NIL Newsletter #157 | IRS Crackdowns, Coaching Resignations, Fundraising Frenzies + ICYMI
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Major News
NCAA President Charlie Baker Sides with IRS
On Friday of last week the IRS Chief Counsel published a memo that suggested that donations made to nonprofit NIL collectives were not tax exempt because the benefits that they provide college athletes are not incidental.
More than 200 Collectives exist among the 141 FBS schools, many of which have been granted 501(C)(3) status and receive millions in donations from boosters who believe their gifts fall under tax deduction.
With this news, many nonprofit collectives have paused or slowed operations since the memo, while others aren’t worried.
Agreeing with what Baker is calling an IRS “ruling,” Baker said, “In the context of what NIL is supposed to be about and how it is supposed to work and what it is supposed to provide, which is a service for an entity that is basically making what we’d describe as a business expense … yeah, it should be treated as a taxable event.”
(link)
NIL Leads Oregon State basketball Assistant Tim Shelton to Resign
As predicted in one of our past newsletters (read it HERE), the pressure from NIL is leading coaches to resign.
Oregon State men’s basketball assistant coach Tim Shelton resigned his position, effective Friday.
While Shelton enjoyed his year at Oregon State, Shelton cited the modern demands of college basketball as his reason for leaving.
Shelton explained that he was fighting an uphill battle with OSU’s NIL resources, saying that his biggest fear was that the players don’t feel like the school has enough resources to keep them.
While Shelton doesn’t believe that it should be a pay-to-play model, he recognizes that it is that model that he is competing against.
Shelton may be one of the first, but certainly not the last to make a resignation in response to NIL changes.
Read more HERE
New Utah Football NIL Collective CEO Fundraising Frenzy
Kyle Brennan, a former Utah deputy athletic director, will now oversee the football program’s main NIL fundraising… an interesting move after his past relationship with fundraising.
In April, Brennan abruptly resigned from AD at Illinois State after accusations about how he handled donor money.
According to reports, during a donor trip to Indianapolis in 2021 for the Big Ten championship, Brennan spent $23,000 on the football game, hotel, and strip club outing. All of these expenses were filed under “donor stewardship.”
Given how unregulated NIL and collectives are in their current state, it is unsurprising to see some extravagant spending. Whether this trend will continue is only something that time will tell.
(Link)
FOR ATHLETES
Highest On3 NIL Valuations from the OT7 Finals
Some of the top receivers in the 2024 football class began the OT7 Finals competition on Thursday night.
In response, On3 broke down some of the highest NIL valuations. Here are the top three:
Jeremiah Smith
A top-ranked receiver and Ohio State commit with 59K social media followers received a $457K On3 NIL valuation.
KJ Bolden
The fifth-ranked prospect in the country with 45K social media followers has yet to commit. That said, with Georgia, Clemson, Alabama, and Ohio State among his top choices, On3 gave Bolden a $423K NIL valuation.
Mike Matthews
As a top 20 recruit with 23K social media followers, Matthews has also held out on committing to a school too early. His lower follower count and lack of commitment has seemingly no impact on his NIL valuation though, rounding out with a $326K estimate.
find more valuations HERE
FOR ADMINS
UA Barnes, “You better adapt… or you’re going to be left behind”
In regards to the transfer portal and NIL, Barnes held a very realistic approach to it all. “This is the way it is, so you better adapt and adjust, get with the program, or you’re going to get left behind.”
According to Barnes, Players that don’t play or play as much as they think they should are going to leave, and programs are going to change every year. It’s a common thing. (Link)
For AGENTS
No New Updates!
ICYMI:
Tennessee Baseball hit a team-wide NIL deal with Volunteer Club. (Link)
The EA Sports video game we have been discussing is set to return in 2024, with players expected to earn around $500 from their appearances in the game. (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!