Schools seeking stability in the ‘wild west’ of NIL
As big-time college athletic leaders gathered for annual meetings in Arizona this week, the flames of name, image and likeness burned across the country as the industry shook.
Under the guise of NIL activity, boosters are offering inducements to recruits — transfers and high school athletes. Athletes are openly leaving one program for another in search of NIL money. Administrators are feeling pressure and in some cases paying the price for not keeping pace.
The NCAA could launch investigations while industry heads are pleading with federal lawmakers for guidance.
Ten months into a new era that allows college athletes to profit off their likeness or earn money through sponsorships and other means, the landscape appears just as many expected — chaotic. Surprised?
Don’t be.
“We knew that there were very little guardrails,” said Florida attorney Peter Schoenthal, head of the NIL advisory and management company Athliance. “We knew that enforcement would take time to catch up with the actors. When you have a new space, the bad actors always come out looking for the loopholes early on. … So we always knew it was going to be the wild west right away.”
Name, image and likeness activity began on July 1, 2021 when a handful of state laws went live. There were no specific NCAA guidelines tied to the new space, nor was there a federal law.
Instead, each state had its own set of laws that left individual schools scrambling for guidance. Many schools hired outside firms to manage NIL activity and work with compliance offices to affirm that deals fell within existing NCAA rules.
Opendorse, the company used by UConn, works with about 120 schools at all levels. NIL deals are inputted through Opendorse software by athletes and the activity is immediately shared with the school’s NCAA compliance office.
But it’s not always that simple when outside figures are involved. There are so-called “collectives” formed to help athletes find opportunity or — perhaps — create direct means to earn money.
In theory, a collective can operate within NCAA rules. That means no boosters or donors making direct payments to athletes.
Opendorse manages 12 collectives. The pitch, of course, is that the company is a one-stop shopping space, presenting athletes with potential deals all within the NCAA structure of rules that existed before NIL.
But there’s a parallel world of activity that’s drawing the interest of NCAA investigators.
The most high-profile is
John Ruiz, a South Florida billionaire and University of Miami supporter who gained attention for paying athletes to promote two of his companies. He also announced on Twitter that Nijel Pack, a basketball transfer from Kansas State, had a twoyear, $800,000 deal to promote his company.
Collectives fueled by donors and boosters have emerged all over the country, prompting the NCAA and college administrators to seek help.
“If you know anything about boosters, they are competitive and they are in the game of one-upsmanship,” Schoenthal said. “This space is not about name, image or likeness. This space is not about profiting off of your marketability and who you are and the value you bring. This space has become a way for boosters and others to pay athletes and then work backwards to try to justify the amount that they’re spending. It is full of pay for play. It is full of inducement. And neither of those are actual NIL and yet we keep calling it NIL.”
Boosters, of course, have always operated in the shadows of college sports. The pay-for-play element of big-time college football, for instance, is not new.
As it turned out, it took less than a year before boosters identified NIL as a means of emerging from the shadow.
“We found out pretty quickly the alumni donor fan bases would be involved and that they would organize to deliver deals to athletes,” said Sam Weber, Opendorse senior director of brand marketing. “We didn’t realize the scale at which it would happen and really the table stakes that it’s created. But even with the enhanced regulations that the NCAA and the Board of Governors, that they will likely bring down … even with that, NIL collectors are not going away and they’re not going to become any less paramount to a school’s ability to compete in this era. It will just be done in a way that it’s closer to the letter of the law as NIL was intended, rather than being a free for all of recruiting inducements.”
Despite the NCAA’s lack of guidance as NIL activity began, schools feared infractions. Among Opendorse pitches was an ability to keep athletes eligible and work with compliance offices, both in education and managing NIL deals.
The NCAA’s Division I Council will meet later this month, when findings from a review of NIL activity will be presented to the Division I Board of Directors. Athletic directors and coaches have asked the NCAA for more well-defined rules that address NIL activity.
But it’s unclear what the NCAA will do. The beleaguered organization has been unable to manage the changing landscape and commissioners from the SEC and Pac-12 met with lawmakers in Washington Thursday in hopes of coaxing federal legislation.
“As we have observed activity emerge that is very different from original ideas around Name, Image and Likeness, it is important we continue to pursue a national NIL structure to support
the thousands of opportunities made available for young people through intercollegiate athletics programs across the country,” SEC commissioner Greg Sankey said in a statement.
The issue, though, may be more about how a booster is defined in this new world. The rules involving boosters and pay-for-play haven’t changed. But how a booster operates in the NIL world has.
“It’s only natural in a new industry, those who can get ahead or take advantage, will,” Weber said. “And I think the lack of clarity around the regulations, it opened the door for it and it was exploited. But I think it is maybe less a lack of restrictions or regulations, and more a lack of an explanation of the restrictions that already exist. I mean, pre-July 1, a booster could not talk to or meet with a recruit or a student-athlete in the transfer portal. And post-July 1, — still, per the NCAA rules that currently exist — a booster still cannot talk to meet with a recruit or a student-athlete in the transfer portal.
“But for some reason the lack of clarity around that got lost over the last 10 months.”
Opendorse is moving deeper into the world of creating opportunities for athletes. The company is partnering with Learfield, the media company that works with schools all over the country — including UConn.
That partnership will be one avenue for income opportunities for athletes at a school like UConn. While collectives have been mushrooming
across the country, UConn is at the conversation stage.
“There are people who want to support UConn and our student-athletes and we’re trying to work with them to support what their interests are and find the best way forward,” athletic director David Benedict said. “Obviously there’s a lot of different ways you can structure collectives. There’s for profits, there’s non-profits. We’re trying to do the best we can to do something that is going to last and not be something we just try to do quickly and doesn’t wind up working out for either side.”
One UConn alum to watch is Marc D’Amelio, the patriarch of a family of social media influencers who has been vocal on Twitter.
“NIL should not be pay for play,” he tweeted last week. “It should be a vehicle for student athletes to use their notoriety and social media platform to secure brand and business deals for a check. The school should have little involvement in this. The school should not act as an agent.”
Later, he tweeted: “Looking into starting a UConn X D’Amelio NIL Collective to connect companies and UConn Student Athletes. I have been doing this for over 2 years for social media influencers so I am sure I can help. I would do it for free.”
UConn professor David Noble, director of the Werth Institute, told Hearst Connecticut Media that D’Amelio could be helpful to the school in guiding athletes to NIL activity — and to help
put them on a career path.
“Marc D’Amelio is tweeting about a plan to support the robust development of social media for studentathletes,” Noble said. “We’re looking at media careers, the pathway to media careers . ... This program first in class, first deployed where you have an academic program developed to support social media influencers and their entrepreneurial dreams. That’s how you get paid, eventually. We see it starting with, you pay me to promote your product, then I start promoting my own products, and eventually I’m a partner in companies. In talking to Marc D’Amelio on this, that’s how they built, that’s what their family is — and it’s valued in the hundreds of millions of dollars.”
Benedict said UConn’s plan to create an infrastructure for NIL activity fits the spirit of what the new college sports landscape should look like.
There is pressure to keep pace with schools across the country but those immersed in the NIL world believe the current uncertainty will subside.
“Once there’s enforcement and there’s the fear of punishment, and the fear of hurting your own school, I think we’ll see a little bit more normalcy in this space,” Schoenthal said. “I always said this space was always going to take 36 or 48 months to figure itself out and we’re still within the first year. So people have to be patient. Things will settle.”