Financial Realities - Some Programs Have HUGE $$
- Thread starter lion1983
- Start date
Bottom line - not sustainable for a majority of college programs. In the end, only the Bluebloods may be able to survive. The rest may revert to club sports type structure to revive college sports as it was known 40 years ago.
So Michigan is going to have a $10 million roster. But if the House settlement is completed, then schools will have only $20 million to work with for all sports. It's hard to envision basketball having anywhere near $10 million. So I assume that these deals will go forward, but that there will be no more of this assuming (maybe a big assumption) that the settlement's prohibition of deals between athletes and boosters that don't have a business purpose proves effective.
You sound insane right now. You think they would be putting games on CBS, NBC and FOX without an actual contract in place? It’s simple as that.
Do you think he's just trying to remind us that the contract went into effect in 2023 and not in 2024?
https://www.espn.com/college-footba...-7-billion-media-rights-agreement-fox-cbs-nbc
I’ve sourced that to him before, but he consistently claims it’s not real because the full contract is not public info.
NIL still exists, on top of revenue sharing.
So ... for RU, the information suggests $3 mill from revenue sharing for hoops, and another $1.5 to $2 million from NIL.
I presume most P4 football rograms will take at least 75% of the %20.5 million allowed for revenue sharing - and hoops gets 15%-ish. So ... for a P4 team allocating $3 million to $ million to hoops, but spending $10 million, they'd fill in the remaining $6 to $7 million from NIL.
Indications are the NIL will be treated differently AFTER the revenue sharing gets formally approved: I think NIL would have to be for actual value of services offered byNIL sponsors, with Deloitte formally evaluating the value - and the $$ would be much more transparent. Hence, lots of media chatter that schools are throwing huge and indiscriminate amounts of NIL NOW, before the transparency and the Deloitte review is in place ... inferring the NIL $$ spent on players may DECLINE in the next off season.
Hasn't this been the "end result" for 30 years now?
Yet near zero teams are actually reverting their sports.
It's actually the opposite and they keep moving up?
Didn't Monmouth just announce they were moving their sports up?
This…
The house settlement does not mean NIL goes away. The programs with huge NIL are still going to flex their NIL and get deals for their kids
I think the assumption is "Congress says $X to be allocated" but thereafter you can add anything you want on top and call it what you like. I have doubts courts will allow such caps absent an act of Congress that creates some type of antitrust and/or employment exemption. As of now, it seems as though Congress is setting the floor but the ceiling is wide open. That open-endedness may kill of non-revenue sports and perhaps some will take out the revenue generating sports because the "add-ons" needed won't be feasible. However, if that returns it to collegiate athletics of 40 years ago is that necessarily a bad thing?
I'm not sure I understand what you're saying. The deal says that schools can make annual payments to athletes up to a cap. These payments are formally for NIL, but they amount to revenue sharing. Players can continue to make additional NIL deals with third parties -- those other than schools. But NIL deals with boosters -- (in the settlement's words) " entities and individuals closely affiliated with the schools," are allowed only if they have a valid business purpose -- that is, the player has to be giving something of equivalent value to the booster. The deal can't be, in effect, pay to play.
If enforced, that is going to be a tremendous curb on the kind of NIL deals we are now seeing; there is no way that those kids at Michigan can be said to be giving a million dollars of value to those who are paying them.
Judge Wilken is about to approve all of this, assuming that the NCAA agrees to phase in roster limits, as a settlement of the athletes' antitrust suit. The NCAA and those who brought suit know that the deal does not bar someone else (or the government) from bringing an antitrust suit of their own. As I understand it, the settlement says just that. But it seems unlikely that the Trump Administration is going to bring such a lawsuit, and it may be that no athlete feels sufficiently outraged by the settlement to bring a lawsuit.
Ideally, Congress would, as you say, write the settlement into law to bar additional lawsuits. But that isn't necessary so long as neither the government or another athlete overturns the settlement through another lawsuit.
Edit: the cap is a restraint on trade because it limits the deals that schools can make with athletes. But most restraints on trade are legal so long as they are 'reasonable." So anyone bringing suit would have to show that the entire settlement scheme, including the cap, is "unreasonable." That is not an easy (or cheap) thing to prove. The Biden Administration did argue in its final days that the cap wasn't reasonable; but I can't see the Trump Administration challenging it.
