Collectives, seven-figure checks, and tampering: a new age of college football defined by a lack of supervision.
In the 10 months since the NCAA suspended its rules prohibiting student athletes from monetizing their name, image and likeness (NIL) through means like public appearances, autograph signings and social media promotions, a largely unregulated market for athletes’ NIL rights has exploded, particularly in college football, forcing a dramatic shift in the way players make decisions regarding their futures in the sport and the way universities approach recruiting.
Though universities cannot directly induce athletes to sign with their programs through monetary promises, there is a complicated gray area surrounding partnerships between universities and NIL “collectives” that create financial opportunities for student athletes at individual schools.
Greater funding from boosters behind these collectives makes particular schools more attractive to potential recruits or transfers, all while toeing the line of NCAA recruiting violations and pay-for-play restrictions.
But first, it’s important to understand the history behind the NIL debate in collegiate athletics. How did we get here?
The 2014 O’Bannon v. NCAA class-action antitrust lawsuit challenged the NCAA’s amateurism model and raised one basic, but important question, the ripple effect of which would come to turn college sports upside down: why can the NCAA and the universities profit from student athletes’ NIL rights, but the athletes themselves cannot?
Former UCLA basketball star Ed O’Bannon’s efforts did not yield immediate change in the NCAA’s business model, but attitudes towards athletes receiving none of the pie that is a billion-dollar industry began to change.
In 2019, the state of California passed its “Fair Pay to Play” act, which would have superseded NCAA rules and allowed student athletes in the Golden State to seek sponsorships and profit from their NIL. Other states began to follow suit, and to prevent an imbalanced playing field based on various state laws, the NCAA lifted its NIL restrictions on July 1, 2022, permitting athletes to pursue any financial opportunities within the confines set by their state and/or university.
While the intention of NIL compensation is benign and most would agree it’s a net positive for athletes to finally benefit financially from their efforts, it was impossible to predict the changes that would come to the sport.
Many people just envisioned athletes signing autographs for money and inking endorsement deals with companies that were only invested financially. However, school-specific NIL collectives have become a major player in college football, perhaps to a surprising degree.
A collective is either a non-profit organization or a for-profit LLC backed by groups of boosters to arrange NIL deals for student athletes, usually with the goal of bolstering the programs of the boosters’ school of choice. A standard model for a collective is to buy an athlete’s NIL rights entirely, promising guaranteed money to be paid out intermittently.
Then, the collective’s job is to organize enough NIL deals, like public appearances or product endorsements, in order to cover the guaranteed money in the player’s contract. The player doesn’t care if enough deals get done or not; he gets paid either way.
Unlike any other industry, NIL investors are willing for their collectives to operate at a loss in exchange for a successful football team. They are superfans that are literally buying team success through the transfer portal and susceptible high school recruits.
This was not the intended reality of NIL compensation, and athletes being lured to particular schools is a concept that was supposed to be avoided. In its release last summer, the NCAA reiterated that its tentative policy “preserves the commitment to avoid pay-for-play and improper inducements tied to choosing to attend a particular school.”
So, technically, athletes cannot sign NIL deals, even with a third party, contingent on their participation or performance for a specific program. However, the line between an illegal inducement as such and permissible activity by NIL collectives is incredibly thin.
“There are regulations in place regarding recruiting inducements and pay-for-play, but gray area certainly exists,” said Sam Weber, the Senior Director of Communications for Opendorse, an NIL marketplace that helps thousands of athletes at all levels arrange NIL opportunities.
“Ultimately athletes and buyers must be able to provide proof of quid pro quo and must be able to show that any offer made did not require enrollment in a specific school.”
While the NCAA publicly takes a stance against inducements and pay-for-play, its interim policy on NIL compensation was far from comprehensive, and the disparity between state laws regarding NIL creates further ambiguity for monitoring collectives. Worse, the NCAA has almost entirely avoided enforcing or even investigating any potential violations.
This has seemingly left collectives and athletic departments that are exploring the NIL sphere entirely unchecked: “Without the proper guardrails and boundaries to separate those two, you allow crossover, and you’ve got a lot of gray area that is being operated in right now,” said John Peterson, an NIL coordinator at the University of Cincinnati.
