NIL - how does this help us?

[AUcane]

Can someone explain to me how NIL now seems to be helping us in recruiting? Is that the long pole in the tent that explains our recruiting the past few months?

 

[IndayArtHauz]

College athletes could make millions in new era of NIL

Podcast Episode · The College Football Daily · 07/23/2020 · 32m

podcasts.apple.com

Fairly good examples and discussion herein. Doesn’t mention Miami, but talks about USC and others.

 

[Zombie-Cane]

Brand yourself in a city like Miami?!?! Could be huge!

 

[Atom Atlas]

Can someone explain to me how NIL now seems to be helping us in recruiting? Is that the long pole in the tent that explains our recruiting the past few months?

How it helps us is the Florida Gov. signed this into play starting in 2021 which is two years before any team outside of the state of Florida... Which means college players within the state of Florida can get paid legally for their name , image and likeness being used in various capacities...

 

[TheOriginalCane]

Can someone explain to me how NIL now seems to be helping us in recruiting? Is that the long pole in the tent that explains our recruiting the past few months?

Can someone explain to me how NIL now seems to be helping us in recruiting? Is that the long pole in the tent that explains our recruiting the past few months?

Just a few opinions, based on logic, business, and the role of the NCAA.

The NCAA rules will require prior approval of all deals, and they will use fair market valuation. The universities can't have a role setting things up.

First year for which this will be approved will be 2021-2022. I'd be willing to bet that the first few deals approved will be "traditional" deals, kids getting compensated for autograph signings, maybe merch sales (jerseys with their name-number), etc. The reason these deals will be approved first is there is already an idea of what these kinds of things are worth.

There will also be deals that are now "OK" because they should have been OK before (unrelated to the sport), such as the UCF kicker making money based on his internet presence, or Chad Thomas making money for producing songs for musical artists.

I'd expect the next line that would be tested would involve related products. Could a college kid endorse Nike or adidas? How would that work within the school's apparel-shoe deals? There will probably be deals for things that could be sold that are related to the sports world, like t-shirts.

Next up would be the bigger ticket items, that need to be tested out, with NCAA scrutiny on the market value, such as "doing an ad endorsing a car dealership". Once the NCAA starts to get some baseline data on these deals, you'll see more of them.

Overall, it's not going to be "everything open for business on Day 1", and there are probably going to be some deals that get approved one day, and then get denied 6 months later, as the NCAA tries to figure this whole thing out.

A couple of potential pitfalls for the players - first, I think a lot of scumbags are going to start approaching them, and some of these kids are only 18 and are going to have to REALLY be careful about taking these deals to the NCAA before committing. Second, these kids are going to have to start reporting this income on tax returns and, again, they are only 18 and may never have done this before. I certainly hope that the NCAA will allow these kids to MAYBE have a resource at each school that can review and advise them on income tax implications.

Just my 2 cents.

 

[RVACane]

Just a few opinions, based on logic, business, and the role of the NCAA.

The NCAA rules will require prior approval of all deals, and they will use fair market valuation. The universities can't have a role setting things up.

First year for which this will be approved will be 2021-2022. I'd be willing to bet that the first few deals approved will be "traditional" deals, kids getting compensated for autograph signings, maybe merch sales (jerseys with their name-number), etc. The reason these deals will be approved first is there is already an idea of what these kinds of things are worth.

There will also be deals that are now "OK" because they should have been OK before (unrelated to the sport), such as the UCF kicker making money based on his internet presence, or Chad Thomas making money for producing songs for musical artists.

I'd expect the next line that would be tested would involve related products. Could a college kid endorse Nike or adidas? How would that work within the school's apparel-shoe deals? There will probably be deals for things that could be sold that are related to the sports world, like t-shirts.

Next up would be the bigger ticket items, that need to be tested out, with NCAA scrutiny on the market value, such as "doing an ad endorsing a car dealership". Once the NCAA starts to get some baseline data on these deals, you'll see more of them.

