Article from The Atlantic on the NIL

[catsrback76]

Sorry that the link won’t post here without payment. I’m going to simply post the article for your perusing. College athletics has changed for ever with the NIL monies and payments made to athletes. I’m not arguing for or against, but this article simply gives more insights on what is happening and where it’s going towards the future. So from The Atlantic…

“Fan support is a big reason the University of Washington Huskies and the University of Michigan Wolverines will play in college football’s championship game tomorrow night in Houston. That support isn’t just emotional; it’s also financial.

For decades, college athletes received only scholarships as compensation, until legal changes forced the NCAA to let them profit from their own name, image, and likeness. The new NIL era allows individual athletes to accept endorsement deals. But at colleges and universities all around the country, something else has happened: Fan-supported “collectives” have sprouted up to help teams stay competitive by providing broad categories of players with thousands of dollars in cash apiece—ostensibly for their marketing value rather than for their performance on the field.

Looking at how this season’s four-team college-football playoff unfolded, Huskies and Wolverines fans would probably agree that their money was well spent. Michigan, for example, was initially slower than other big-name athletic programs to embrace collectives. Now the university has multiple collectives at its disposal, including the Champions Circle, an official partner of the school’s athletic department. In 2022, Champions Circle raised $7.5 million for the football team. If not for Valiant Management Group, which was founded by the former Wolverines fullback Jared Wangler and bills itself as “the leading sports-marketing agency representing University of Michigan student-athletes,” some of Michigan’s key players might not have returned this year to compete for a national championship. After the Wolverines lost to Texas Christian University in last year’s Fiesta Bowl, Valiant launched the One More Year Fund to entice Michigan players with NFL prospects to remain with the team.

Funds like these are the college-sports equivalent of super PACs. Other top programs have had similar assistance. A collective called Montlake Futures helped Washington retain its core players, including the quarterback and Heisman Trophy runner-up Michael Penix Jr. The University of Texas, the team that Washington beat in the Sugar Bowl to advance to the championship game, has the Texas One Fund, which has paid $14 million to Texas football players since 2021.

The money that fans are pouring into their teams is reshaping the college-football landscape, but it also means they’re carrying a financial burden that shouldn’t necessarily be theirs. Also, none of these fan collectives addresses the real issue: Players are still being shut out of the larger financial empire that they’ve built with their own hard work. Ever-larger broadcast deals have turned college football into a multibillion-dollar sport, but players are not sharing in that revenue.

Although it’s admirable that a Texas nonprofit created a fund that would pay every Texas offensive lineman $50,000 a year with a goal of helping the Longhorns address a team weakness, the university’s athletic department reported a staggering $239 million in revenue in 2022, mostly from media rights, ticket sales, and direct contributions. ESPN’s current television deal with the College Football Playoff pays an average of $470 million annually, which enriches tournament organizers, participating schools, and the stadiums where games are held.

Next year, the playoff will expand from four to 12 teams, which could attract, by one estimate, $2.2 billion in media-rights fees from multiple television partners. Top schools stand to gain a lot more revenue. But longer playoffs mean that top college athletes take on more risk of injuries that could jeopardize their professional career. That players can accept financial support from fans is an improvement over what used to happen, but the real power brokers are still escaping what should be primarily their obligation.

The sham of amateurism was debunked a long time ago, but the college-football decision makers continue to insist on maintaining the ruse because, ultimately, they don’t want to share the wealth.

The NCAA is clearly hoping the day never comes when schools have to directly pay the players a piece of the massive television money they earn, but that day looks more and more inevitable. A class-action lawsuit, House v. NCAA, could completely dismantle the unfair system that the college-sports governing body has constructed. Lawyers for the University of Arizona swimmer Grant House and other plaintiffs argue that college athletes should be paid for what they would have earned before the NIL rules changed in 2021.

If the plaintiffs win, there would cease to be any limits on NIL payments to athletes, and the NCAA would be forced to create a revenue-sharing system with the players. The plaintiffs are seeking more than $1.4 billion in damages—$1.3 billion for male athletes and $50 million for female athletes. (Football and men’s basketball generate the largest share of revenue in college sports.) The trial is set to begin next January.

If the NCAA loses, it will be a fate that the organization has definitely earned. Even if that happens, these collectives probably won’t go away; as the expense of college sports continues to grow, schools will need every resource possible to recruit and retain players. But fans alone can’t solve the basic inequity facing student athletes. The NCAA and its member schools need to start paying their fair share.”

[Montanabob]

and did you catch the comment from Hauck in the post game? reporter announced he was from the atlantic and boobie interrupted him and and basically said - what is that, a magazine?

[Long Time Cat]

Interesting take for sure. I just read another article which I can't find at the moment and I'm not sure my memory is 100% correct, but what I remember it said is that even with this years success Udub football will lose $7 million dollars this year and their sports programs will lose $12 million total. Even if my memory is wrong I guess my question is if the athletes share in the profits what about the losses that most athletic budgets acquire. Do the athletes share in those as well? Now I know that's not realistic but if somehow they're equal partners they should. Or does the ncaa impose revenue sharing. An idea I don't favor, although revenue sharing within conferences could be improved. It will be interesting to watch, but one thing I'm sure of is that college sports as I've known it most of my life is over.

Regardless... GO CATS!!

