House vs. NCAA

[orientalnc]

nm

 

[roadkill]

In case people didn't find the article

Bill in Congress would bar using student fees for athletics

A bill to regulate college sports introduced in the House on Thursday would offer limited antitrust protection for the NCAA, while barring schools from using student fees to pay for college athletic programs.

www.espn.com

"The bill includes the three elements the NCAA has lobbied for: antitrust protections, pre-emption of state laws that regulate name, image, likeness payments, and a section that prevents athletes from becoming employees of their schools.

The bill's main goal is to set national standards for NIL payments that are dominating the industry in the wake of the approval of a $2.78 billion lawsuit settlement that allows schools to pay athletes.

It also includes a section that purports to protect Olympic programs that some see as threatened because of increased funding that will go to football and basketball. That part calls on schools with at least one coach who earns more than $250,000 to offer at least 16 sports programs. That language mirrors a rule already in effect for NCAA's top-tier FBS schools."

It doesn't include anything that would set up a premier league or super conference, which makes me think that this would make it harder to get relegation and the plans that private equity consortiums were proposing

My take on the bill is that it appears to have several broad goals:

• Codifying into law several aspects of the House decision, including the NIL Clearinghouse. This would help mitigate future litigation and bring some stability to the current chaos.
• Reinforce competitive parity concepts via guard rails on athlete compensation.
• Reinforce the “student” aspect of college sports with eligibility requirements and more restrictive transfer allowances.
• Reduce exploitation of student-athletes through various school and agent requirements.

Tangentially related to this bill is the fallout from the recently implemented Clearinghouse. Not surprisingly, the collectives, or at least all those that want to remain in business, are up in arms over the Clearinghouse’s dictate that all NIL deals must serve a “valid business purpose”. This requirement effectively kills almost all pre-Clearinghouse NIL deals, since everyone knows the collectives are simply a means of funneling booster money to athletes as “pay-for-play”, despite NCAA rules.

The Athletic (paywalled) has an article covering the collective issue here: Collectives and the Clearinghouse

 

[slugboy]

My take on the bill is that it appears to have several broad goals:

• Codifying into law several aspects of the House decision, including the NIL Clearinghouse. This would help mitigate future litigation and bring some stability to the current chaos.
• Reinforce competitive parity concepts via guard rails on athlete compensation.
• Reinforce the “student” aspect of college sports with eligibility requirements and more restrictive transfer allowances.
• Reduce exploitation of student-athletes through various school and agent requirements.

Tangentially related to this bill is the fallout from the recently implemented Clearinghouse. Not surprisingly, the collectives, or at least all those that want to remain in business, are up in arms over the Clearinghouse’s dictate that all NIL deals must serve a “valid business purpose”. This requirement effectively kills almost all pre-Clearinghouse NIL deals, since everyone knows the collectives are simply a means of funneling booster money to athletes as “pay-for-play”, despite NCAA rules.

The Athletic (paywalled) has an article covering the collective issue here: Collectives and the Clearinghouse

Ick! They quote Sasquatch in the Athletic article!

I’ve seen a few sources saying the NIL Clearinghouse won’t have any subpoena power. If so, bagmen and under the table payments might be coming back

 

[roadkill]

Ick! They quote Sasquatch in the Athletic article!

I’ve seen a few sources saying the NIL Clearinghouse won’t have any subpoena power. If so, bagmen and under the table payments might be coming back

Oops I forgot to warn you about the Sasquatch quote!

I recall reading (forgot where) that the Clearinghouse will indeed have subpoena power. This was a key differentiator between it and the NCAA's enforcement division. I could be mistaken about this, though.

 

[slugboy]

Oops I forgot to warn you about the Sasquatch quote!

I recall reading (forgot where) that the Clearinghouse will indeed have subpoena power. This was a key differentiator between it and the NCAA's enforcement division. I could be mistaken about this, though.

I’m sure some used car dealers are lobbying against subpoenas in Alabama, Mississippi, and other spots now.

 

[orientalnc]

After reading this I called my UNC lawyer friend. His take is that collectives don't have a business purpose other than promoting the teams at a specific university. That is/was never the purpose of the "valid business purpose" clause in the settlement. If a car dealership in Athens wants to pay Gunner Stockton to appear in ads for their dealership, the amount paid needs to resemble the amounts paid to other recognizable people who appear in ads for dealerships in Athens. You can't pay Gunner $100K to be on camera for a few seconds unless that is the going rate in town. Paying him similar to what you paid other uga athletes won't cut it.

House attorneys slam NCAA and power conferences over denied NIL deals, issue legal warning about settlement

The new college sports NIL process is already facing considerable problems.

sports.yahoo.com

 

[roadkill]

After reading this I called my UNC lawyer friend. His take is that collectives don't have a business purpose other than promoting the teams at a specific university. That is/was never the purpose of the "valid business purpose" clause in the settlement. If a car dealership in Athens wants to pay Gunner Stockton to appear in ads for their dealership, the amount paid needs to resemble the amounts paid to other recognizable people who appear in ads for dealerships in Athens. You can't pay Gunner $100K to be on camera for a few seconds unless that is the going rate in town. Paying him similar to what you paid other uga athletes won't cut it.

