Coach Cal, IRS Denial, Vegas NIL Tournament, + ICYMI | NIL Newsletter #230
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Quick Hitters:
Coach Cal Out at Kentucky, In at Arkansas With NIL Backing
On Sunday night, news broke that legendary Kentucky Head Coach John Calipari would be leaving to join Arkansas as their new head coach.
“This is a dream job. It was my dream job. Anybody in our profession looks at the University of Kentucky in basketball and says, ‘That is the bluest of blue,’” said Calipari on Tuesday in his official announcement.
“The last few weeks, we’ve come to realize that this program probably needs to hear another voice.”
As part of the move, Calipari will reportedly have access to an annual NIL backing of approximately $5 million.
IRS Denies Tax-Exempt Status for Collective
A letter was recently released by the Tax Notes publication which details a denial letter sent from the IRS to a collective seeking tax-exempt status.
According to the letter, the collective applying for tax exemption status proposed signing collegiate athletes to independent contractor agreements and then compensate them for promotional work with charitable and educational organizations.
“Based on the facts presented in your application, you serve a private rather than a public interest, because you confer benefits primarily on student athletes of a particular university’s sports teams for the use of their NIL,” the IRS wrote. “You have not demonstrated that these student athletes belong to a charitable class.”
The IRS found that the organization’s non-exempt purpose—in this case acquiring NIL rights—was substantial enough to preclude exemption despite other charitable activities.
Las Vegas NIL Tournament Paves Path for Revenue-Sharing
The proposed tournament will consist of eight-teams, awarding each team a guaranteed total of $1 million, with an additional $1 million guaranteed for the winner.
The tournament, named “The Player’s Era,” is operated by EverWonder Studio and is backed by RedBird IMI, a partnership between RedBird Capital Partners and International Media Investments.
Jordan Cornette, a color analyst with Westwood One, who played at Notre Dame, believes the tournament could drive other season-opening tournaments to follow suit.
ICYMI
Barstool immediately launched a partnership with back-to-back national champion Donovan Clingan. LINK
Sports Media launched an NIL marketplace for college and high school athletes. LINK
Erin McDermott, AD at Harvard, said she was willing to risk losing a few recruits without having a collective. LINK
RJ Davis and Harrison Ingram signed large NIL deals with Hanes and KFC, respectively. LINK
Have you checked out OSC’s website?
Head to www.OptimumSportsConsulting.com to find important resources and features relating to all things NIL. These resources include State by State Resources for Admins, Agents and Athletes, including our initial “OSC Summaries” for over a dozen states coming soon.
More to come too, including links to helpful state information- agency laws and information about school policies, as well as seminar/congressional notes, worksheets, and much more!