Interesting read. Dabo was the first to publicly ignore NIL and the portal chaos. Now this from Saban.
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The current NIL dollars are not sustainable. Eventually donors are going to tire of paying millions each year to pay players.
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How so? Itâs literally capitalism at work.
Donor funnels money to a local restaurant. Restaurant announces deal with highly rated recruit. Recruit drives customers to restaurant. Restaurant makes money and donor gets a piece of it back.
Understand that the donor is still prioritizing the success of their football program than making a buck, but the money machine will still turn
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Heck Iâm sure itâs happened in Houston too⊠kids asking for cash and coach is like no
That kind of money demands a return. That isnât getting a picture and signed football from coach and a hearty handshake at the golf tournament kind of money. That is investment level money.
What does the donor get for that kind of money? Big money at Houston gets your name on a building and some tax advantages. What does a 1.3 million get you if you provide that kind of money for one player? One player that could easily get hurt or leave the program the following year for the next $1.3 million deal?
I am having a hard time understanding the economics of NIL? Private boxes I get, there is ego, there is comfort, there is a well stocked bar and program celebrities that will stop by and chat up your guests. You could easily make that into a business marketing vehicle. What in the hell does $1.3 million in NIL money get you?
So someone pitch it to me, suppose I have that kind of money lying around (which I donât), sell me on why this is a good use of my money.
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Money going into a business like this is either debt or revenue. And both have to be accounted for with the IRS. I know a lot of restaurants and none of them make big money on advertising. Since the money coming in is not debt structured it will be considered revenue by the IRS. And it will be taxed over 20% at best. The restaurant would be gambling their P&L and their livelihood of a 19 year-oldâs ability to drive in business. Not to mention the donor will have to account for all this as well. What a mess.
I know this was just an analogy but the same dynamics apply to any business. I see the NIL infusions being done more directly, right in the face of the NCAA and member schoolsâŠthrough consortiums. Which doesnât refute the end result of your analogy. But demonstrates the seediness of the process.
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I understand that kind of money last year and this year. Kind of the swagger swing right now.
IMG broadcasting used to have a commercial on the Coog radio broadcasts about advertising with them is advertising to the most loyal fan bases in the world, the college fan. Alumni give for a number of reasons, but a big reason is the pride and nostalgia they have in their university. So the NIL collectives are just the colleges getting lots of $100 and $1000 annual checks. You think that alumni is hoping that for $1000 they change the world? No, but they probably get invited to a neat event where they get to shake Renuâs hand or something. So if they can do the same thing for some event with athletes, and get a little dose of nostalgia and get the feeling that they are in a group that helped win, well that makes sense.
The super rich rarely became super rich throwing money away. They are looking for a ROI. They want their name to ring on. They want ârich guy I never heard ofâ hall to be there 100 years after they are gone. They also write small checks to go to bigger events than the $1000 guy. They write checks already for weight rooms and ops buildings and planes at a campus like bama that pulls in 100 million from football. They arenât hurting for cash. That guy isnât changing the world. But that annual $100000 donation gets them a meeting with Saban or oats or whomever they want. Ego. Now they start writing those checks and nothing extra happens, well, those checks for weight rooms go away as well.
Best post I have read about the nil.
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We need more of the Alabamaâs and Clemsonâs of the world to advocate for NIL change. This is the only way it gets done.
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Yep I had a shareholder want to give six figures to cover some of her kidâs bonehead mistakes. She said to use it for his bad marketing and production issues. I said it will either be an equity investment or a shareholder loan.
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Nope. In fact, the more Dabo and Nick get on TV and complain, the less likely that anything will get done.
You think the BIG, Big 12 or other SEC or ACC schools care about what those two think? Let alone Congress?
If your number 1 advocates in Congress are Senators Tommy Tuberville and Roger Wicker of AL and MS respectively, your are not going to get any support. These are not the sort of people you want out in front trying to sell reform to the broader public. They look and sound like the sort of people who want to segregate schools again.
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Is it or should we look at it with another point of view?
USC, Alabama, Clemson have all cheated to get recruits. Some have been caught and some not. All of this nil non sense is due to two things:
Hypocrisy
nfl not willing to have a âminor league systemâ
Hypocrisy? Because âbuyingâ players to come to a program has been going on since the early days of college football. I brought up Cam Newton going to Auburn for more $200k/highest bidder. Did Auburn get punished? No the ncaa looked the other way.
The NFL wants two super conferences or three at most. By doing so it makes these players play against the very best thus having these players enter the NFL âreadyâ
Only the ncaa has to blame itself for this.
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Preach!
The only way to get rid of all this corruption wrought by the stupidity and hypocrisy of the NCAA is to either (i) have an open, transparent system with minimal guardrails or (ii) get rid of college athletics and make the pro leagues(especially the NFL) pay for their own minor league systems.
So, we must either flood the system with money or get rid of the system itself. You cannot get the money out of the system because there is too much money at stake for everyone involved.
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Once you open pandoraâs box thereâs no going back. No way you can put a stipend on it! Impossible! Lol
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Too bad pure capitalism does not work.
Lots of detailed responses on the economics of it here. Basically, right now the donor can just pay the athlete for an autograph instead of wasting time and energy funneling through a restaurant. Next, in most cases no business will get funneled back to the restaurant, especially not enough to increase profits more than the athlete was paid, thus a loss - not good capitalism.
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I would bet money a lot of coaches agree with those two. The fans may not, but I bet coaches and some athletic admins do. Coaches are all probably waiting for the complaining from NIL donors to demand their players get playing time for their money, then wait for the first coach to get publicly fired from the boosters.
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Iâm not arguing with anyoneâs ideas about how NIL will be used because no matter what you dream up I guarantee its already being done by some bonehead to get 5-star recruits.
The way it will get reigned-in is by the IRS weaving the institution into the transaction. When that happens youâll see blue bloods calling emergency meetings at 3am.
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Too many benefits of using the nil vs paying an athlete for an autograph to count. Nil is a godsend to programs with loyal followings who have money.
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Itâs a godsend for the 9000 football players currently playing that will never sniff the nfl.
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