Horns with Heart is an NIL collective in Austin whose “Pancake Factory” program offers “every University of Texas offensive lineman totalling $50,000 in annual financing per player,” per a press release on its website.
The NIL law in the state of Texas states that “no individual, corporate entity, or other organization may use inducements of future name, image, and likeness compensation arrangement to recruit a prospective student athlete to any institution of higher education.”
Now, technically, the Pancake Factory program is specifically for scholarship offensive lineman already on the team; however, this is as close to an inducement for potential recruits or transfers as possible. These players know what they stand to be paid should they choose to play for Texas, and that definitely becomes a factor in the recruiting process.
This is not unique to Texas; it’s happening with dozens of collectives around the country.
“There's a lot of reports and inferences that [athletes] were induced to attend [certain schools], and that very well could be the case in a number of those deals,” said Brent Cunningham, Vice President of Operations at Think NIL, a collective for TCU athletes.
“There's perception and then there's the written text of the contracts, which at the end of the day, nobody's actually seen the contracts,” Cunningham said. “Without seeing exactly what’s in a contract, it’s hard to formulate a good understanding of what truly occurred between the player or the booster.”
A major factor in the NCAA’s unusually hands-off approach is that the organization has lost much of its leverage in the last few years and wishes to stay clear of legal proceedings for fear of losing even more control over college sports.
Last summer, the Supreme Court ruled 9-0 against the NCAA in NCAA vs. Alston, a case concerning education-related benefits for student athletes. This played a role in the NCAA’s decision to lift its NIL restrictions shortly after.
“The NCAA is a little bit handcuffed. They've got a lot of legal action against them. They got bitten pretty hard, so they're backing off I think now and just not as proactive in enforcing rules,” former USD and San Jose State head football coach Ron Caragher. “Especially with it coming up politically, I think the NCAA is really hesitant to enforce it or to have strict rules in any way, shape or form.’
In short, the NCAA doesn’t want to get sued again, but that doesn’t fix the NIL free-for-all in college football.
“I think a strong yet fair governing agency is very important to the health and wellness of intercollegiate athletics,” Caragher said. “The NCAA has backed down on prosecuting schools that are out of compliance. The university presidents, who the NCAA works for, definitely need to up their game and have a new and improved governing agency.”
“They 100% dropped the ball on this. Based off of litigation that's been brought against them, they’re scared to put any regulations in place that would bring them back to court. They're operating in a defense mode with everything that they do,” Cunningham said. “So yeah, [I’m] definitely critical of the NCAA and how they've handled this so far.”
Many around the sport, including the NCAA, are waiting and hoping for the federal government to draft sweeping legislation that would clear up the gray area and make the NCAA’s responsibility of enforcing recruiting infractions much simpler. Unfortunately, this is not expected to happen any time soon.
Until then, the constantly-changing landscape of college football is what it is, and programs will have to learn to adapt. There have already been reports of athletes signing multimillion dollar NIL deals.
Last month, the Athletic reported that an anonymous five-star football player in the Class of 2023 signed an NIL deal reportedly worth up to $8 million in March. Long Beach Poly quarterback Nico Iamaleava, who committed to Tennessee that same week, is widely believed to be the player behind the curtain.
While $8 million is certainly an outlier case, it’s shocking to see numbers like that being tossed around less than a year into the new era of college football.
“I’m blown away by it,” Caragher said. “It’s sped up way faster than I ever saw.”
Texas left tackle Christian Jones, who will be a part of the Pancake Factory program starting in the fall, is fully supportive of NIL compensation for college athletes but was also caught off guard by the scale of some of these deals.
“I did not [ see million dollar deals coming]. I was okay with getting a thousand dollars, like ‘man, if I could get a thousand, that’d be so crazy.’ But people are getting millions of dollars,” Jones said. “Good for [Nico].”
Time will tell what the upper limit for NIL deals will be, whether they will continue to skyrocket or if the market will eventually settle down.
“Sustainability is always the question for collectives offering multimillion dollar deals to skill position players, for example, when it takes eleven on the field in football,” said Braly Keller, an NIL specialist with Opendorse.
