Does anyone have insight into how these NIL deals are structured?

#1
37620VOL

37620VOL

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#1
The Boo and Nico matters are bringing this question to mind. How are collectives and similar entities protecting themselves in these deals? Are they paid out over time, similar to a construction contract? Are there clawback provisions for front-loaded deals? How are deals structured so that a player has to stay at a certain school to get paid?
 
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#2
#2
37620VOL said:
The Boo and Nico matters are bringing this question to mind. How are collectives and similar entities protecting themselves in these deals? Are they paid out over time, similar to a construction contract? Are there clawback provisions for front-loaded deals? How are deals structured so that a player has to stay at a certain school to get paid?
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While I am sure there is some structure, it is obviously not enough to get these kids to stay. Also, I think there is a question of whether it is "legal" to structure deals to prevent payment. I haven't heard much about this lately, but Arkansas was suing Nico's brother for leaving and going to UCLA.
 
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#3
#3
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#4
#4
37620VOL said:
The Boo and Nico matters are bringing this question to mind. How are collectives and similar entities protecting themselves in these deals? Are they paid out over time, similar to a construction contract? Are there clawback provisions for front-loaded deals? How are deals structured so that a player has to stay at a certain school to get paid?
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Any deal for this academic year would have been frontloaded before the June deadline. So any football player this fall has already received the bulk of his NIL money for the year. Could a collective or a business go after what they’ve already paid should the player not suit up? Possibly. Would depend on exactly what the contract called for. Remember, even in the Wild West era that we’ve been in the last few years, the only rule on NIL contracts was they could not be performance based or have performance incentives and they could not be contingent on a player being on a team’s roster or participating in their contests. Based on that, I think it would be really difficult to try and go after money that has already been paid.
 
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#5
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#6
#6
savannahfan said:
Too much legal mumbo jumbo.. Just tell us what it says....
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:eek: OK the bottom line is the new requirement for 3rd party NIL deals to run through the College Sports Commission will be a bottle neck but it will determine whether third-party NIL deals are made with the purpose of using a student-athlete’s NIL for a valid business purpose and do not exceed a reasonable range of compensation. Most of the current over compensated S-As and their agents won't be happy. Play for pay will become more covert.
 
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#7
#7
One would hope that each contract is performance-based. So if Nico, for instance, fails to attend required meet & greet events in Knoxville, he forfeits the corresponding percentage of that year's deal. And if he skips town, clearly not intending to make future sessions, that is breach of contract and he doesn't get any more pay.

But if the contracts are front-loaded, as Deerpark indicates, that would remove a lot of the financial incentive; kid can collect the bulk of the pay, then blow off the rest of the year.

Does make you wonder.

Go Vols!
 
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#8
#8
37620VOL said:
The Boo and Nico matters are bringing this question to mind. How are collectives and similar entities protecting themselves in these deals? Are they paid out over time, similar to a construction contract? Are there clawback provisions for front-loaded deals? How are deals structured so that a player has to stay at a certain school to get paid?
Click to expand...

they don't get paid if not in the town that the school is in. Most of the revenue (if not all) comes from local businesses or boosters / donors. So to receive the funds, they have to execute the requirements of the agreement which does NOT include going to a school or athletic performance.
 
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#10
#10

Can schools enter into NIL deals directly with student-athletes?​

Yes. Those deals are reported by the school and subject to the revenue sharing cap. Such deals are not subject to analyses regarding the range of compensation or valid business purpose.

What is the revenue share cap? How is it calculated?​

Each year, schools can share with student-athletes up to 22% of the average revenue among schools in the ACC, Big Ten, Big 12, Pac-12 and SEC from media rights, ticket sales and sponsorships – known as the revenue sharing cap. The cap for the 2025-26 academic year is $20.5 million per school. With a few potential exceptions, the cap will increase 4% the following two years and will be re-evaluated every three years over the duration of the 10-year settlement period.

What payments count towards the cap?​

Direct revenue sharing from schools and NIL deals made directly with schools count towards the cap. Existing scholarships, housing and costs will not count towards the cap. However, new scholarships created after the new system is implemented – up to $2.5 million – will count towards the cap. Third-party NIL deals will not count towards the cap.

www.collegesportscommission.org

FAQ

This website lays out the new system in place, overseen by the College Sports Commission.
www.collegesportscommission.org www.collegesportscommission.org
 
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#12
#12
WillisWG said:
:eek: OK the bottom line is the new requirement for 3rd party NIL deals to run through the College Sports Commission will be a bottle neck but it will determine whether third-party NIL deals are made with the purpose of using a student-athlete’s NIL for a valid business purpose and do not exceed a reasonable range of compensation. Most of the current over compensated S-As and their agents won't be happy. Play for pay will become more covert.
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Without a team, every player is without marketing value and it should be relatively easy for a sponsor to reclaim some money via legal action.

If Boo were to go to another team and I was a TN booster who paid him for sponsorship, I would require him to make the appearances wearing TN apparel just to make him earn the agreed upon contact.

Is that logical or infeasible?
 
#14
#14
adam.vol said:
Without a team, every player is without marketing value and it should be relatively easy for a sponsor to reclaim some money via legal action.

If Boo were to go to another team and I was a TN booster who paid him for sponsorship, I would require him to make the appearances wearing TN apparel just to make him earn the agreed upon contact.

Is that logical or infeasible?
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Believe the old rule applies that SAs cannot use the school's apparel/logos etc for NIL purposes.

But if you have an NIL deal that you an SA to continue to perform it probably reasonable to expect him to continue to perform. Ex. A 3rd party NIL deal with Arch Manning has value whether he's at Texas or another school. An NIL deal for a particular school you probably would let it drop.
 
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#16
#16
WillisWG said:
Old



New
www.collegesportscommission.org

Student-Athlete NIL Deals

This website lays out the new system in place, overseen by the College Sports Commission.
www.collegesportscommission.org www.collegesportscommission.org
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I've said all along, and have been harshly criticized, that nil had very little if anything to do with marketing. It is strictly play for pay.

Won't the new NIL rules bring back the brown bag payments?
 
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#17
#17
swampfoxfan said:
I've said all along, and have been harshly criticized, that nil had very little if anything to do with marketing. It is strictly play for pay.

Won't the new NIL rules bring back the brown bag payments?
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that is what I think will happen. School NIL deals is now tied to revenue sharing and capped to $2.5M which far below what some SAS are/we're getting. 3rd party NIL deals probably won't make up the difference. Kids, agents and families will want more
 
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#18
#18
Tennessee athletes will be under contract

UT athletes will sign an agreement to receive a specific amount of revenue from the university, which must be offered and perhaps negotiated.

In theory, players under contract who enter the transfer portal would have to pay a buyout to the school or forfeit a portion of their revenue, but that'll likely meet legal challenges. Almost every college sports rule has been tested in the courts.

Multi-year contracts especially would trigger buyouts, but it’s believed that those will go to only a few star players. After all, schools don't want to commit to too many athletes over multiple years, and vice versa, at least not until the environment appears more stable.

Most revenue-sharing contracts will be one-year deals, at least until schools can settle into long-term strategies. That’s similar to scholarships, which are awarded each year and then routinely renewed.

www.knoxnews.com

House settlement approves revenue sharing. Here's how Tennessee will pay players

University of Tennessee athletes will be paid revenue directly by the school, in addition to third-party NIL income. Here's how the new system works.
www.knoxnews.com
 
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