I think the point you’re missing is that the deals don’t have to be that convoluted. The social media example is the prime case. Someone with 1M followers is worth well into the upper 6 figures for social media advertising just from a few ad retweets. The secondary case is the stacking up of many smaller deals that add up to a lot of money. There are so many very easy ways to skin this cat. Just an example….if 10 different local small businesses each offer an athlete $20k per year just to appear in one billboard ad and do some retweets / social media posts, that’s $200k right there. They can make the same offer to other athletes on the same team, thus establishing the FMV. $20k per year is nothing in the grand scheme of things, it’s going to be very difficult for Deloitte to show that’s not above board. That’s not even taking into consideration the most tedious, but also most foolproof solution - multiple $599 contracts that don’t even have to go through the clearinghouse. This whole thing was set up to fail. The only question is how many different ways will it fail?
What if it doesn’t pass the smell test? They are ineligible forever? Who gets punished? Is the offering entity going to jail? Does the program get banned from the CFP or NCAA Tournament? If the NCAA isn’t ultimately making the call, who in the hell can even enforce the eligibility? The SEC is going to tell some dude for Alabama he can’t play? What if he does play? The league stops the game immediately and rules it a forfeit….and everyone changes the channel? Way more questions than answers…..but when you get down to it, the players still have all the power. I don’t see the B1G / SEC not getting heavily involved in the arbitration on behalf of any high profile cases where someone ends up in another league if their deal doesn’t get done.
Depends on what your definition of FMV is. If you are basing it on the traditional definition of “was this advertising exposure worth what I paid for it”, then there are a littany of ways to argue for and against. If its “I have to pay this much because another school that was putting forth an equally questionable deal that was offering almost this much”, then yes….its absolutely FMV. So if an athlete testifies in court or arbitration that they had another NIL offer from another company but it was prohibitive to where they couldn’t do both, then there you have the FMV case to be proven, because you have 2 offers on the table. The validity or underlying metrics of the 2nd deal never even get questioned because it wasn’t accepted. It just has to exist.
So everyone will get sued. I guess I agree?
It all depends. Deloitte can say they think a deal is worth $150k when its actually a $175k offer. What happens? Deal gets rejected? Who knows. Commission decides, and I bet they don’t decide the same way every time. If it’s rejected, can they still do the deal for $150k, and no need for a 2nd hearing? If so, that’s going to be a game where the limit is continually being pushed up into the max of what is accepted….every deal is going to be “high-balled” to let Deloitte just set the rate, and then Deloitte essentially become the kingmakers and price fixers for all the players. This creates anti-trust issues left and right.
I think everyone envisions this world where some elite prospect is getting an offer of $5 million for something like $300,000 worth of endorsement value, and now there’s this agency that can snuff that out. But reality isn’t that simple. The eventual legal precedent will be set by what happens on the margins, like in the case above.
Perhaps “opt-in” is the incorrect phrasing, but what I’m referring to is the process by which the players defer their right to litigation and instead pursue arbitration if they have what they feel is a legit NIL deal that gets rejected. As you said, the players will be signing these NIL deals before they enroll and join the team. They will expect their deals to get rubber stamped prior to enrollment and starting practice. So in reality, they will be able to pursue legal action on a rejected deal if they have not yet enrolled, participated, and received any revenue sharing payments. They will be able to bypass the arbitration in these instances. It’s more of a gray area if they are already enrolled and have already received revenue share payments between Year 1 and Year 2, may depend on if they enter the portal, transfer down or up a division, etc.
But essentially, new incoming athletes from HS and JUCO ranks will have a path to go straight to the courts if they get an unfavorable ruling, because they aren’t granting any rights for the schools to use their NIL until they actually show up on campus and start team activities.
This is another path that’s going to get tested. Why should anyone ever be in a position where they cannot enter a business arrangement that would be beneficial to them, and simply accept something that is offered to them in exchange for doing something that isn’t illegal?
What’s actually going to happen is this. There are going to be around 7,000 athletes just in P4 football and MBB alone that are eligible for private NIL deals every year. A large number are going to sign them, and many are going to sign multiple deals.
There will be tens of thousands of deals that have to get processed a few times per year that align with the portal windows, and every player (and their school) are going to want approvals to happen post-haste so the player can start getting paid, and the school can be confident in their roster. They’ll also want them to be cleared prior to enrollment at new school, if they are in the portal. These deals are also going to be lengthy and complex in nature and filled with all sorts of legal jargon that has to be parsed through by these analysts at Deloitte.
Long story short, Deloitte’s going to run into a bandwidth issue very quickly where they cannot keep up with doing legit contract reviews in a timely manner. Players who get stuck in limbo will sit and refuse to practice / play until their case is resolved (including arbitration). There will be public scrutiny on Deloitte holding the players hostage unless one of two things happens…..they have a wide tolerance window where only especially egregious deals are getting rejected, or, they have a very severe threshold where deals are almost automatically rejected unless very specific criteria are met. Scenario 1 will render their very existence to be practically meaningless, and Scenario 2 will lead to class action litigation very quickly. Neither is a desirable outcome for this new model.
Well that’s going to turn up the heat on the decision timing. See above. Surely there is an option to simply return the money if a deal is rejected?
in a cologne commercial. Then I went to “who in the hell even thinks about buying a product that provides only a smell….from a damn TV commercial?”