[kwcat]

Interesting take for sure. I just read another article which I can't find at the moment and I'm not sure my memory is 100% correct, but what I remember it said is that even with this years success Udub football will lose $7 million dollars this year and their sports programs will lose $12 million total. Even if my memory is wrong I guess my question is if the athletes share in the profits what about the losses that most athletic budgets acquire. Do the athletes share in those as well? Now I know that's not realistic but if somehow they're equal partners they should. Or does the ncaa impose revenue sharing. An idea I don't favor, although revenue sharing within conferences could be improved. It will be interesting to watch, but one thing I'm sure of is that college sports as I've known it most of my life is over.

Regardless... GO CATS!!

When I see large athletic departments having losses. I would like to see itemized accounting. I think very frequently the budgets are loaded in such a way as not to show a profit. Whether it’s bureaucracies inside the program or agree just spending where it doesn’t need to be. Just curious.

[coloradocat]

Interesting take for sure. I just read another article which I can't find at the moment and I'm not sure my memory is 100% correct, but what I remember it said is that even with this years success Udub football will lose $7 million dollars this year and their sports programs will lose $12 million total. Even if my memory is wrong I guess my question is if the athletes share in the profits what about the losses that most athletic budgets acquire. Do the athletes share in those as well? Now I know that's not realistic but if somehow they're equal partners they should. Or does the ncaa impose revenue sharing. An idea I don't favor, although revenue sharing within conferences could be improved. It will be interesting to watch, but one thing I'm sure of is that college sports as I've known it most of my life is over.

Regardless... GO CATS!!

The pro leagues use revenue sharing as the basis for what is allocated to player contracts but I don't believe it's simply the top line number, there are ins and outs to get to the sharing number. I imagine if the NCAA/Conferences/Teams are forced into that type of model that the accounting will get even more creative than it already is. I'm sure schools will look for all kinds of ways to fund their programs outside the calculation as well as take responsibility for expenses that were previously allocated somewhere else.

[allcat]

Interesting take for sure. I just read another article which I can't find at the moment and I'm not sure my memory is 100% correct, but what I remember it said is that even with this years success Udub football will lose $7 million dollars this year and their sports programs will lose $12 million total. Even if my memory is wrong I guess my question is if the athletes share in the profits what about the losses that most athletic budgets acquire. Do the athletes share in those as well? Now I know that's not realistic but if somehow they're equal partners they should. Or does the ncaa impose revenue sharing. An idea I don't favor, although revenue sharing within conferences could be improved. It will be interesting to watch, but one thing I'm sure of is that college sports as I've known it most of my life is over.

Regardless... GO CATS!!

When I see large athletic departments having losses. I would like to see itemized accounting. I think very frequently the budgets are loaded in such a way as not to show a profit. Whether it’s bureaucracies inside the program or agree just spending where it doesn’t need to be. Just curious.

Right, it's governmental accounting. They have many funds and play hide and seek unless you are in the room.

[catsrback76]

Interesting take for sure. I just read another article which I can't find at the moment and I'm not sure my memory is 100% correct, but what I remember it said is that even with this years success Udub football will lose $7 million dollars this year and their sports programs will lose $12 million total. Even if my memory is wrong I guess my question is if the athletes share in the profits what about the losses that most athletic budgets acquire. Do the athletes share in those as well? Now I know that's not realistic but if somehow they're equal partners they should. Or does the ncaa impose revenue sharing. An idea I don't favor, although revenue sharing within conferences could be improved. It will be interesting to watch, but one thing I'm sure of is that college sports as I've known it most of my life is over.

Regardless... GO CATS!!

I agree with your take on things as well. Regardless of how this all shakes out, college sports has essentially become a completely different animal that it has been. I’ve loved the aspect of playing for the team because you loved the team and the university…but alas that is all gone now. I never watch the NFL because that piece of professional pay to play has empowered the richer teams and gutted the smaller market teams. I get it, but I don’t have to like it. I love Ted Lasso!

[cats2506]

Interesting take for sure. I just read another article which I can't find at the moment and I'm not sure my memory is 100% correct, but what I remember it said is that even with this years success Udub football will lose $7 million dollars this year and their sports programs will lose $12 million total. Even if my memory is wrong I guess my question is if the athletes share in the profits what about the losses that most athletic budgets acquire. Do the athletes share in those as well? Now I know that's not realistic but if somehow they're equal partners they should. Or does the ncaa impose revenue sharing. An idea I don't favor, although revenue sharing within conferences could be improved. It will be interesting to watch, but one thing I'm sure of is that college sports as I've known it most of my life is over.

Regardless... GO CATS!!

When I see large athletic departments having losses. I would like to see itemized accounting. I think very frequently the budgets are loaded in such a way as not to show a profit. Whether it’s bureaucracies inside the program or agree just spending where it doesn’t need to be. Just curious.

Right, it's governmental accounting. They have many funds and play hide and seek unless you are in the room.

No Kidding, It's not necessary malicious what they do but just seeing a department is in the negative doesn't mean what it does in the private world. I was on our city commission for 8 years, I was probably about 4 years in before I really understood the City budget.

[onceacat]

The article made me wonder what the value of a roster player is given the money in college football.

The new 12 team playoff TV contract is rumored to be worth $2b...the SEC TV contract is worth $300m annually, so lets say that college football brings in roughly $5b in annual revenue.

In the NFL, 48% of revenue goes to the players.

There are roughly 16,000 roster spots in FBS football

Using those numbers, players should be making roughly $150k/year on average. A FCOA at Michigan is roughly $75,000 for an out of state student...so it looks like the average roster player is worth about $75k...A star like Penix or Coram is probably worth 10-20x (Maybe $1-$2m) that, a benchwarmer probably 1/10, maybe $10k/year.

Interesting thought experiment.