Overall, it's not going to be "everything open for business on Day 1", and there are probably going to be some deals that get approved one day, and then get denied 6 months later, as the NCAA tries to figure this whole thing out.

A couple of potential pitfalls for the players - first, I think a lot of scumbags are going to start approaching them, and some of these kids are only 18 and are going to have to REALLY be careful about taking these deals to the NCAA before committing. Second, these kids are going to have to start reporting this income on tax returns and, again, they are only 18 and may never have done this before. I certainly hope that the NCAA will allow these kids to MAYBE have a resource at each school that can review and advise them on income tax implications.

Just my 2 cents.

Any possibility of the states taking legal action against the NCAA if they deny deals, especially if the states have legislated it into State Codes?

 

[Atom Atlas]

Any possibility of the states taking legal action against the NCAA if they deny deals, especially if the states have legislated it into State Codes?

This absolutely will happen... Loopholes are gonna loophole and some lawyer somewhere will looks for ways to exploit it...

 

[TheOriginalCane]

Any possibility of the states taking legal action against the NCAA if they deny deals, especially if the states have legislated it into State Codes?

I don't think so. States have authorized the GENERAL concept of making money off of NIL. But the devil is always in the details. The IRS (Treasury) Regulations are about 5 or 6 times as thick as the actual Internal Revenue Code. States have AUTHORIZED student-athletes to make money, but they have not set up detailed guidance and rules.

The NCAA's concern is on amateurism and extra benefits (and benefits that are just sham payments for ATHLETIC PERFORMANCE, as opposed to, say, a paid spokesman for a legit business).

If anyone would sue the NCAA, it would be the players themselves who have been denied an opportunity to earn money. The states have no standing, no justiciable interest. The state doesn't get the monetary benefit of the "approved" or "denied" deals.

And, yeah, let's try to bypass the "state income tax argument". If that was true, some state could pass a law that makes every drug legal and sue the Feds for interfering with state sales tax revenue. I'm not saying there has NEVER been such a case or there would NEVER be such a case in the future, but I can't see the court system allowing the states to have standing over JUST the lost tax revenue (in a case involving a banned good or service).

Again, just my opinion, but this is all going to be very new territory for a couple of years. And I would imagine that by the time the courts have opined on whether a deal "should have been approved" by the NCAA, the deal will have long ago evaporated.

Unless Jason Setchen finds a way to bulldog these cases all the way to the Supreme Court in a year or two of litigation time.

 

[brock]

Our coaches must think it will help a lot because a lot of recruits are referring to it in some interviews

 

[AUcane]

How it helps us is the Florida Gov. signed this into play starting in 2021 which is two years before any team outside of the state of Florida... Which means college players within the state of Florida can get paid legally for their name , image and likeness being used in various capacities...

Thanks. Didn’t realize we had such a head start on this one.

 

[Squid Bumciorek]

Our coaches must think it will help a lot because a lot of recruits are referring to it in some interviews

If Diaz is on the ball, Miami has put together some sort of program to help athletes figure out the NIL stuff. It would give Miami a massive edge over even the biggest P5 schools. I think I said this in another thread a while back, but Miami's edge has always been innovation. But just like in the real world, eventually others will catch up, so Miami will have to innovate again.

Since Florida is the first state that is going all-in with the NIL, the Georgias, Ohio States, and Alabamas aren't going to be able to capitalize on that for a few years. Could they have programs now set up to show recruits what they might be making in 2024 or 2025? I guess so, but you think a junior in high school is thinking about NIL opportunities 4 years from now? Right now Miami can show recruits the types of NIL opportunities in the immediate future and could have programs to help recruits navigate tax situations, give them an advocate for dealing with the NCAA, etc. I mean this stuff is so next level and UM is in such a huge media market that Miami could have a bigger competitive advantage in recruiting than any program for about 3-4 years if it plays this right.

 

[RVACane]

I don't think so. States have authorized the GENERAL concept of making money off of NIL. But the devil is always in the details. The IRS (Treasury) Regulations are about 5 or 6 times as thick as the actual Internal Revenue Code. States have AUTHORIZED student-athletes to make money, but they have not set up detailed guidance and rules.

