NIL Question- Where does the $$$ come from
Question for the board as I am not in tune with all the NIL stuff.
Where does the actual $ come from? In the previous SEC bag-land we lived in, we were talking relatively small amounts of $. $100K here, there, etc. Could easily see weathly small/mid level business owners (think multi-unit car dealership for example) funding that type of endeavor.
The NIL chatter I hear are for some deals in the $5 million range. Who is putting up that type of money for unproven players- players who most people know nothing about- so there is little if any name recognition from an advertising standpoint. And, where is the return on the investment? Is this busines model sustainable?
December 21st, 2022 at 10:08 AM ^
"why am i getting negged?"
It's your screen name.
December 21st, 2022 at 10:30 AM ^
It's your screen name.
James Bond's Herpes Meds are a public good.
December 21st, 2022 at 10:09 AM ^
Didn’t neg, but college teams have those same revenue sources. Pro teams have to take that revenue, turn it around and pay player salaries in the hundreds of millions of dollars.
December 21st, 2022 at 10:29 AM ^
There is no traditional ROI in NIL. The ROI is the team being really good and getting to say to your other rich friends that you directly contributed to the teams success. The super wealthy throw their money around on a shit ton of things with no real ROI other than to brag about it and to maintain their status.
December 21st, 2022 at 10:39 AM ^
Honestly? For seriously moneyed people? It's about "things" more than anything as open as bragging about "my Saturday QB". Ergo. Cars, watches (easily costing more than cars), artworks, weekend yachts, jet shares, etc.. Those are private sources of satisfaction and pleasure.
NB. Just a somewhat well connected, old guy's perspective...
December 21st, 2022 at 1:32 PM ^
This is why NIL is destined to be a temporary waypoint. It really is a way of buying the players' acquiescence and taking their eyes off of the much bigger prize that is college sports revenues (well, for men's BB and football).
The schools, conferences and NCAA reel in the big time TV revenue, merchandise licensing, ticket sales, stadium sponsorships, etc. The players get none of this. The only way to change this would be to acknowledge the players are employees and pay them for their work. The NCAA strongly opposes that, but probably has a poor legal argument for doing so. Allowing NIL has put $$ in some players' hands and that has taken some of the steam out of their assault on the (il)legal edifice that is the NCAA.
Eventually the NIL market will rationalize as others have noted and the players will realize that everyone else is still getting fat on their dime and the fight over getting paid directly to play will resume. The players will likely ultimately prevail. It'll be the legally defensible and fair outcome, but it will end college football and basketball as we have known it. That will likely lead to it being less popular and making less money as a minor league, but I think it's unavoidable. Hopefully it takes 20+ years. I'll be old then and shaking my fists at clouds.....
December 21st, 2022 at 8:48 AM ^
If Mat Ishbia is putting up $32 million for an unproven coach, the places from which $5 million for unproven players are far more expansive.
December 21st, 2022 at 9:01 AM ^
it's not a "business model" - donors are not expecting real ROI. If you aren't expecting any ROI, the model doesn't need to be "sustainable". It's rich people sinking money into a very expensive hobby.
December 22nd, 2022 at 7:16 PM ^
It’s still a business model. “Business” does not imply profitability nor does it even imply operating within the structures of law or being rational. There are “bad businesses” and practices, distorted markets and irrational actors.
This notion that “business” means some sort of always rational, always efficient and always net positive product has been propagated by the Dave Brandons of the world to pump themselves up. Many if not most businesses fail.
December 21st, 2022 at 9:06 AM ^
Heaven.
December 21st, 2022 at 9:35 AM ^
From my crypto account on the FTX exchange.
December 21st, 2022 at 9:41 AM ^
The economy
December 21st, 2022 at 9:45 AM ^
I know NIL is where we have arrived in the legal journey (O'Bannon, etc.), but it would be much more direct and cleaner to have schools pay out of their direct revenue taking into account sport and impact (i.e., not every athlete would get paid the same amount). I am sure there are other factors like Title IX that would have to be managed, but this strikes me as much more straightforward and fair than having boosters pay for play.
December 21st, 2022 at 10:11 AM ^
Are you proposing that the entity directly profiting from the player be the one to pay him?
Inconceivable!
December 21st, 2022 at 10:22 AM ^
In the upper reaches of the NCAA Ivory Tower, where they debate things crucial to maintaining order such as whether or not cream cheese can be provided for the athletes, they believed 'all the money belongs to us'. It took the courts to set the ship on a new direction. That may be toward fair seas or shoals, but the legal system is messy more often than not.
December 21st, 2022 at 10:24 AM ^
A lot of these kids are lying about what they are getting or their NIL deal is heavily incentive based and over a period of more than one year. Like the QB that's going to Tennessee said he was getting 8 Million dollars. That's for 4 years and if they win the Natty lol.
Now where is all the money coming from? It's money these boosters and companies have been wanting to spend for ages now. They just had to do it in weird and clever ways. Now they can just hand it out willy nilly.
December 21st, 2022 at 12:04 PM ^
Absolutely, these deals are structured like NFL contracts where they get a nice signing bonus and then it's all incentives. The #3 QB in the country is not making more than all but a dozen HC guaranteed.
December 21st, 2022 at 12:02 PM ^
I think a lot of the chatter around NiL deals is just that - it's marketing to make you sound bigger and badder than you are. I harp on the Tucker contract but that was another example where the talk was "look at these rich boosters" and it turned into "the school is covering a bunch of the downside", and it was all about marketing by MSU.
Are some kids getting high 6-figure deals? Sure. But your average rich guy doesn't just hand millions out to single players who haven't proven a thing. Now, could there be NIL "budgets" schools have that are $10M+? Absolutely, but that feels more normal than the chatter you hear about guys making as much money as coaches because they're fast 17 year olds.
December 21st, 2022 at 12:21 PM ^
The Dark Side of the Force…
December 21st, 2022 at 12:37 PM ^
<Terrelle Pryor car.gif>
or equivalent boosterish local businesses
December 21st, 2022 at 12:54 PM ^
It comes from WAAY deeper pockets than mine.
December 21st, 2022 at 1:20 PM ^
Does anyone know how the Texas A&M NIL team is doing this year?
December 21st, 2022 at 2:43 PM ^
Rich idiots. Next question?
December 21st, 2022 at 4:33 PM ^
Thank you for asking the question I have been wondering this from the time I heard Quinn Ewers was getting 7million from OSU when it was clear he would not start for at least 2 years.
December 21st, 2022 at 6:46 PM ^
Money doesn't come from people, businesses, or corporations; money comes from the Money Cannon. Two decades reading MGoBlog taught me this.