Here is the future of NIL ...

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This is from The Athletic. I occasionally post full articles that are behind their paywall. This is one of those times. Yikes ... I am not against NIL, but let's get the laws and the rules changed. If we are going to be this out in the open about it, change the laws and rules (I had to bold this because the first dimwit to respond posted as if I am against NIL, which I am obviously not).

[For those of you who can't read anything longer than a few hundred characters, basically it says that $10 million a year will be the minimal budget for all P5 schools to pay out to players, and that presentations will be made to recruits to show them their value]


Cars, apartments and ‘six-figure packages’: Inside the new, money-fueled frontier of the college football arms race

KNOXVILLE, Tenn. — In just more than seven months since being introduced to college sports, name, image and likeness has morphed into a recruiting superweapon.

And in the never-ending arms race of college football, those who outfit themselves best are bound to prosper.

“If you would have asked us four to five months ago, we might have said we want to try and raise $3 (million), $4 (million), $5 million annually. Now, the goal is $25 million annually. Or more. And we think that goal is absolutely attainable,” said Hunter Baddour, president and co-founder of Spyre Sports, a Tennessee-centric college sports collective. “We’ll have to work hard, which we will. If this is how the game is played, then game on.”

Late in the 2022 recruiting season, it became clear that this was precisely how the game was being played, and as coaches turn the page to the Class of 2023, the money and impact collectives such as Spyre Sports can have are only growing.

“We’re prepared to invest a substantial amount of resources into the 2023 recruiting class,” Baddour said. “When you add all that together, it’s well into the seven-figure category.”

Baddour and CEO James Clawson co-founded Spyre Sports in 2020 and quickly found fertile ground in name, image and likeness. It has become one of the sport’s most organized and advanced collectives, a new catch-all term in college sports for groups of fans with varying budgets set aside to help aid players in monetizing their name, image and likeness. Money is pooled from a variety of sources and distributed to players according to their value, while players are responsible for providing deliverables such as event appearances, social media posts or autographs.

The money is staggering, and so is the influence, especially for those with the means to show recruits their market value can outpace what it might be on a campus elsewhere.

“Neyland Stadium being packed, passion of the fans, being in the SEC, all those things are still major factors,” Baddour said, “but what NIL opportunities a player will have is right up there at the top now.”

On July 1, 2021, the NCAA removed the restrictor plates on athletes’ rights to monetize their name, image and likeness. The initial flood of deals was small, sometimes just for free gear or products from local businesses.

While it’s impossible to quantify the precise impact of money from an NIL package in a recruit’s mind, Tennessee signed seven of the nine Class of 2022 prospects Spyre Sports had significant conversations with during the recruiting process, according to Spyre.

“We realized being involved in recruiting was going to be a priority. Then we realized how much money we were going to need to be elite,” Baddour said. “And we’re shooting to be No. 1.”

But so is everyone else, and in college football especially, a brand new game is afoot, as that influence — and the money that provides it — only figures to increase in the Class of 2023.

Underneath the splashy headlines and mysterious deals is a budding economy on the recruiting trail where collectives across the sport such as Spyre are making players aware of their value and, once they arrive on campus, following through with money that reflects it.

“We’ve had so many different area businesses step up to be able to help us with this kind of package. Whether it’s apartments, condos, car dealerships, free places to eat. It can be as simple as tires. Car washes. We’ve done all kinds of stuff,” Clawson said.

Added Baddour: “All in all, it’s six-figure packages.”

Some are payable for multiple years, but packages like the ones Spyre helps arrange for players are routinely for more than six figures. In one recruiting class, that adds up.

“There will be an NIL collective for every Power 5 school by the end of 2022,” said Blake Lawrence, CEO of Opendorse, which helps businesses, collectives and athletes team up for endorsement deals. “And the top collectives will spend $10 million per year on NIL.”

It’s the newest frontier in college football’s ever-changing arms race, and this particular race extends to basketball, baseball and non-revenue sports as well. But most recruits who saw the biggest benefit of monetizing their value were those who waited to make a decision late in the 2022 recruiting calendar.

The recruits in the Class of 2023, however, will be the first ones who will be able to pursue NIL deals throughout their decision-making process. Collectives around the country are preparing, and in Spyre’s case, it’s focused on building a Tennessee-centric war chest.

It’s in stark contrast to the often widespread belief that the majority of NIL deals in college athletics was fueled by local businesses. In the case of collectives, which are sprouting up across the country every day, they’re fueled by fans of varied economic status.

