We’re at the front end of the new NCAAF landscape with paid athletes, program GMs, and program managed NIL collectives. Programs have been adapting quickly to the new challenges of the additional NCAA and court requirements, but a new structure has taken form.
Also see NCAAF Roster Management – Part 1. Quick Takes
Note: this is the second in a four-part series from longtime OTE reader and commenter ProveIt on roster management, revenue sharing, and NIL distribution in our new era of college football.
One of these will run every couple days for the next week or two. I’m very grateful to ProveIt for helping us out in the doldrums.
If YOU’D like to have articles like this published, feel free to email them to minnesotawildcat at gmail dot com — I may have a little back-and-forth if needed, but I’ll get them polished up and published here. And, if you’re interested in writing more full-time for OTE, please feel free to contact me at that same email. —MNW
College Sports Commission
As part of the House vs. NCAA settlement, the power conferences created the independent College Sports Commission (CSC) as a separate entity from the NCAA. The NCAA and power conference were more than happy to transfer oversight and enforcement of revenue sharing, NIL deal compliance, roster limits, and enforcement of the House settlement to the CSC.
The NCAA and power conferences sought to give the CSC teeth, so they appointed Bryan Seeley as its first CEO: a former U.S. Department of Justice attorney and head of investigations at Major League Baseball.
CSC created NIL Go which evaluates NIL deals using a formula created in partnership with Deloitte – a major audit, consulting, tax and advisory services provider to major firms. Every NIL deal over $600 must be reported to NIL Go (so now we get $599 bagmen handshakes?). Deals not meeting value standards will be flagged. CSC can investigate and discipline parties involved in these deals. In almost all cases, sanctions would go against the athlete and sponsor unless the program staff are really, REALLY stupid to break the nominal rules when work arounds abound, like has happened at (insert SEC program here).
Program Operated NIL Collectives
Program collectives are a necessity. Programs directly control the athlete shared revenue, but need a way to control NIL distribution to manage their roster.
To comply with NIL Go, programs can spread their compensation across multiple contracts and shared revenue – with the NCAA’s formula a player might not warrant $1 million in NIL from a single company, but they can warrant $100,000 from each of 7 companies, and make up the remaining $300,000 from shared revenue.
I expect CSC to issue few if any sanctions. Programs will become familiar with Deloitte’s valuation and structure compensation accordingly. Where NIL contracts go awry, they will restructure the deals to have an increased number of smaller NIL contracts for the athlete, and adjust the shared revenue amount received by the athlete, to provide the same compensation.
The major NIL impact of CSC isn’t its effect on amount paid to athletes or altering pay for play, but removing the distribution of NIL money from boosters and placing under the program’s control, creating a more controlled environment.
This also allows the program to offer incentives to NIL donors which I think will become common. For example, the Iowa Swarm collective offered points to donors, which could be used for perks such as improved season ticket seating locations.
Small NIL Sponsors
Small donors make up a sizable portion of the NIL pool. In late 2024 OTE posted details of the Iowa Swarm collective 2023 revenue. Digging deeper, 7 entities out of the approx. 2,900 total donors accounted for about $1 million of the NIL reported $2.54 million revenue. The small donors accounted for over 60% of the collectives revenue – fund targeted at least $200 from donors, typical donor contribution averaged $500 to $550 each.
NIL Collectives will need to develop methods to take in money from boosters who don’t own a company. Cameos were originally promoted to small donors, but they would need some structure for the program to direct where this money goes. The obvious is a non-profit that donors can give to that pays athletes to advertise a cause (not to be confused with non-profit collectives which the IRS nixed). At the extreme, they might even try schemes that more closely resemble a money laundering operation, with donors overpaying an entity for a nothing service/product (like photos autographed by the coaching staff), with the revenue spent as NIL contracts to athletes. What is certain: they will find efficient ways to take in these donations.
Non-Revenue Sports
Programs are starting with similar allocations of player shared revenue between different sports (typically about 75% to FB), a hint they’re all likely using the same financial analysis. Very little is allotted to non-revenue sports. Unless a donor specifically gives to a sport or athlete, I expect little to none of the NIL money raised by the programs to flow to non-revenue sports.
This doesn’t mean that non-revenue sports get left out of NIL. I expect many of these teams to find individual sponsors, such as OSU women’s basketball affiliation with the Elk + Elk law firm. They don’t receive arena banners like donors to the athletic department, but do record social media content, undertake social media campaigns, have courtside interviews, and get to advertise their affiliation with the athletic department.
Another path is the ability of the athletes to use their name, image, and likeness to hold fundraising events. An example is the annual combined OSU women’s basketball and volleyball bingo and auction event staffed by the athletes, where the proceeds from the $100 entry fee and auction are divided equally among the athletes.
Coming in the series:
- NCAAF Roster Management – Part 3. Program Revenue
- NCAAF Roster Management – Part 4. Conference Revenue