House attorneys slam NCAA and power conferences over denied NIL deals, issue legal warning about settlement

The new college sports NIL process is already facing considerable problems.

sports.yahoo.com

It will be interesting to see where all this lands. The last paragraph of the article, quoted below, seemingly contradicts what I read in the recent Athletic piece, which implied that the CSC was rejecting nearly everything. It also seems to undermine the plaintiff's attorney's issue with the CSC.

"As of Thursday, about 80 of more than 2,000 submitted deals have not been cleared, with several more denials expected this week based on the commission’s latest guidance. More than 1,500 deals have been approved."

 

[orientalnc]

It will be interesting to see where all this lands. The last paragraph of the article, quoted below, seemingly contradicts what I read in the recent Athletic piece, which implied that the CSC was rejecting nearly everything. It also seems to undermine the plaintiff's attorney's issue with the CSC.

"As of Thursday, about 80 of more than 2,000 submitted deals have not been cleared, with several more denials expected this week based on the commission’s latest guidance. More than 1,500 deals have been approved."

I read that quote as saying no decision has been made on 2000 NIL deals.

 

[roadkill]

I read that quote as saying no decision has been made on 2000 NIL deals.

I can see the quote being read that way if not for the "about 80 of" phrase. Either way, the last sentence clearly states that many deals have been approved.

 

[orientalnc]

I can see the quote being read that way if not for the "about 80 of" phrase. Either way, the last sentence clearly states that many deals have been approved.

Agreed, but I am hearing those are not deals with collectives. Some schools are shutting down their collective to funnel the donations to the athletic department.

 

[roadkill]

Agreed, but I am hearing those are not deals with collectives. Some schools are shutting down their collective to funnel the donations to the athletic department.

Good point

 

[Northeast Stinger]

After reading this I called my UNC lawyer friend. His take is that collectives don't have a business purpose other than promoting the teams at a specific university. That is/was never the purpose of the "valid business purpose" clause in the settlement. If a car dealership in Athens wants to pay Gunner Stockton to appear in ads for their dealership, the amount paid needs to resemble the amounts paid to other recognizable people who appear in ads for dealerships in Athens. You can't pay Gunner $100K to be on camera for a few seconds unless that is the going rate in town. Paying him similar to what you paid other uga athletes won't cut it.

House attorneys slam NCAA and power conferences over denied NIL deals, issue legal warning about settlement

The new college sports NIL process is already facing considerable problems.

sports.yahoo.com

Agree with you in principle but it seems that, generally speaking, spokespeople for a company have different going rates. If I get an actor from the local summer stock theater to promote my company it won’t cost me near as much as hiring Tom Hanks would. The car dealers will argue that getting Gunner Stockton to hawk their Chevy truck is worth every penny. I agree with you this is a slippery slope at best and tailor made for fraud. How this is going to be regulated is the devil in the details.

 

[roadkill]

Agree with you in principle but it seems that, generally speaking, spokespeople for a company have different going rates. If I get an actor from the local summer stock theater to promote my company it won’t cost me near as much as hiring Tom Hanks would. The car dealers will argue that getting Gunner Stockton to hawk their Chevy truck is worth every penny. I agree with you this is a slippery slope at best and tailor made for fraud. How this is going to be regulated is the devil in the details.

I believe there will be allowances for local businesses to pay athletes to hawk their products or business. The problem for the collectives is that most of them weren't getting any tangible marketing benefit from the NIL deals - they were simply a third-party payment system.

 

[orientalnc]

Agree with you in principle but it seems that, generally speaking, spokespeople for a company have different going rates. If I get an actor from the local summer stock theater to promote my company it won’t cost me near as much as hiring Tom Hanks would. The car dealers will argue that getting Gunner Stockton to hawk their Chevy truck is worth every penny. I agree with you this is a slippery slope at best and tailor made for fraud. How this is going to be regulated is the devil in the details.

You are correct that companies might have very different ideas about how much Gunner Stockton's placement in an ad is worth to their business, but it's for a legit business purpose. Car dealerships advertise like crazy. But, if Trucks Are Us is getting uga players for $500 and Dawg Trucks downtown is paying $10,000, I think the collective is going say no to that deal. What I fear is that the uga collective goes to Dawg Trucks an gives them a big bag of cash if they will hire Gunner to do an ad and pay him $10,000. I don't know how you police that type of cheating. I actually think a bigger issue is that the Auburn collective comes to Gunner and offers him a big bag to come to Auburn, AL, play QB for a college nearby, and do ads for Tiger Trucks.

