Newsletter #87 | New NCAA Guidance, Jeffrey Kessler, Coaches/ADs comment, Antoine Davis is staying, California SB-1401's economic impact + ICYMI Ticker
Welcome to the NIL Newsletter by Optimum Sports Consulting - providing valuable, actionable NIL resources for student athletes, administrators, agents and other sport professionals.
Recapping NIL This Week:
DI Board of Directors issues updated NIL guidance to schools
The Division I Board of Directors on Monday issued guidance to schools regarding the intersection between recruiting activities and the NIL environment. “Board members emphasized a continued support for the ability of student-athletes to benefit from their NIL. The guidance is intended to provide clarity for those engaging in a rapidly evolving NIL environment, acknowledging that the environment will continue to evolve, and ongoing attention will be needed to ensure student-athletes are able to benefit from these opportunities.” More HERE.
Here are the specifics of the actual NIL guidelines that were just sent out to NCAA Division I membership, effective immediately and obtained by @TheAthletic (via Nicole Auerbach). Tweet HERE.
“Today, the Division I Board of Directors took a significant first step to address some of the challenges and improper behaviors that exist in the NIL environment that may violate our long-established recruiting rules. While the NCAA may pursue the most outrageous violations that were clearly contrary to the interim policy adopted last summer, our focus is on the future. The new guidance establishes a common set of expectations for the Division I institutions moving forward, and the board expects all Division I institutions to follow our recruiting rules and operate within these reasonable expectations,” said Board Chair Jere Morehead, President, University of Georgia.
NCAA Social Series: Name, Image & Likeness Guidance - YouTube.
Alston/House attorney Jeffrey Kessler comments on NIL rule changes
Jeffrey Kessler, a lead attorney for athletes in House v. NCAA and arguably the nation’s top sports litigator, says he is “happily monitoring” the situation surrounding the NCAA’s announcement Monday that its Division I Board of Directors had passed specific guidelines aimed at adding enforcement teeth to its nearly year-old interim NIL policy. “Frankly, I think a lot of this will be talk and very little action, precisely because they know what will happen,” said Kessler.
In foreshadowing the proposed guidelines, one of the working group members, Ohio State AD Gene Smith, publicly acknowledged over the past week that the move could spur new lawsuits against the courtroom-weary NCAA, but that this was nonetheless necessary to uphold the integrity of the “recruiting space.” Hours before the NCAA announced it had adopted the new guidelines, Smith told Sportico the working group did not itself “go into depth on the potential legal issues,” but that it was mindful that “our society was highly litigious.”
NCAA leaders have said they failed to anticipate such developments as NIL collectives or all-team endorsement deals, which were never intended to take hold during the interim period. But in Kessler’s mind, these ships have already found their way to open waters. “The only basis you could have for going after that concern would be some claim that it was necessary to preserve competitive balance. But the problem in that argument is that it has already been established that there is no competitive balance in FBS football or Division I basketball. And, if there is no balance, there is no balance to preserve.”
College coaches, leaders share candid thoughts on future of NIL
Quotes from CBS Sports reporter Dennis Dodd’s latest work:
"I'm all for players making money off their name, image and likeness. But right now, it's created a lot of unrest because we all feel like there's no rules -- or the rules that are there are not being enforced. It creates a lot of jealousy. If you do nothing, you're going to fall behind. If you go extreme, you may put yourself out there to be vulnerable to sanctions down the road." - Ohio State Football HC Ryan Day
"They're boosters. Where did it go off the tracks? The collectives are boosters. The guidance is you're in violation of the rules." - West Virginia AD Shane Lyons, Chairman of the NCAA Council
"First of all, I think it's [NIL] wonderful. I took out all the [student] loans, I didn't have any income coming from home. I paid those back until I was 38 years old. I know the value of [players] having money in their pocket. Players deserve that." -- Oklahoma Football HC Brent Venables
"There's got to be some way this thing can get back within the guardrails. The NCAA is obviously nervous about putting limitations on people. It's not all the NCAA. The reality of it is, it's a whole different world out there. There's opportunity for third parties to interject themselves into our world more than there ever has been. I don't know if we're going to get our arms around it. The more you get your arms around it, the more it changes shapes." - Kansas Basketball HC Bill Self
"It cannot, and I'm confident, it will not go on forever [in this form]. Now it's starting to impact too many athletics, coaches and institutions." - Big Ten Commissioner Kevin Warren
Detroit Mercy’s Antoine Davis won’t transfer after new NIL deal
Ahead of his big transfer decision announcement on Monday, Detroit grad transfer Antoine Davis reportedly signed a new NIL deal with GlowBalls, a Chinese basketball manufacturer, according to Jeff Goodman. That deal apparently had a direct impact on his transfer decision as he told Stadium that he will not transfer out of Detroit now.