The NCAA's concern is on amateurism and extra benefits (and benefits that are just sham payments for ATHLETIC PERFORMANCE, as opposed to, say, a paid spokesman for a legit business).

If anyone would sue the NCAA, it would be the players themselves who have been denied an opportunity to earn money. The states have no standing, no justiciable interest. The state doesn't get the monetary benefit of the "approved" or "denied" deals.

And, yeah, let's try to bypass the "state income tax argument". If that was true, some state could pass a law that makes every drug legal and sue the Feds for interfering with state sales tax revenue. I'm not saying there has NEVER been such a case or there would NEVER be such a case in the future, but I can't see the court system allowing the states to have standing over JUST the lost tax revenue (in a case involving a banned good or service).

Again, just my opinion, but this is all going to be very new territory for a couple of years. And I would imagine that by the time the courts have opined on whether a deal "should have been approved" by the NCAA, the deal will have long ago evaporated.

Unless Jason Setchen finds a way to bulldog these cases all the way to the Supreme Court in a year or two of litigation time.

I’m guessing the loss of state income tax revenue would be tough to argue in states with no state income taxation. The loss of tax revenues could be an argument for standing possibly in states that have a revenue interest maybe???

Can they make a fee trade/commerce argument?

 

[Fluffhead]

I don't think so. States have authorized the GENERAL concept of making money off of NIL. But the devil is always in the details. The IRS (Treasury) Regulations are about 5 or 6 times as thick as the actual Internal Revenue Code. States have AUTHORIZED student-athletes to make money, but they have not set up detailed guidance and rules.

The NCAA's concern is on amateurism and extra benefits (and benefits that are just sham payments for ATHLETIC PERFORMANCE, as opposed to, say, a paid spokesman for a legit business).

If anyone would sue the NCAA, it would be the players themselves who have been denied an opportunity to earn money. The states have no standing, no justiciable interest. The state doesn't get the monetary benefit of the "approved" or "denied" deals.

And, yeah, let's try to bypass the "state income tax argument". If that was true, some state could pass a law that makes every drug legal and sue the Feds for interfering with state sales tax revenue. I'm not saying there has NEVER been such a case or there would NEVER be such a case in the future, but I can't see the court system allowing the states to have standing over JUST the lost tax revenue (in a case involving a banned good or service).

Again, just my opinion, but this is all going to be very new territory for a couple of years. And I would imagine that by the time the courts have opined on whether a deal "should have been approved" by the NCAA, the deal will have long ago evaporated.

Unless Jason Setchen finds a way to bulldog these cases all the way to the Supreme Court in a year or two of litigation time.

Will be curious to see how all of this shakes out. The NCAA is a funny thing in that it really has no power aside from its members consenting to it. As you know, if they tell the NCAA to stick it up their ***, then there is not much the NCAA can do. It always amazes me how it acts and portrays itself as a part of the federal government but is just a good old fashion not-for-profit who originally was formed to unify some rules of sport.

 

[Squid Bumciorek]

Will be curious to see how all of this shakes out. The NCAA is a funny thing in that it really has no power aside from its members consenting to it. As you know, if they tell the NCAA to stick it up their ***, then there is not much the NCAA can do. It always amazes me how it acts and portrays itself as a part of the federal government but is just a good old fashion not-for-profit who originally was formed to unify some rules of sport.

It's not part of the govt, but so many politicians are getting money from the NCAA that it might as well be.

 

[TheOriginalCane]

I’m guessing the loss of state income tax revenue would be tough to argue in states with no state income taxation. The loss of tax revenues could be an argument for standing possibly in states that have a revenue interest maybe???

Can they make a fee trade/commerce argument?

Good point on no-income-tax states (cough, cough, FLORIDA).

Again, I'm not saying that you could NEVER make the argument, I just don't think it will fly in this situation. I'd be willing to bet you that there is no legislative history establishing "hey, if State X passes NIL, it is going to bring us SO MUCH income tax revenue".

