
There needs to be regulation. People might think that this is good for the student athlete, but make no mistake - what we have learned from pro sports in this country, when there is this much money being thrown around, and no real control in what's going on, the money men are always exploiting the athlete. It's never the other way around, even when people think it might be.
Um, Oregon?
Of course Nike and oregon.
I specified "on the national scale" specifically because of that relationship.
I don't know about everyone else, but I wouldn't be surprised if there wasn't a directive at Nike that they weren't to do any deals with non-Oregon athletes.
We'll see if that changes when the inevitable happens and Uncle Phil departs to the great Foot Locker in the sky.
All are real companies that must behave responsibly, and accordingly spend their advertising dollars in a responsible manner. They all answer to a board of directors.
There's very few college football athletes that will have national appeal to the level to attract Nike dollars, enough to run a national promo campaign. Nike is not going to mess around with some guys in Lincoln, Nebraska who have some local appeal. Thats my best guess.
Right
And, I would think they'd be all over the 5* guys who are projected to be professional stars. Maybe they are and I'm just not hip.
Are you implying that you're expecting them to lock up college guys on the cheap before they explode into big NFL stars in the price goes up?
Maybe not on the cheap, but yes. Thinking Nike would want to get a potential superstar under contract before UA does. And that NIL seems a good way to do so.
I think it's probably a bit speculative with questionable ROI. At the end of the day. None of these guys are Michael Jordan.
Big Jim
WTF?
Google is a nice tool.
Nike's NIL Deals: Full List of Nike High School and College Athletes
Nike has been signing both college and high school athletes to NIL deals, and we're tracking them all. Bronny James, Caitlin Clark, Juju Watkins and more.
businessofcollegesports.com
Nike, et al know that 99% of the CFB players ain't worth a dime in nil. If the NCAA had any balls everyone of these nil deals would be considered pay for play. The only legit ones are where you see a dude in a local ad or for the whales a national TV spot. I don't see how these collectives can maintain charity status with the IRS when all they do is funnel money straight to players.
I struggle with the charity aspect too.
I'm still not sure I understand why, e.g. Caleb Williams doesn't have an NIL deal with Nike, et.al.
cowe6453
Well-Known Member
To piggyback on others' thoughts -- also confused on how this all works. Seems to me money is being pooled through collectives and then distributed to players (somehow)... sure you can say John Player did a commerical at Bubba's car wash, but does that translate to $1M for right to use NIL (do they even attempt to value or just assign an arbitrary value that serves their purpose)?? Outside the obvious situations where you can track the money -- Shedeur, Caleb (I see them on TV), what about the non-unicorn players? And how is that communicated to the players? "Hey we can offer you $1M, we'll figure out the details later (we'll make something up / find something to tie the money to)." Really interesting stuff and seems increasingly out of control / raises a lot of questions.
If I were the NCAA Id consider leaving NIL unregulated, letting this thing go wild and let the Supreme Court regulate it since they authorized it. In a way, you can see how letting this thing loose will likely eventually hurt a lot more programs then the few it helps. And it probably starts to change the publics mind about Pay to Play. Which leads to the start of consensus on regulating it. Right now the NCAA has been rendered toothless. Maybe they disintegrate into several regional AAs. Maybe Congress acts. Im not really quite sure.
A couple random notes:
1. I can "give" anyone anything that they'll accept. Including an unlimited amount of money.
"Non-profit" /= "donations are tax deductible." There are a lot of "non-profits" out there; for many of them, donations are *not* tax deductible.
Country/yacht clubs, industry/trade associations, etc are all "non-profits;" donations to them are *not* tax-deductible. I suspect that many of these collectives are chartered under those types of provisions, and anyone who tries to deduct donations to them will get bitch-slapped by the IRS if they get audited.
2. I can also pay someone an unlimited amount of money to do something easy that takes minimal time. I don't have to pay a market rate for their time or effort.
If I'm a business paying them for a business service, and I pay them absurdly above a market rate, that expense may be disallowed by an auditor when it comes time to close my books for the year, and I may have to include that in my profit which will either increase my taxes or, if my business is a flow-through entity, increase the tax burden on the owners.
3. Per the US Supreme Court the NCAA has zero legal authority to alter either of the two points above.
1. I can "give" anyone anything that they'll accept. Including an unlimited amount of money.
"Non-profit" /= "donations are tax deductible." There are a lot of "non-profits" out there; for many of them, donations are *not* tax deductible.