The game has changed.

And collectives are about to become necessary to win.

The total NIL cost for a given recruiting class, like most monetary figures in the college athletics arms race, figures to only rise. In Spyre’s case, it’s preparing and planning for that number to balloon to $25 million to $30 million in the coming years.

It’s why it enlisted the help of a Washington, D.C., political fundraiser it connected with via Heath Shuler, a former Tennessee quarterback who played in the NFL before spending six years in Congress.

“They’ve taken the right approach, which is to get the right people involved and engaged, and they’ve done that from the fan standpoint to the high donors,” said Shuler, who does consulting work with the group. “The respect they have across the board has been evident in the amount of progress they’ve made and the amount of money they’ve raised.”

It’s a new, fast-changing world, and Spyre has focused on trying to use the upheaval to Tennessee’s advantage, hoping to jolt alive a dormant program that hasn’t won an SEC title since 1998 or competed for one since 2007. Collectives are going to grow more competitive as they grow more common, but Spyre opened its doors to The Athletic this week for a look inside its operation on the new forefront of recruiting battles across college sports.

Coaches, administrators or even donors might be uncomfortable with college football’s new reality, but many of those same people were once uncomfortable with other changes before this one.

“Reasonable people can disagree on NIL as a good or bad thing for college sports. But both sides can agree that it’s not going anywhere, and if you want to be competitive, you better embrace it, or you’ll be left behind,” Baddour said. “Support has been outstanding. People get it. They understand, even if they don’t like it. They want to win and they want to do whatever is necessary to win.”

Baddour and Clawson spent more than a decade at Allegiant Athletic Agency, a Tennessee-based sports agency. Most of their work was on the sports marketing arm of the agency, but at the NFL Scouting Combine in 2020, they began making plans to break off and start their own agency.

“The company was initially founded on player representation, but very quickly we started tracking NIL and how that was going to look about a year out and realizing the magnitude of what this was going to be,” Baddour said. “So quickly, our business model pivoted. … We realized pretty quickly this was going to be a lot more than mom-and-pop type deals.”

It hit hyperdrive last summer, when on two weeks’ notice, the NCAA announced players would be allowed to monetize their name, image and likeness. At 12:01 a.m. on July 1, Spyre Sports announced its first deal with Tennessee offensive lineman Cade Mays, a former five-star prospect who transferred to Tennessee from Georgia before the 2020 season.

Baddour and Clawson had helped amass millions of dollars in marketing deals throughout their careers in the sports agency world, representing players from every Power 5 conference, every SEC school and nearly two dozen former Tennessee players as they transitioned from college to the pros.

“We felt like we had a great case to make for why we were the guys to do this,” Clawson said.

They started in two places: First, they put together as many deals for current players as possible.

“When recruits come in for official visits, you know they’re going to ask the current players. I heard what coach said about NIL. What is the real deal?” Clawson said. “Our experience with them is what they tell those players.”

And that experience doesn’t have to just be in-person. Spyre’s social media accounts as well as players’ accounts aren’t shy about touting the benefits of their deals.

“We want players to see through social media if you come to Tennessee, they’re going to have a nice car, going to have a nice apartment,” Baddour said.

The other immediate priority was building relationships with key donors who had spent years or decades donating to Tennessee athletics and explaining how the world was changing and the role they could play.

“There’s an education period. I think it caught everybody by surprise. We still have conversations with people today who are like, ‘You can do what with college athletes now?’ There’s a huge education component to this to bring everybody up to speed and emphasizing how important it’s going to be, that if you don’t get behind this or understand or support this, there are going to be a lot of blue-blood programs, and they’re going to look up in two years and they’re going to be dormant because they didn’t adapt to this.”

That’s much of where Spyre’s time is spent now: rallying donors and raising support for the next round of recruits. Baddour and Clawson also can visit recruits themselves to build relationships and better learn recruits’ needs, interests and desires to put together the most attractive package possible.

Tennessee’s administration is not allowed to have any involvement with the procurement or negotiation of any deals, but a quick glance at any offer list, visitors list or recruits’ top school lists makes it clear who a given program is targeting. The harder a school’s pursuit, the more leverage a recruit has for a deal.

Within that space, negotiation happens. Players may look for more money in a given market. Other schools’ collectives may promise more. It’s capitalism, an often foreign concept to college athletics, which has long subsisted on a ban on players making meaningful money until they declare themselves professionals and leave their respective programs.

