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In the face of NIL deals for free products, athletes recommend cash

Andy Wittry06/17/22
Article written by:On3 imageAndy Wittry

AndyWittry

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ATLANTA — A week after Ohio State quarterback C.J. Stroud received a lease for a $200,000 Mercedes G Wagon through an NIL deal — an upgrade in value over the originally agreed-upon Bentley Bentayga — and after Boston College‘s Phil Jurkovec landed an Audi S7, UCLA quarterback Chase Griffin said that, personally, he gets around the Bruins’ Westwood campus on a scooter.

“That’s sort of just to be funny,” Griffin said after the tongue-in-cheek comment, when asked about the recent car deals at the inaugural NIL Summit, where he was named Male Athlete of the Year.

“But on the serious side, I think product deals can be a trap for some kids — not a trap, but just not optimal — cause that car is cool but what happens when you’re not a college athlete at that university. Are they still paying that lease? Versus if they gave you that amount that they’re paying on the lease per month and they gave that just to you outright for the four years you were there. That’s serious money that you could have been investing that you still keep after graduating.”

Football players, particularly those who are high-profile quarterbacks or who play in the Power 5, are the most prominent case of a fundamental question for athletes involved in NIL deals.

Do you agree to cash compensation, or free products or services?

UCLA QB Chase Griffin on NIL: ‘Personally, I do zero product deals’

To be clear, Griffin passed no judgment on Stroud, Jurkovec or any other athlete who has agreed to an NIL deal involving the lease of a luxury vehicle. “There’s nothing wrong with that,” he said.

But if you talk to Griffin for more than a few minutes, you’ll likely hear words and phrases such as equity and generational wealth.

“Personally, I do zero product deals,” he said. “I only do cash deals and I really do that because all of my NIL money is invested. I can’t invest a product. There’s that, but one thing for the kids that receive a lot of the product deals, that is taxable once you reach a certain amount so I just want student-athletes [to know that].”

When asked about the most recent tax season, Griffin said he filed an extension. He joked about the ups and downs of the stock market and how that might affect his tax filing. The rising redshirt junior’s cash-only approach to NIL is what allows him to try to laugh off potential capital losses. Receive cash rather than free products, the thinking goes, then invest it and hopefully reap the dividends later.

NIL deals that provide equity as compensation offer the same value, only cutting out a step or two in the middle.

To borrow a quote from one of Iowa State’s NIL workshops, “You can’t eat Nikes.”

“That’s how you build generational wealth,” Griffin said.

Hunter Dickinson on deal with breakfast spot: ‘I just need the food’

Free products or services — often referred to as in-kind payments — are a staple of the true NIL market (compared to the often-rumored but hard-to-prove inducements that are Trojan Horse’d through the system under the guise of NIL).

There have been NIL deals where the compensation was free hydration packets, energy gummies, sports drinks or sparkling water. Some have involved protein powder or supplements. Athletes have received pairs of shoes and shoe insoles, headphones and hats, underwear and clothes.

“What I wear is my deals,” said Norfolk State football player and track and field athlete Rayquan Smith, who has been dubbed the “King of NIL.” “I’m wearing my deals, so it’s not hard to make content.”

NIL compensation has taken the form of beauty products and laser hair removal.

And of course, there are free meals, thanks to NIL.

Lots of free meals.

Hunter Dickinson, a rising junior at Michigan who told On3, “I think NIL played a factor with all of us [All-American big men who returned to school],” has a deal with The Jagged Fork. It’s a popular breakfast spot in Ann Arbor.

Dickinson said he has an earnings goal for next season, which is why he’s nearing a deal with a marketing agent and why he’s excited about the foundation of the Champions Circle collective. He obviously won’t reach that financial goal through plates of bacon and eggs alone, but for his partnership with The Jagged Fork, the free meals are the biggest selling point.

“They give me a little bit of money,” Dickinson said, “but I’m like, ‘Man, I don’t even really want the money, I just need the food.'”

PlayBooked co-founder Chloe Mitchell: ‘It’s really easy to be starstruck by Jordans, makeup, hair products’

Aquinas College volleyball player Chloe Mitchell has been a paid influencer longer than her peers who compete at the NCAA level thanks to the NAIA’s 2020 rule change regarding NIL. She knows the allure of free products that many college athletes experienced in the last 12 months.

“When you’re starting to get into the influencer space, it’s really easy to be starstruck by Jordans, makeup, hair products,” Mitchell said. “I mean for me, bags. Are you kidding me? I love bags. But at the end of the day, a bag is only going to give you so much.

“When people want to give you free stuff, you can say, ‘I’ll take the free items and I might be able to post about it but if I don’t like them, I’m not going to post about them.’ One, because that’s disingenuous and, two, because I’m worth something and really promoting your products that didn’t cost you a dime to give me isn’t fair to me. You’ve got to learn to say that and get comfortable with that statement.”

Similarly, Florida national champion gymnast Trinity Thomas noted that the value of free products often isn’t commensurate with an athlete’s market value or the work required. “[Make] sure, again, that you’re being paid or compensated accurately to who you are, what you do and what you’re providing for them,” she said.

Duke cross country and track and field athlete Emily Cole said she’s earned thousands of additional dollars by countering companies’ initial offers. “Being like, ‘Actually, I’m sorry. No, my rates are this,'” she said. “Then they’ll be like, ‘OK, why don’t we do this?’

“Just because I pushed back a little bit, it’s $3,000 extra, which is a lot.”

Florida’s Trinity Thomas: ‘You can use that money to buy whatever you want’ from NIL cash

Griffin, the UCLA quarterback, isn’t alone in his cash-first approach.

“I do mostly paid deals,” said Thomas. “I definitely think that’s just a little bit easier because then you can use that money to buy whatever you want.”

Cole added, “There are so many small businesses that are really trying to get started. But aside from the ones I’m really passionate about and are really in my niche, I definitely don’t do anything for product. I’m only doing promotional posts with [cash] compensation.”

Cole and Thomas each agreed to a deal with H&R Block, which included tax services in the compensation package. There’s a case to be made that the most valuable in-kind compensation could be practical products or services related to tax guidance, housing or phones, which an athlete would likely spend money on anyway.

Speakers at the NIL Summit encouraged the athletes in attendance to ask for cash compensation or even equity when arranging their deals. But for many athletes, the brand name or utility of certain products will still be alluring as potential compensation.

“Now that I think about it, I feel like money is better than products,” said DePaul guard Jalen Terry. “In certain situations, some things are one of a kind, one of one. Things like that, I would love to have.”