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Your "indications" paragraph is entirely correct. NIL payments by boosters will have to be for actual value. As I said in my response to @rucoe89, that will be a tremendous curb on the kind of NIL deals that the Michigan players, for instance, are getting.
"Valid business purpose" is going to be relative and comparable to other similar NIL deals.
Once the first $3m NIL deal is determined valid, every other one will be valid.
What is the basis going to be for a deal to be turned down?
They can't just say "We disagree. Fans think it's outrageous."
They'll need to justify and defend it.
An argument could be made "I participate in a sport seen by millions of people and that generates billions of dollars" to justify a seemingly "outrageous" valuation.
Can’t wait for the local Bama strip club to offer NIL for appearances from star players complete with free use of the champagne room, high priced escort and bottle service for their time.
Those guys will be raking in the cash and STDs rather quickly.
The basis is going to be, "if you're paying the kid $1 million, show us how what he is doing in return for you is worth $1 million to your business." For instance, an agreement by the kid to participate in a few autograph sessions is not worth $1 million. It may not work, but it's not as clearly unworkable as you suggest.
Correct - most especially not, for instance, for some random center or PG transferring in to a program. We don’t know how this will work, but I’m hoping Deloitte will start to establish precedent that the kind of value your describing can’t even be entertained without establishing history of a relationship with the fan base those autographs would market to. With a transfer - your fans can’t know if they are getting Cam Spencer or PJ Hayes. The value being sold has to be about the past. Geo and Caleb’s autographs would’ve had some value to our fans going into their senior years even if they ultimately suffered season ending injuries. Hopefully the new rules will in a weird way end up stabilizing the transfer market.
"Here you go. Now you prove our valuation is wrong. And why."
I'm just skeptical they are implementing this entire process that is going to radically change the new system.
Especially when there is no precedent or comparables to lower the valuations.
Imagine coaches had to justify their NIL.
Whats the justificstion for the Court Club to pay Rutgers staff for appearances?
"Well that's what they were already being paid. How can we lower the valuation when that was the set valuation already.l?"
Note: a system that is being paid by who? Where is Deloitte sending their monthly invoices?
"Here you go. Now you prove our valuation is wrong. And why."
I'm just skeptical they are implementing this entire process that is going to radically change the new system.
Especially when there is no precedent or comparables to lower the valuations.
Imagine coaches had to justify their NIL.
Whats the justificstion for the Court Club to pay Rutgers staff for appearances?
"Well that's what they were already being paid. How can we lower the valuation when that was the set valuation already.l?"
Note: a system that is being paid by who? Where is Deloitte sending their monthly invoices?
The NCAA is going to be paying Deloitte. Let me quote what the NCAA says about its committee of athletics directors:
"The committee has also been working closely with Deloitte to create a system to track and evaluate all Division I student-athletes' third-party NIL deals valued at $600 or more, which would be required to be reported under the proposed settlement. The new enforcement entity will use the system to help it evaluate whether these deals are within a reasonable range of compensation and made with the purpose of using a student-athlete's NIL to advance a valid business purpose, as outlined in the proposed settlement."
The question it will be asking is fairly straightforward: Is the amount of money being paid to the athlete in reasonable proportion to what the athlete is doing in return? Of course there will be border line cases, but paying kids $1 million for doing virtually nothing in return, as at Michigan, will be a thing of the past.https://www.ncaa.org/news/2025/3/12...oward-implementation-of-house-settlement.aspx
Edit: Let me add that the NIL restrictions in the settlement agreement were not imposed on the NCAA against its will. The original settlement agreement between the NCAA and the athletes was even more restrictive of NIL deals, but Judge Wilken said they went too far. I think we can expect the NCAA to go back to court to ask Judge Wilken to tighten the limits if they prove unenforceable.
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What about attending birthday parties for ultra high net worth individuals?
Tough to justify value to a non person (a company), but how can you put a value on attending a birthday party or playing golf.
I think schools can be very creative and get athletes paid $1,000,000. It won't be as easy as it used to be and the athletes may need to spend a lot of time in the offseason to get paid.
You can look at comps for someone paying a minor celebrity for playing golf with him or going to a birthday party. Dodging this is not going to be that easy.
But the value depends on the specific person.