Do I think teams will cheat? Absolutely. I think the only way to stop it is for a team like uga or Ohio State to get a one or two year death penalty. Certainly there will be screaming and yelling. Also lawsuits. But the cheating will continue as long as the cost of getting caught is manageable.

 

[Northeast Stinger]

You are correct that companies might have very different ideas about how much Gunner Stockton's placement in an ad is worth to their business, but it's for a legit business purpose. Car dealerships advertise like crazy. But, if Trucks Are Us is getting uga players for $500 and Dawg Trucks downtown is paying $10,000, I think the collective is going say no to that deal. What I fear is that the uga collective goes to Dawg Trucks an gives them a big bag of cash if they will hire Gunner to do an ad and pay him $10,000. I don't know how you police that type of cheating. I actually think a bigger issue is that the Auburn collective comes to Gunner and offers him a big bag to come to Auburn, AL, play QB for a college nearby, and do ads for Tiger Trucks.

Do I think teams will cheat? Absolutely. I think the only way to stop it is for a team like uga or Ohio State to get a one or two year death penalty. Certainly there will be screaming and yelling. Also lawsuits. But the cheating will continue as long as the cost of getting caught is manageable.

Interesting, now that I think about it, cheating by the top teams has always been a manageable expense. At the end of the 30 for 30 documentary on “The Pony Express” they show all the teams that got caught after the SMU death penalty. I don’t remember it hurting any of those big programs like Alabama.

So, yeah, a death penalty might be in order.

 

[roadkill]

There’s always been, and always will be, cheating in college sports. 222-0 came about because of a rival’s cheating. SMU’s death penalty only taught the factories to be more discreet about it.

I may be naïve to think this, but I view the House $20+M rev share as a step toward more competitive parity despite the cheating. It means the factories won’t be competing for recruits based on bags of cash or $100 handshakes, but instead it will require serious money that will be much more difficult to hide.
$20M in payments have become table stakes. It’s also an opportunity for well-funded but underperforming schools like Texas Tech to raise themselves out of poverty. If GT manages its way through this new era well, we will come out ahead of where we were. And we seem to be hiring the right people to do it.

 

[billga99]

Interesting, now that I think about it, cheating by the top teams has always been a manageable expense. At the end of the 30 for 30 documentary on “The Pony Express” they show all the teams that got caught after the SMU death penalty. I don’t remember it hurting any of those big programs like Alabama.

So, yeah, a death penalty might be in order.

I don't think there will ever be another death penalty. SMU was down forever. I do think a 2 or 3 year exclusion from the playoffs would be short of the death penalty but very detrimental. Think about a 3 year ban from the playoffs and how many players would transfer based on that penalty.

 

[SOWEGA Jacket]

No one is ever going to be severely punished again. There is no incentive to do so anymore. SMU was hammered because they were the outsider using insider tactics without the consent from the insiders. So the insiders had their boys at the NCAA make an example.

In today’s world everyone is an insider because all that matters are TV numbers. No one will get hammered. That’s why Saban and Kirby don’t like the new system. They can no longer influence teams like GT getting put on probation. The 2 key factors in the SEC dominance are now gone- 1) under the table money and 2) NCAA influence. That’s why I love this new era. It ain’t perfect but it’s way better than the rigged past and that’s why Kirby hates it.

 

[orientalnc]

SMU was hammered because they were the outsider using insider tactics without the consent from the insiders.

I suggest reading some history of SMU football. They were a national power prior to getting "hammered" by the NCAA. While not a charter member of the Southwest Conference, they joined in 1918 and were still a member when they got the "death penalty" for repeated football recruiting violations. They were definitely one of the insiders of college football. A current analogy would be if FSU or Miami got the death penalty now. While not the best team in the country, SMU was winning 9-10 games almost every year.

 

[Northeast Stinger]

I suggest reading some history of SMU football. They were a national power prior to getting "hammered" by the NCAA. While not a charter member of the Southwest Conference, they joined in 1918 and were still a member when they got the "death penalty" for repeated football recruiting violations. They were definitely one of the insiders of college football. A current analogy would be if FSU or Miami got the death penalty now. While not the best team in the country, SMU was winning 9-10 games almost every year.

I’m not sure his point is that off base. SMU was losing the arms race, and, most critically, was losing top recruits from Texas that were going to other Southwest Conference teams. The Southwest Conference was the strongest conference in the land at that time and SMU was slipping further and further behind the other members. The decision to do something about it caught Texas in particular by surprise. Other members were chagrined that SMU had caught onto the game.

Where I would, at the same time, slightly disagree with the previous post was that this was not simply a case of the insiders colluding to turn SMU over to the NCAA. The truth is the NCAA was looking for ways to let SMU off the hook but SMU was openly defying the NCAA even after they had gotten a light slap on the wrist. Had SMU been more discreet they might still be getting away with it. But the NCAA was being exposed in broad daylight, so to speak, and was forced to take action.