Tennessee-driven Spyre Sports to launch NIL collective trade association

Amidst uncertainty on the future of college sports and questions surrounding the sustainability of NIL collectives, Spyre Sports is setting the framework to provide a unified voice.

The Tennessee-driven sports marketing agency will be launching an NIL collective trade association in the coming weeks, multiple sources have confirmed with On3. Led by Hunter Baddour and James Clawson, Spyre has emerged as one of the leading voices in the collective space since the inception of NIL.

Managing the two Tennessee-driven NIL collectives Volunteer Club and Volunteer Legacy, the group has facilitated more than $13.5 million in deals for Tennessee athletes. The group caught the nation’s attention in spring 2022 when The Athletic reported a five-star quarterback – Nico Iamaleava – signed an $8 million deal over three years with the collective.

While Spyre will be the founding member of the association, plans are already in place to grow. Baddour and Clawson led a group of collectives to Capitol Hill last week, which included representatives from Clemson, Georgia, Ole Miss and Washington. There’s no indication on who else will join yet.

“This isn’t about us necessarily, it’s about the student-athletes and about the collective voice getting a seat at the table,” Clawson told On3 in a phone interview. “We’ve obviously, from day one, hit the ground running with our background and our experience. People are looking for someone to lead this. We were up for the challenge. It’s going to be a collective effort from a lot of different people doing a lot of different things, but we’re happy to get it started.”

The trade association will be founded on three pillars: To serve as a voice for athletes and their best interests, provide a forum for collectives to discuss current NIL issues and share best practices, and provide a unified voice for collectives to leverage their position.

Much of the legislation introduced dealing with college athletics and NIL over the last four years has done little to protect athletes’ rights and the future of collectives. The hope is starting an association will give collectives the power and leverage to have a seat at the table, specifically when dealing with NCAA President Charlie Baker and Congress. Spyre believes there is a role for collectives to play in the next iteration of college sports.

Over the first 23 months of the NIL era, collectives have popped up across the country. The donor-led organizations are competing to raise the most funds to attract high school recruits and retain athletes looking at the transfer portal. But they’re also working together to discuss best practices. The association would provide a meeting place.

Disconnect between Power 5 and college athletics

In the eyes of Spyre and many collectives across the Power 5 landscape, Congress and the NCAA have not gone to the necessary lengths to hear from football and basketball players on what role they want in college sports.

NIL has given athletes the possibility to turn a profit, but they’ve been forced to navigate an unprecedented landscape. The U.S. House’s Innovation, Data and Commerce subcommittee hearing in March on NIL was missing a current Division I basketball or football player.

“How do we move forward and operate when you’re trying to serve schools at the very top of the mountain that are bringing in just tremendous amounts of money from from playing football and basketball, to schools that can even fund their program?” Clawson said. “So, how do you address that? You can find opinions on everything. But I’ve not seen anything convey the feelings of the elite players at Power 5 schools in major sports. And I think to me, that’s the voice that’s missing.”

Collectives have emerged as the one-stop shop for most athletes’ NIL activity. The organizations have become the leading spender in most college markets. Athletes are in constant communication with their collective leaders, too, finding out what they need to do to promote the organization on social media or what events are coming up on the schedule.

Clawson said next to coaching staffs, collectives are arguably the closest to athletes. The trade association plans to make promoting the voice of the athlete a major part of its mission.

“I think nobody is closer to the ground and working with athletes on a day-to-day basis than collectives. We obviously compensate them,” he said. “We have them do things for us, we hear a lot of the struggles that they have. And we hear them when they talk about a lot of things in their life going on. We’re just kind of as close to them as really any group maybe outside of their coaches.

“If you want to know how NIL really works, collectives know. And they because they know the good, the bad and the ugly.”

NIL collective association provides education

In a 12-page memo released from the office of the IRS Chief Counsel on Friday, the revenue service believes donations made to nonprofit NIL collectives are not tax-exempt. Accepting tax-deductible donations can make a significant difference when dealing with top-level donors, who would prefer to write off any contributions come tax season.

Some of the most aggressive collectives have applied and been deemed as 501(c)(3) organizations by the IRS. That does not mean, however, that the IRS has to sign off on their activity. 

Friday’s news has sent shockwaves through NIL collective circles. Some have made the decision to put nonprofit operations on hold, while others have decided to continue with day-to-day operations until the IRS makes a move.

The NIL collective trade association is already working to help other organizations.

Spyre consulted with their attorneys and is in the process of finding out what the best course of action is. In a landscape where nobody is an expert, collectives have discovered just how reliant they need to be on each other.

“I think it only makes us better to share information, either share what we’re hearing or what they’re hearing,” Clawson said. “Work together to get to a place where if there is a model for a 501(c)(3) collective to exist and do it the right way, what is that model? How do we get to it? And if we find it, how we can we implement it across a lot of different schools, so we can do this the best way and the most compliant and legal way.”