Who is worth more attending your birthday party - Rutgers alum and legend Brian Leonard or any random active FL player?
Just the status as "Michigan QB" in Michigan has more value than "Tampa Bay Bucs Starting QB" in Michigan.
Not sure how you find any comps as I wouldn't think these things are always public.
What if the athletes create cryptocurrencies? Is there anything against that.
If someone writes a check of $100,000 to Jeremiah Williams to attend a wealthy kid's bar mitzvah how can Deloitte say the player isn't worth that?
A 93 year old guy with cancer and $36,000,000 wants to pay $1,000,000 to Emanuel Ogobole to hang out with him for a few days as he is dying. How can Deloitte come in and say sorry he isn't worth that.
The price is where supply meets demand. Supply in certain instances could be 1.
A 93 year old guy with cancer and $36,000,000 wants to pay $1,000,000 to Emanuel Ogobole to hang out with him for a few days as he is dying. How can Deloitte come in and say sorry he isn't worth that.
The price is where supply meets demand. Supply in certain instances could be 1.
I don't see any problem with creating NFTs the way our President has, but the booster can't pay more than anyone else does. Anyway, we'll have to see how well this works.
You’d be surprised at how easy it is to create valuation models for all these things. There will be a lot of gray area especially at the start but it’s not like they can’t put a market price on things.
I am not exactly sure how that stuff works. Can people pay for "new issue"?
Can individuals really pay the president via his memcoin like people say or alledge he is?
valuation models aren't always accurate. A lot of valuation models might say the S&P 500 should be at 4,000, but it is not.
Odd using a stock index as your counterpoint since the stock markets are driven by speculation and NIL is not. Deloitte will be able to pull data from many pieces of information regarding appearance fees and other relevant things that athletes can earn NIL on to come up with valuation ranges. This won’t be some lick my finger and see which way the wind is blowing type thing.
Both can be knocked out on the grounds that there's no business purpose, much less a valid one.
I'm not saying this is guaranteed to work; but I think it at least has a chance.
Does it have to be a business purpose? Doesn't just offering something of value work.
Why is it odd? Isn't a player's NIL driven by speculation?
I will say it’s a little amusing seeing this discussion among college athletics fans - who spend thousands above “market value” to attend games.
(Ticket face value = market value?)
“It’s my money. It’s worth it to me to pay above market value to experience something that has specific value to me. It doesn’t matter is someone else thinks it’s not as valuable.”
Not seeing how the same won’t be applied to player experiences, interactions or collaborations.
Deloitte is going to say “Sorry. Dylan Grant attending an event is only worth $50,000. You’re not allowed to pay him $100,00. If this wasn’t a Rutgers event, he wouldn’t be as valuable.”
Nearly every players specific value will be very specific to team, location and place.
They better have solid justification.
(Ticket face value = market value?)
“It’s my money. It’s worth it to me to pay above market value to experience something that has specific value to me. It doesn’t matter is someone else thinks it’s not as valuable.”
Not seeing how the same won’t be applied to player experiences, interactions or collaborations.
Deloitte is going to say “Sorry. Dylan Grant attending an event is only worth $50,000. You’re not allowed to pay him $100,00. If this wasn’t a Rutgers event, he wouldn’t be as valuable.”
Nearly every players specific value will be very specific to team, location and place.
They better have solid justification.
Eventually the way I'm seeing the public talk about student loans and the people that owe them. I expect most government funding for universities to be cut. Eventually it will only be the ivies, big time football schools, community college and trade schools. Bringing back manufacturing jobs to America so there will be plenty of options for those that can't get into the universities that are left .
Are they going to factor in what High School and home town people went to?
“I don’t care that Dylan Grant is the most valuable player overall. Bryce Dortch went to my high school and hometown. He’s more valuable to my local deli for an advertisement than Grant.”
Is that going to be factored into the valuation models?
“I don’t care that Dylan Grant is the most valuable player overall. Bryce Dortch went to my high school and hometown. He’s more valuable to my local deli for an advertisement than Grant.”
Is that going to be factored into the valuation models?
There is a saying among statisticians: "all models are wrong, some are useful."
https://jamesclear.com/all-models-are-wrong
My understanding is that the words 'valid business purpose" are in the settlement agreement.https://www.bradley.com/insights/pu...d-bring-significant-changes-to-college-sports