Opponents of NIL compensation were afraid of the sport becoming professionalized and of a select few major college football brands, like Alabama and Ohio State dominating more than they already do.
Caragher believes NIL compensation will only “widen the gap” and that non-Power 5 teams will be left behind, even to the point of some schools shutting down their football programs because of financial struggles.
However, he understands that programs have to lean into the future to keep up. “If I was still coaching, I would definitely be playing the game. You don't have to agree with the game to play the game, right? You play it, and these are the rules, so you gotta push as far as you can without breaking the rules to be competitive,” he said.
“Athletic departments are going to have to think outside the box and lean on and create relationships with people in the business world to help navigate this new world,” Peterson, who recently moved out of coaching into administration at Cincinnati, said. “We have to be nimble as an administration, and we have to be nimble as coaches, you know. Stay on top and pivot.”
Schools ahead of the curve certainly have the opportunity to improve their football programs right now in a competitive sense. “College football has long been a battle of the haves vs. have-nots for decades. NIL is another piece of that arms race just like stadiums, facilities, NFL success,” Weber said. “Ultimately, I believe NIL could jumpstart some ‘down’ programs with dedicated fan bases, but I do not believe this will widen the gap.”
“I don't see it as the disparity between the top upper echelon schools and everybody else. I don't see it as separating. I see it as it just stays the same. Right? Because everybody has this opportunity to bring NIL into the fold,” Cunningham said.
“But I do think it potentially creates opportunities for smaller schools, the schools that aren't, you know, the top 5% of Division I to actually make a big splash occasionally, right? I think it actually creates opportunity for a number of schools that typically might not have had the opportunity to kind of make a big impact here.”
It is yet to be seen whether the top end of college football will only grow stronger, or if NIL deals will attract athletes to schools they may not have otherwise chosen. Tennessee landing the No. 3 quarterback in the 2023 class is huge for a team that hasn’t been competitive in the SEC for a long time.
Some athletes of course are still landing at historic powerhouses — Pitt wide receiver Jordan Addison generated lots of animosity towards big schools with his decision to enter the transfer portal last week, possibly in favor of USC and an attractive NIL deal. Accusations of tampering only fueled that fire.
It’s unknown whether or not Lincoln Riley and the USC athletic department had anything to do with Addison’s decision, and it probably never will be, given the NCAA’s refusal to investigate such occurrences at the moment.
While there is zero evidence indicating said accusations are true, it would be a perfect example of the flaws in the current landscape and how teams can exploit that gray area.
The thing is, it doesn’t really matter what the truth is because the more consequential truth is that this is happening all over the place. Peterson has heard the current NIL picture compared to the 1920s, “when the mob was prevalent in our country.”
Everyone knew it was wrong, but they still did it.
Former USC defensive lineman Trevor Trout is unphased by the potentially shady recruiting tactics happening in the sport, and he finds everything happening now to be business as usual.
“Here’s the thing, this has happened in sports forever. We can just accept the fact that college sports are professional sports. There’s nothing unprofessional about this entire thing,” Trout said. “There’s always been tampering. Tampering has always existed. Now it’s just easier because we got the internet, we got the [transfer] portal.”
“When SMU was on top before we were born, I mean, stuff like that has always been happening. It’s just now it’s legal. Now it’s public,” Jones said.
Pandora’s Box has opened in college football, and this free-for-all likely won’t be cleared up any time soon. “NIL” has basically become a synonym for “pay-for-play,” which is what this isn’t supposed to be.
Until federal legislation brings order to the sport, collectives and boosters will likely continue to operate in the gray area, and nothing will be enforced.
However, at the end of the day, athletes will go to the schools they want, and they’ll make the decisions that are best for their career and their financial stability. The original intent of NIL will still hold true.
“I’m happy for him,” Jones said of Iamaleava’s rumored megadeal. “And that’s all you gotta be man. I’m so with the NIL stuff; it’s how you approach it. I’m a lineman, man, and if there wasn’t any Pancake Factory, then I probably wouldn’t have any NIL deals to be honest.”