Thank you for this!
So the gist is that schools may now do first-party pay-to-play (and boosters can contribute to the fund for that), with a defined all-sports âsalary capâ thatâs the same for every school⌠but there is supposed to be no more third-party âletâs-pretend-itâs-NILâ pay-to-play.
Of course the devil will be in the details (and the enforcement). And by the time I understand this weâll have moved on to the next untenable scheme.
I think this has been brought up here before, but does anyone know how this will affect basketball only schools in the Big East? Will they be able to dedicate basically all of the $22m to basketball?
Good question. I need to ask some of my XU contacts.
My hunch is they will be allowed to, but their conference payouts are so much smaller that getting to the $22m will be a struggle.
I think youâre right the problem will sort itself out.
Iâll give a reply when I get an answer.
Question on the back pay money (for 2016-21 athletes): Where is that money coming from? Are schools required to figure out how to fund that, or�
And a question on the $22m cap: Does that mean if an ACC school can fund that $22 million, theyâre on âequal footingâ with the richer SEC and Big 10 schools? (Theyâll still lag on coachesâ salaries, facilities, exposure, etc.; I just mean in terms of âshopping for playersâ)
The NCAA is funding backpay over 10 years:
From another story:
The NCAA is responsible for paying the amount over a 10-year period, roughly $277 million annually. About 60% of that will come from a reduction in distribution to its schools. The NCAA is responsible for closing the 40% gap through other means, such as reserves, other net incomes and a significant reduction in operating expenses of as much as $18 million annually.
Re: âequal footingâ I think the answer is yes in terms of institutional payments, but I imagine thereâs gonna be some jockeying around third party NIL deals and whether they are fair market or not.
That part will be interesting. But if they truly are FMV (I guess thatâs a big if; more lawsuits incoming), then I would think for the most part they wonât be significant differentiators relative to the institutional payment. Plus theyâll be limited in number if only because there are only so many LifeWallet & Good Feet Store situations out there.
I donât see an institution as incompetent as the NCAA being able to do a good job determining the fair market value of athlete endorsements which are already pretty nebulous.
Itâll be interesting to see who they hire to run the NIL Clearinghouse. Even if the 3rd party figures out a way to calculate FMV appropriately, I question whether the NCAA will actually enforce the clearinghouseâs decisions.
They hired Deloitte for the clearinghouse. Itâs a ways down in this story:
Thanks, I had seen Deloitteâs name tossed around the 247 forum, but couldnât find anything to really confirm it.
Itâs a very nebulous concept, but I think throwing a lasso around the FMV is nevertheless an easy project. You donât have to actually calculate FMV with any precision, you just need to look at other endorsement deals and use them to set a reasonable upper bound (given a few basic inputs, e.g. sales & revenue). A Deloitte intern can do it in an afternoon, including the PowerPoint.
So wouldnât that inevitably turn into everyone figuring out the upper bound and that being the new de facto NIL deal amount? Seems like they should just say that number now and cut out the lawyers
Is it going to be weighted by team contribution? Is a 20 ppg scorer the same as a 10 ppg scorer or 10 apg for these purposes?
This has some background on the Big East issue. Facts may have changed since this summer though ($$ link)
TLDR - if Big East schools can come up with the 20-23 million (whatever the final number is), then they could be in a great position. But without football, they wonât be in a great position to come up with the 20-23 million.
(TLDR ends here, we now return you to your previously scheduled TL programming already in progressâŚ)
The real legal question we need some legal dork to answer is what happens to the settlement after Wilken approves it.
I mean the whole reason we are where we are is because of Kavanaughs concurrence and we only have Kavanaughs concurrence because previous litigants (cough cough - thanks UVaâs own Kenny E and Beth Wilkinson) were brain dead and kept appealing their Ls from (what I think were) fairly decided cases previously in front of Wilken.
TLDR - Wilken seems like a reasonable human being, but she might be the last one who is
And in irony of ironies, Wilkinson was Kavanaughâs rabbi/sherpa, wasnât she? (This isnât exactly correct, or at least the correct term for the services she provided, but in any event, Iâll leave this because it is mildly interesting info that unfortunately has had too much of an effect on the sports we enjoy watching)
Itâs not one number, because itâll vary based on a few factors, but yeah, I would imagine we quickly coalesce around general knowledge that âFor this sort of endorsement with this size company, we can pay $X.â You still have to submit to Deloitte but everyone knows in advance what theyâll allow. It would be unworkable otherwise.
Thereâll probably be like a range, or most relevantly, some sort of cap. And then above that, theyâd be suspicious.
The procedural stuff is gonna matter a lot though. Like, on one hand, you have â that seems fishy. We will have our best guys work in shifts and get back to you in ⌠oh 5-10 years or so. And in the interim itâs fine.
And on the other â thatâs sketch. You canât play that guy UNTIL you prove to us that itâs legit. (Which will of course lead to the first legal challenge â hooray)
I donât expect much to change with revenue sharing. Maybe in time, I donât know. My guess is itâll eventually replace the âextra dealsâ for the most part. For example everything at UVA is in terms of Base pay + X. We never hear Johnny Jumpshot is being offered $400K. We hear heâs getting Base + 200. We have to secure outside deals to make up the extra 200. Thatâs the way I understand it anyway.
I donât think many if any schools are in the financial position to pay athletes $20M annually as is. Definitely advantage SEC & Big 10 if this does turn into a new front of the NIL race. But my guess is weâll just see those outside funds previously tagged for extra deals now shifted in-house and thatâs mostly what revenue sharing will be at the start.
So our hoop guysâ base is 200,000?