Country/yacht clubs, industry/trade associations, etc are all "non-profits;" donations to them are *not* tax-deductible. I suspect that many of these collectives are chartered under those types of provisions, and anyone who tries to deduct donations to them will get bitch-slapped by the IRS if they get audited.
2. I can also pay someone an unlimited amount of money to do something easy that takes minimal time. I don't have to pay a market rate for their time or effort.
If I'm a business paying them for a business service, and I pay them absurdly above a market rate, that expense may be disallowed by an auditor when it comes time to close my books for the year, and I may have to include that in my profit which will either increase my taxes or, if my business is a flow-through entity, increase the tax burden on the owners.
3. Per the US Supreme Court the NCAA has zero legal authority to alter either of the two points above.
ACK on #1, and, some NIL collectives are 501(c)(3)'s -- those are the ones that have me scratching my head over "how is this allowed"?
Link
Fair.
I wouldn't like to be the tax lawyer trying to defend that particular status if/when it gets audited.
Or maybe I would - probably pays well.
66BUFF
FTW
ANSWER
Is Texas One Fund affiliated with the University of Texas?Texas One Fund is a Proud Partner/Sponsor of Texas Athletics.
CLOSE
Are donations to Texas One Fund tax-deductible?The Texas One Fund has been granted tax-exempt status as an organization under the Internal Revenue Code Section 501(c)(3) and continues to operate under its IRS approval. However, we encourage donors to consult a tax professional regarding the tax deductibility of donations to Texas One Fund. IRS approval is linked below. Please note that Texas One Fund is the successor entity of Horns with Heart, Inc. in conjunction with the merger of other nonprofits. Any nonprofit contributions may also be made to Horns with Heart, Inc. which can be received and credited to Texas One Fund, Inc.
66BUFF
FTW
Texas A&M shuts down controversial 12th Man+ NIL Fund after IRS threatens foundation's nonprofit status
The 12th Man+ Fund was the first internal organization created for NIL fundraising
By Shehan Jeyarajah
Aug 9, 2023 at 5:47 pm ET•2 mi
Texas A&M has shut down the controversial 12 Man+ Fund after reviewing directives from the IRS. The fund, which attempted to bring name, image and likeness (NIL) collective efforts in-house, put the 501(c)(3) status of the 12th Man Foundation at risk.
The decision to shut down the NIL fund came after the IRS released a memo on June 9, which told NIL collectives their function doesn't fit within the confines of tax-exempt status. The 12th Man+ Fund attempted to reward donors with athletic department points and tax benefits in exchange for donations to provide NIL compensation to athletes.
"Following consultation with external advisors, the 12th Man Foundation is altering its approach to NIL, which includes discontinuing the 12th Man+ Fund. This decision was made to ensure the 12th Man Foundation meets its high standards for compliance and to protect the organization's mission," the 12th Man Foundation said in a release.
Texas A&M plans to reach out to 12th Man+ Fund donors and allow them to redirect their donations to approved fundraising organizations. While the 12th Man Foundation is eliminating its collective-based NIL arm, the organization says it remains committed to supporting NIL for players through marketing efforts rather than direct payment.
"As part of its altered approach, the organization plans to support NIL opportunities for Aggie student-athletes by expanding its marketing outreach using unrestricted annual fund contributions," the statement said.
Major swing
The 12th Man+ Fund made major ripples in February as the first in-house NIL fundraising effort. Almost immediately, the NCAA tried to fight back, issuing a memo essentially telling Texas A&M that the fund explicitly violated NCAA rules and regulations.While Texas A&M dared the NCAA to act, the IRS is another story. The Aggies couldn't ignore a potential threat to the nonprofit status of their primary fundraising arm. Tax benefits remain among the most significant drivers of athletic department donations, especially for big-money donors.
After Texas A&M began its efforts, multiple other schools began exploring the possibility of creating similar programs. The 12th Man+ Fund shutting down is a warning sign to other institutions that the tax implications may not be worth the trouble.
This is what should happen to find some balance and regulationTexas A&M shuts down controversial 12th Man+ NIL Fund after IRS threatens foundation's nonprofit status
The 12th Man+ Fund was the first internal organization created for NIL fundraising
By Shehan Jeyarajah
Aug 9, 2023 at 5:47 pm ET•2 mi
Texas A&M has shut down the controversial 12 Man+ Fund after reviewing directives from the IRS. The fund, which attempted to bring name, image and likeness (NIL) collective efforts in-house, put the 501(c)(3) status of the 12th Man Foundation at risk.
