Wealthy college sports fans across the US are racing to set up organizations that can channel money to student athletes in the wake of a Supreme Court ruling last year letting amateur players receive compensation.
Supporters of Penn State University, including the son of famed coach Joe Paterno, have set up multiple funds, known as collectives. Donors paying as little as a few dollars a month get varying degrees of access to athletes, from online get-togethers to private events, with most of the proceeds going to players.
“If a school does not have a collective with a mission to benefit that school, it’s behind,”said Darren Heitner, a sports attorney in Fort Lauderdale, Florida.
The collectives are part of a wave of change sweeping college athletics since the high court ruling. In all, more than 60 such groups have formed in the past year, according to a tally by the Business of College Sports, and that’s raising concerns at the National Collegiate Athletic Association, which announced new rules last week to limit their activities.
Athletic departments have long courted prospects with top-of-the-line gyms and athletic centers. But so-called NIL collectives (standing for name, image and likeness) pay athletes directly in cash for services, like signing autographs, an unprecedented change for college sports. Offensive linemen on scholarship at the University of Texas at Austin stand to earn as much as $50,000 a year through Horns with Heart, one of that school’s funds. That’s a big lure for an 18-year-old choosing his or her college.
Eager boosters all over the country are forming groups. One collective at the University of Florida has raised over $5 million. Another at the University of Tennessee aims to generate $25 million each year, according to the Athletic. The website reported in March that one student clinched an $8 million deal.
The race has been on since last June, when the Supreme Court made its decision and the NCAA rescinded century-old prohibitions on athletes signing marketing deals. From the outset, the association’s new NIL policy banned using such deals as “inducements” for students to enroll at a particular school. It also required that students perform a service, such as a social media post, in return for pay.
Yet the collectives are already testing the limits with offers to top recruits and transfers, and raising the possibility that donors will get their schools in legal trouble, as so many have in the past through interference in recruiting.
In a bid to rein in the collectives, the NCAA issued new guidance to member schools last week, explicitly barring boosters from talking with recruits and requiring that NIL deals be based on an “independent” analysis of their value.
The statement was “just more of a reminder to everyone of the current NCAA rules that exist regarding booster involvement in the recruiting process,” said Mit Winter, an attorney in Kansas City, Missouri, who specializes in NIL law.