Also, I think the states would fail because most of the commerce is ALREADY LEGAL, say, for professional athletes. So it's not like the NCAA is saying "F the states, we are banning all NIL income", the NCAA is just saying that certain transactions are not approved, most likely for being sham or non-fair-market-value transactions that violate the spirit of amateurism.

The courts and the IRS frequently "set aside" sham transactions when they find them, so I don't see the states having any standing to sue the NCAA.

Individual student-athletes though? Oh, **** yeah.

 

[TheOriginalCane]

Will be curious to see how all of this shakes out. The NCAA is a funny thing in that it really has no power aside from its members consenting to it. As you know, if they tell the NCAA to stick it up their ***, then there is not much the NCAA can do. It always amazes me how it acts and portrays itself as a part of the federal government but is just a good old fashion not-for-profit who originally was formed to unify some rules of sport.

While I basically agree with you, the NCAA has a key power.

"You are ineligible to play. If your university plays you, the wins will be erased."

This power has kept everyone in line for decades.

 

[TheOriginalCane]

If Diaz is on the ball, Miami has put together some sort of program to help athletes figure out the NIL stuff. It would give Miami a massive edge over even the biggest P5 schools. I think I said this in another thread a while back, but Miami's edge has always been innovation. But just like in the real world, eventually others will catch up, so Miami will have to innovate again.

Since Florida is the first state that is going all-in with the NIL, the Georgias, Ohio States, and Alabamas aren't going to be able to capitalize on that for a few years. Could they have programs now set up to show recruits what they might be making in 2024 or 2025? I guess so, but you think a junior in high school is thinking about NIL opportunities 4 years from now? Right now Miami can show recruits the types of NIL opportunities in the immediate future and could have programs to help recruits navigate tax situations, give them an advocate for dealing with the NCAA, etc. I mean this stuff is so next level and UM is in such a huge media market that Miami could have a bigger competitive advantage in recruiting than any program for about 3-4 years if it plays this right.

Again, purely my opinion at this early stage, but...

I think that Athletic Departments and B-School Marketing Departments will get together on this, both to teach and guide on how to build a "personal brand" in this new economy.

Remember, schools can't set up the deals ("Hey, Tate, let me introduce you to the president of Williamson Cadillac, he really likes your Instagram account, and he wants to pay you $100K to put you and your hot girlfriend in some TV ads").

But once these kids are taught how to build their following and market their influence, it will be an interesting new world.

Some other possible (eventual) benefits...maybe some of these kids will try harder to stay out of trouble, so as not to damage "their brand"...maybe some of these kids will gravitate more to B-School majors...and bigger cities...and multicultural audiences (hmmm, who would this help?)...maybe we will start to see these benefits accrue in other sports, including women's sports, and maybe this could help to bring back some of the Olympic sports and/or get more scholarship money flowing, particularly in baseball...

 

[Ajcane8]

Will be curious to see how all of this shakes out. The NCAA is a funny thing in that it really has no power aside from its members consenting to it. As you know, if they tell the NCAA to stick it up their ***, then there is not much the NCAA can do. It always amazes me how it acts and portrays itself as a part of the federal government but is just a good old fashion not-for-profit who originally was formed to unify some rules of sport.

And those rules were written when the players wore leather helmets and the games were broadcast to 35 people on student radio. Perhaps they were “amateurs” back then.

 

[Fluffhead]

While I basically agree with you, the NCAA has a key power.

"You are ineligible to play. If your university plays you, the wins will be erased."

This power has kept everyone in line for decades.

Sure... but if the member institutions (or, Power 5 conferences) said we don't want you to have authority anymore then that would go out the window. But agreed, that would be a seismic shift and one I can't imagine happening soon.

 

[Ajcane8]

While I basically agree with you, the NCAA has a key power.

"You are ineligible to play. If your university plays you, the wins will be erased."

This power has kept everyone in line for decades.

What’s keeping the “member institutions” from saying this...