The decision to shut down the NIL fund came after the IRS released a memo on June 9, which told NIL collectives their function doesn't fit within the confines of tax-exempt status. The 12th Man+ Fund attempted to reward donors with athletic department points and tax benefits in exchange for donations to provide NIL compensation to athletes.
"Following consultation with external advisors, the 12th Man Foundation is altering its approach to NIL, which includes discontinuing the 12th Man+ Fund. This decision was made to ensure the 12th Man Foundation meets its high standards for compliance and to protect the organization's mission," the 12th Man Foundation said in a release.
Texas A&M plans to reach out to 12th Man+ Fund donors and allow them to redirect their donations to approved fundraising organizations. While the 12th Man Foundation is eliminating its collective-based NIL arm, the organization says it remains committed to supporting NIL for players through marketing efforts rather than direct payment.
"As part of its altered approach, the organization plans to support NIL opportunities for Aggie student-athletes by expanding its marketing outreach using unrestricted annual fund contributions," the statement said.
Major swing
The 12th Man+ Fund made major ripples in February as the first in-house NIL fundraising effort. Almost immediately, the NCAA tried to fight back, issuing a memo essentially telling Texas A&M that the fund explicitly violated NCAA rules and regulations.
While Texas A&M dared the NCAA to act, the IRS is another story. The Aggies couldn't ignore a potential threat to the nonprofit status of their primary fundraising arm. Tax benefits remain among the most significant drivers of athletic department donations, especially for big-money donors.
After Texas A&M began its efforts, multiple other schools began exploring the possibility of creating similar programs. The 12th Man+ Fund shutting down is a warning sign to other institutions that the tax implications may not be worth the trouble.
NIL is "Pay to Play" disguised as Non-Profit collectives
Take money from donors, i.e $100,000
Give money to a charity = $20,000
Give money to a student-athlete to attend an event for said charity because they are cool and have NIL value locally = $80,000
Somehow this all seems cool, unlike Caleb Williams actually helping sell Wendy's or Dr Pepper, or SS2$ selling KFC or Google
I think the best positive NIL I have seen on a local level are the local companies using college athletes in advertising. There is a local restaurant that always had Wichita State basketball players in their commercials immediately after their eligibility ran out. Now they are in the commercials while they are playing. They also use players on some of the other teams as well. Long McArthur Ford uses Avery Johnson in commercials and ads for them. I loved seeing the pancake houses sponsoring and using OL at other schools in ads, then there was that one in DL that did ads for a landscape equipment dealer.
The NCAA should allow the schools to be highly regulated "agents" for the players to connect them to local/regional/national businesses that say want to pay $XXX to feature in an ad or some other event. Make sure the proper paperwork is filed, make sure the income is properly reported, etc. The IRS needs to look into the legality of collectives or establish firm guidelines.
The NCAA should allow the schools to be highly regulated "agents" for the players to connect them to local/regional/national businesses that say want to pay $XXX to feature in an ad or some other event. Make sure the proper paperwork is filed, make sure the income is properly reported, etc. The IRS needs to look into the legality of collectives or establish firm guidelines.
You wouldn't let teams buy players off another roster, huh. How do you feel about a coach under contract being bought from that program?
The NCAA probably isnt going to regulate NIL since the SCOTUS legalized it 9-0 unanimous decision.
The IRS will crack down who is and isnt able to meet 501c3 status. Boosters will not care.
So, the schools with the richest alums AND in the most football driven regions will likely end up buying nearly all the best players. NU is not going to be one of them.
At some point these NIL collectives will begin to eat into charitable giving to the individual schools foundations. And that might eventually cause some internal problems as NIL takes money away from Foundations without actually winning.
And does this Independent NIL system also lead to internal conference squabbling?
Since NIL collectives are independent of the schools, schools are powerless to stop them. Michigans NIL could, for example, have their boosters get together and target some other schools five star QB as a transfer just to eliminate the competition against UM.
Let say, tOSU and UMs NILs keep buying Winsconsin and Purdues best athletes? Will there be an internal revolt by the schools that dont have the NIL to compete?
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Yep. Legitimate NIL can discriminate. Pay for play from collectives can't.
Tells me that the schools need to be hands off with NIL support or run the risk of providing extra benefits to male athletes.
This consideration is what I always thought was going to force the top of D1 football to break away from the university AD structure. The money and the number of athletes for football almost equates to having football be the only men's sport a university sponsors if it wants to be in full Title IX balance.
That's the upshot of this: football separates. And then we deal with MBB being the only sport that might be profitable with almost all AD funding coming through its distribution from its football out-license, a modest conference media that's mostly about MBB, student fees, donations and maybe some state or general fund support.