“Doing what we say we’re going to do is extremely important,” Baddour said. “It’s important to us to have a lot of communication, thoughtful conversations and do what we say we’re going to do. Deliver.”

The deals cannot be an inducement to attend a given university, per NCAA rules, but Baddour and Clawson’s local relationships with business owners and knowledge of the market give them unique insight into market value that they can then pursue.

“We need to make sure he understands what his potential opportunities are available if he comes to Tennessee, whether it’s businesses that have done deals are have said they want to do them in Knoxville, Nashville or nationally. We show him, these are how many players are on six-figure deals,” Clawson said. “We feel like the quarterback at Tennessee can make as much money as anywhere in the country. If you go out and replicate the season Hendon Hooker just had, there’s no reason why at the end of the day in deals we do and other companies do or national brands, the quarterback at Tennessee shouldn’t make seven figures a year.”

Hooker, whose breakout season in 2021 landed him on the shortlist of Heisman contenders entering the 2022 season, is not an exclusive client with Spyre and can pursue deals outside of what it procures.

“Out of respect for Hendon, it’s probably inappropriate to discuss specific dollar amounts, and we don’t want our competitors to know what we’re doing, but I promise what Hendon has been presented with has been substantial,” Clawson said.

Spyre will, however, share that information with prospective future quarterbacks, such as five-star quarterback Nico Iamaleava, one of Tennessee’s top targets in the 2023 recruiting class.

And what are now sit-downs and chats with coveted recruits may soon grow into full-blown presentations on visits completely independent of the schools recruiting athletes.

“As laws evolve, it’ll get to a point where that’s a big part of what we do, especially with a quarterback and telling the entire story and putting together a marketing pitch from A to Z that addresses social media, his opportunities in Knoxville, with this fan base, not just in the next four years but over the next 40,” Clawson said.

Added Baddour: “We want to be as aggressive as possible but also compliant. So depending on the particular state laws, it depends on how much face time we can actually get.”

Over time, courting big donors in person grew to courting fans as donors online, too, with an assist from their Washington, D.C., political ties offering tips on grassroots fundraising. Spyre’s team was at the J.W. Marriott hotel in Nashville for the Vols’ Music City Bowl appearance when a fan suggested what it called The 1951 Club.

It’s both a tool for the future and a nod to the past, honoring Tennessee’s 1951 national title team. But the initial club, accessible on Spyre’s website, had the lowest annual donation at $1,951, a little more than $160 per month.

“When we first launched, we had a bunch of one-time donations, but we got an overwhelming number of people saying, ‘I would love to give $19.51 a month for X number of years. I can do that,” said Sheridan Gannon, Spyre’s head of media and entertainment. “I think it helps more casual fans that want to support, but don’t have the means to do as much as they want, feel like they are involved in this as well.”

According to Clawson, the fan crush “demanded” Spyre give fans with limited funding the ability to assist according to their own budget.

Membership in the group with the least financial investment still gives fans access to players at NIL events around the state, as well as a newsletter. They’re also entered in lotteries to win signed memorabilia and can log on for virtual events with current and former Vols. This offseason, players may travel around the region with Spyre for a caravan like coaches often do. Some players are paid per appearance, but others on larger deals are paid in periodic installments, with social media posts, NIL event appearances and autographing memorabilia servicing as the deliverable that differentiates name, image and likeness deals from pay-for-play deals that are still banned in college football.

The NIL space already has evolved in just the seven months it has become part of the college sports landscape. Collectives such as Spyre are the newest tool in the arms race but a tricky one that isn’t associated with any particular university other than usually being led by alums. Clawson, Baddour and Gannon are all Tennessee graduates and fans, but big programs such as Florida, Auburn, Nebraska, Oregon, South Carolina and several others have collectives of varying resources and organization, too. Texas, for example, has multiple collectives aiming for the same goal.

Baddour envisions a scenario at some places in the future where split loyalties and interests could pose problems. Additionally, in some cases donors may shift their donations from traditional funds to collectives. In its case, Tennessee hasn’t posed any problems or put up walls to make Spyre’s work more difficult, but that may not be the case everywhere or forever at Tennessee.

Spyre has given Tennessee a head start, but staying ahead as collectives (and their respective budgets) grow, is the task at hand for any collective.

“The next two years are critical, specifically for football. We have to stay innovative, organized and grow our team. We have to go out and fundraise nationally. If we execute, Tennessee will be able to close the talent gap with teams like Georgia and Alabama a lot quicker than the previous model, where you had to build a program back slowly,” Baddour said. “It’s an everyday situation, and we want to make sure we’re ahead of our competitors in the NIL space.”

