The Collective Association begins conversations on revenue-sharing model

On3 imageby:Pete Nakos07/26/23

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When seven NIL entities announced plans earlier this month for The Collective Association, the hope was to share intel amongst themselves and lobby the NCAA for NIL reform.

While the NCAA and Congress continue to push out NIL bills left and right ahead of the August recess, TCA knew they wanted to put forth a revenue-sharing model. While not fully concrete, the plan has started to catch some attention. The TCA presented the pitch to the NCAA and SEC in separate meetings last week.

Explained to On3 by Spyre Sports Group‘s Hunter Baddour and Classic City CEO Matt Hibbs, the plan reflects the interests of all seven NIL collectives. Along with Tennessee and Georgia, entities from Ole Miss, Florida State, USC, Michigan and Penn State are founding members of the association.

As Hibbs put it, no numbers are locked down for TCA’s model. The thought is a portion of TV revenue should be distributed by conferences to an “official” institution collective in equal shares. For example, an SEC collective could receive $5 to $10 million annually. This could theoretically relieve pressure for boosters to constantly produce more funds, as has been the case in the last 24 months.

From there the collective distributes the money to athletes, the TCA leaders said. The third-party option would ensure athletes are not viewed as employees of schools, something TCA has made clear athletes do not want to participate in.

“I think that we’re at a place now with NIL where there’s a lot of people talking about it and not a ton of like actionable solutions,” Hibbs told On3 in a phone call on Tuesday. “I think our goal with this is not to say, ‘Hey, we have all the answers here.’ But it’s to say, ‘This is something that we need to be discussing.’ So, let’s just basically throw ourselves into the pool and have these conversations.”

The Collective Association is aware some concessions would need to be made. The NCAA has yet to truly enforce its interim NIL policy. New NCAA president Charlie Baker has made a Congressional NIL mandate a priority in his first months in office, heading to Capitol Hill multiple times to push the agenda.

Hibbs is prepared to give to push forward the NIL Era.

“In order to receive the money, we all have to agree on a certain set of rules, whatever that is, whether it’s in tampering or recruiting,” Hibbs said. “So, that’s kind of building into uniformity. And my whole thing with the NCAA has always been, there’s never a carrot, there’s never an incentive to follow rules, there’s always a penalty and a stick if you don’t. So, I think in order to begin to wrap your arms around ‘enforcement,’ you need to incentivize people to follow the rules.”

It’s an imperfect revenue share model. Hibbs acknowledged they don’t have a full grasp of how the model would need to be adjusted to conform with Title IX laws. The model could also force TV contracts to be readjusted.

It is a start, though.

The Collective Association walked away from their meetings with the NCAA and SEC with a sense of optimism. They also understand this version of NIL may not be the perfect model. Baddour expressed how the association does share some similar beliefs with Baker.

“We think there should be an agent registry and standards for agents that want to want to represent student-athletes,” he said.

TCA expansion could help revenue share model

Behind Baddour and James Clawson, Spyre has emerged as one of the leading voices in the collective space since the inception of NIL. The marketing agency led a party to Capitol Hill in June to meet with lawmakers and stakeholders. Within two weeks, Baddour and Clawson told On3 in June their plans for a collective association.

That came to fruition earlier this month. Now with seven founding members, plans are in place to expand in the future. Multiple collectives have reached out expressing interest in joining.

The expansion will only help start more conversations on revenue sharing in more conferences and athletic departments.

“If we proactively get ahead of this and start showing that we are trying to solve a problem, as opposed to just waiting to be told what to do,” Hibbs said. “I think that didn’t work out well, the last time. And it likely won’t work out great in the future.”