“Antoine Davis told Stadium he will remain at Detroit and finish his career playing for the Titans,’ Goodman tweeted. “Was leaning towards BYU, but source said NIL deals — which he will split with teammates — helped him decide to remain at UD.”
Through the deal, which is worth potentially in the six-figure range, Davis will produce custom basketball with logos and designs that he’ll make with a marketing team.
On3’s Joe Tipton announced last Thursday that Davis would be announcing his commitment decision on Monday. The top choices were Maryland, Georgetown, BYU, Kansas State, or a return to Detroit. The reigning Horizon League Player of the Year sits No. 22 on the NCAA D-I all-time scoring list with 2,374 points. At Detroit, Davis played for his father, head coach Mike Davis.
Economic impact analysis of California SB-1401, in hands of Senate Appropriations Committee
Senate Bill 1401, the “College Athlete Race and Gender Equity Act,” has been placed in the suspense file, a repository for legislation carrying significant fiscal impact, and could be voted on later this month. As law, SB-1401 would create a revenue-sharing arrangement between schools and SAs in the money-making sports, football and basketball. Millions of dollars typically used to support athletic department operations instead would be placed in “degree completion funds.”
The requirements could place the California schools in the Pac-12 and Mountain West conferences at a significant financial disadvantage, create Title IX complications and threaten the long-term viability of Olympic sports like softball, gymnastics and swimming.
An analysis published by the Appropriations Committee prior to SB-1401 moving to the suspense file projected an economic impact of $34 million to $36 million annually for the University of California and $1 million to $9.3 million annually for the California State University.
SB-1401 differs from NIL in crucial ways: NIL grants all college athletes the opportunity to be compensated by the private sector in exchange for product endorsements // SB-1401 permits athletes in the profitable sports to receive payments directly from the same athletic department budgets that support daily operations for dozens of money-losing Olympic sports protected by Title IX.
California State University estimates an impact of $1 million to $9.3 million for its nine Division I campuses, or the displacement of between 17-34% of total athletic department revenues for those campuses. The CSU also indicates that the redistribution of revenues will be disproportional to male and female athletes and could cause its institutions to be out of compliance with federal Title IX requirements. Additionally, the UC estimates General Fund costs of approximately $1.44 million each year to hire one full time staff per campus to manage the degree completion funds while the CSU estimates General Fund costs of $3.3 million each year for these activities.
ICYMI Ticker
Katie Davis, a partner at James Moore, explained that the concern is about regulatory and public perception risks of NIL collectives established as 501(c)(3) organizations. “If NIL collectives choose to go that route, they need to be aware of the additional regulatory burdens — including availability of IRS filings to the public and the public’s response to donors taking tax deductions to pay athletes large sums of money, she said. “As more states allow schools to be involved with NIL deals, schools could be more closely tied to the collectives, even if they’re not directly operating them. We want to make sure universities and the collectives have considered all of these items prior to formation of the collective.” Fellow firm partner Ken Kurdziel, added a key piece of advice. “At a minimum, we recommend universities work with legal and tax counsel to draft an appropriate statement for the marketing materials and contribution receipts issued by the NIL collectives,” he said. “These materials would indicate that donors should seek advice from a tax professional regarding the deductibility of their donation as opposed to explicitly stating donations are tax deductible.” Story HERE.
Georgetown and Altius Sports Partners have a new deal. More HERE.
North Texas and The Brandr Group signed a group-licensing agreement. Announcement HERE.