Collectives quickly learn that every dollar counts and that ownership can come at a variety of levels. But while money has always fueled college football, that fuel is now going in a brand-new engine. And the price is only going to rise.

“It’s investing in players just like you invest in brick and mortar and facilities to have a competitive advantage,” Baddour said. “Now you can invest those same dollars and put it to that defensive back that you can see on the field every Saturday.”
 
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time to change the laws? What are you, a commie?
 
I’m pro-cheating if there is a cap.

I’m also pro-every student getting tickets before the general public has a crack at it.
 
I’m pro-cheating if there is a cap.

I’m also pro-every student getting tickets before the general public has a crack at it.
fuck those students, let me get a tix dammit!!!
 
SO FUCKING WHAT? Its about time.
So, you read the entire article, but not my second sentence:

Yikes ... I am not against NIL, but let's get the laws and the rules changed. If we are going to be this out in the open about it, change the laws and rules.

SMH
 
When the tax bill comes do a lot of these kids are really gonna get fucked.
I agree. It's not a reason to not do it, but it is going to be funny when the IRS cracks some heads.
 
I’m pro-cheating if there is a cap.

I’m also pro-every student getting tickets before the general public has a crack at it.
You can't ignore who it is that actually is paying the bills of the athletic department and it isn't the students. That said, I am all for generous tickets for students. My guess is that at most schools, they have more student tickets than are used.
 
I agree. It's not a reason to not do it, but it is going to be funny when the IRS cracks some heads.
I’m not advocating for the irs to target anyone but you think you can just throw money and cars and houses at these kids and there not be tax consequences, for the donors and intermediaries behind NIL and the kids receiving the benefit then they’re in for a big surprise

Its like that time Oprah bought every audience member a car. It was like $30,000 per car and that was treated as an extra $30,000 in income they owed the tax on. A lot of guests were blindsided by that bill.
 
no they won't..
You have any idea what you would owe in taxes on $1M? And some of these guys will be getting multiples of that.
 
You have any idea what you would owe in taxes on $1M? And some of these guys will be getting multiples of that.
if it was purely cash, you would hope they'd do it up in some way like a paycheck rather than bonus, but when you start putting in the things like cars, housing, etc... that's where you'd figure these collectives should come in to offer up some more support and responsibility in making sure everything is good to go, which is where you'll be seeing people skimming/stealing from these kids.
 
if it was purely cash, you would hope they'd do it up in some way like a paycheck rather than bonus, but when you start putting in the things like cars, housing, etc... that's where you'd figure these collectives should come in to offer up some more support and responsibility in making sure everything is good to go, which is where you'll be seeing people skimming/stealing from these kids.
Except you can’t make it look like a paycheck because they are not employees of the company. They are going to be given cash just the same as any contractor the company deals with. If they made it look like a paycheck then the company has to pay payroll taxes on what is paid. These athletes are going to be 1099’d just like any contractor. The schools need to offer advisors to what they need to do in regards to these NIL deals and the tax implications.
 
I honestly don't like this new reality.

Cars, condos, millions
You have any idea what you would owe in taxes on $1M? And some of these guys will be getting multiples of that.
With no withholding and few if any will realize they need to make estimated tax payments.

The real issue is going to be how many of these families start depending on that cash just to see if go poof.

It’s not going to be pretty.
 
AD's are going to have to hire a stable of CPAs to handle the monies fer the athletes. Then the embezzlement starts! :laugh:
 
You can't ignore who it is that actually is paying the bills of the athletic department and it isn't the students. That said, I am all for generous tickets for students. My guess is that at most schools, they have more student tickets than are used.
I’m not ignoring why the school has an athletic department.
 
I honestly don't like this new reality.

Cars, condos, millions

With no withholding and few if any will realize they need to make estimated tax payments.

The real issue is going to be how many of these families start depending on that cash just to see if go poof.

It’s not going to be pretty.
Agreed, but it's not a reason not to do it.

For those that don't think there will be a mess here, look at how many NFL and NBA players fuck up their finances and they are grown ass men. Absent financial advisors and/or agents, if you think a kid who gets a $50,000 car realizes he needs to hold back $10,000 in cash to pay the tax on said car, you are nuts.

Also, the hangers on, the posses, the long lost family members ... it's going to be a mess for many of them.
 
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