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NIL collectives are now saying the quiet part out loud

Eric Prisbell04/18/22
Article written by:On3 imageEric Prisbell

EricPrisbell

CameronWard
Cameron Ward transferred from FCS member Incarnate Word to Washington State earlier this year. (Courtesy of Washington State Athletics)

For months, industry sources have told On3 that some donor-driven NIL collectives have pooled millions of dollars from boosters in attempts to raid the transfer portal and lure players to campus with lucrative compensation packages. All the while, specific dollar amounts and names of transfers landing five- and six-figure deals have been kept on the down-low. 

But Thursday’s report by the deeply sourced John Canzano marks the start of a new phase in this NIL space: Collectives are now stating publicly – brazenly – the financial terms of agreements that attract transfers to campus. In this case, the going rate for a capable Pac-12 quarterback is now public knowledge. 

Canzano detailed that the Cougar Collective, which is affiliated with but operates independently of Washington State, put together a financial package totaling $90,000 for quarterback Cameron Ward, who transferred in January from FCS member Incarnate Word. The deal includes a contract with a housing firm for the school year that provides a Pullman, Wash., apartment. Ward also will drive a new pick-up truck for the year from a booster-owned car dealership. And he receives $50,000 in cash for promotional appearances he will make in the next year. 

“For smaller schools to compete, it [a collective-driven deal] is going to be very important,” one of the collective’s members said in the story. “Our donor base is strong but nowhere near some of the big hitters.”

The NCAA doesn’t have many NIL rules but does prohibit pay-for-play deals and recruiting inducements. Ward’s deal appears to creep right up to the line of a recruiting inducement, even by the most generous assessment. And stating the financial terms publicly sends a clear message to the NCAA: “Yes, this is the deal we provided to land Ward. What are you going to do about it?”

We’ve entered the catch-me-if-you-can phase of the young NIL era. The NIL deals designed to secure recruits and transfers are becoming more transparent. And by stating the terms publicly, it reflects a total absence of concern about NCAA enforcement of NIL, a sentiment now pervasive throughout college sports.

“I was not surprised it [the deal] happened, but was surprised the collective would talk so openly about the deal … and about discussing similar deals with other potential players,” Mit Winter, a prominent Kansas City-based sports attorney, told On3.

While the NCAA rule prohibiting recruiting inducements is common knowledge, Winter said “everyone also knows the NCAA has not done anything – at least publicly – to enforce that rule. So I think some collectives feel there is no downside to doing these deals, and that they should even publicly disclose them to make potential recruits aware of them.”

Chris Aumueller is the CEO and founder of the athlete branding and storytelling company FanWord. He told On3 that he understands why the collective went public with the figures: It sparks the imagination of future recruits. But by divulging the financial terms, he believes “this is going to start some sort of domino effect. And, honestly, if this does become more of a norm (public disclosure of financial terms), completely aside from legal implications and ethics, I am not sure it would be good for college athletics.”

Collectives don’t seem to be worried about NCAA

The NCAA has made information-gathering calls to schools, including Miami, BYU and Oregon, but has shown zero appetite to formally enter the enforcement arena on NIL deals. The association has shown neither the will nor the ability to police a space that numerous coaches and NIL experts say is out of control and has no end in sight. The new recruiting battlefield now stars ambitious, school-specific collectives capable of luring prospects with huge war chests.

You can basically buy players,” Alabama coach Nick Saban told The Associated Press last week. “You can do it in recruiting. I mean, if that’s what we want college football to be, I don’t know.”

As enforcement continues to be nonexistent, collectives and schools will continue to tiptoe further into the proverbial gray area. Consider the Matador Club, a donor-led collective affiliated with Texas Tech. In a letter from wealthy Texas Tech alum Gary R. Petersen, a minority owner of the Houston Texans and Astros, that was seen by On3, Petersen said the collective to date has raised a little more than $2 million. It has sights set on raising another $1.3 million in the next couple months.

The letter invited select individuals to an “intimate evening of cocktails and hors d’oeuvres with 30-40 Texas Tech donors” in Houston on April 25. Petersen wrote, “I, personally, am not a huge fan of the way things are currently unfolding in college athletics, but the reality is that we must play the NIL game to be competitive. … Our goal is to capitalize on this disruption and develop NIL into a strategic advantage for Texas Tech.”

None of that is surprising. But what is noteworthy is that Petersen states that Texas Tech athletic director Kirby Hocutt and football coach Joey McGuire will be at the gathering in Houston to “speak on the matter at hand.” A school is not permitted to assist in the operation of a collective. But just how close administrators can get to steering one toward specific aims remains an open question. The lines, in those cases, are blurry.

And in the Washington State collective deal with Ward, the lines have been obliterated. The price tag on a starting Pac-12 quarterback is now public. Let compensation negotiations between athletes and collectives everywhere ensue. 

It is a safe bet, Winter said, that schools aren’t happy with collectives when they see these types of deals go public and probably are telling the collectives not to disclose the financial terms in the future. After all, it places the school in a compromised position if it knows an athlete has accepted a deal that violates NCAA rules, and in many cases state law and a school’s own NIL policy.

But, again, the fundamental question: So what? Who is going to stop it?

“Are they going to be forced to declare the athlete ineligible?” Winter said. “Probably not in the current environment where the NCAA isn’t enforcing the inducement prohibition. But if the NCAA starts to enforce its NIL rules, I think we will see collectives being very quiet about the types of deals they are doing.”