In our latest webinar, TCA President Russell White shared insights on the evolving NIL landscape and the crucial role of collectives. We discussed how TCA’s partnerships with universities and various services, like tutoring and financial literacy education, support student-athletes. Russell also emphasized the importance of integrating collectives into university NIL management and the impact of revenue sharing.
Collectives in a revenue sharing world- 2:48
Collectives need to adapt by managing the revenue-sharing component in ways that best fit their respective institutions. Each school will have unique needs, and collectives must be prepared to offer tailored solutions. Providing timely information and sharing best practices will be crucial in helping institutions navigate these changes effectively. While the core mission of collectives—to support student-athletes—remains unchanged, so does the fundamental objective of associations, which is to support these collectives.
It’s important to remember that universities will now have 22% less revenue due to the settlement framework. Collectives can play a vital role in filling some of these financial gaps. By leveraging resources and forming strategic partnerships with universities, collectives can help mitigate the impact of reduced revenue, ensuring that both the institutions and their athletes continue to thrive.
What universities should prepare for- 4:26Â
As NIL responsibility shifts to the institutions, they are facing various liabilities involved in managing NIL operations, including Title IX compliance, employment status, FOIA liabilities, and maintaining tax-exempt status. Collectives can serve as the operational engine, aiding universities in navigating these complexities. Many institutions already collaborate with their collectives, and bringing NIL operations in-house can be a positive move for universities. Collectives possess significant experience in managing NIL at a high level, while universities may lack this expertise.
Universities should prepare to negotiate NIL deals based on fair market value, considering all parties involved in the negotiation process, such as athletes, agents, and parents. Universities should also be prepared to assist in setting up bank accounts or business entities, explaining tax implications, and clarifying deliverables on NIL deals. When the transfer portal opens, having deals prepared and written to protect the collective and university from athletes transferring while also incentivizing them to stay can be crucial. Providing athletes with a great experience beyond financial incentives can help retain them and reduce the likelihood of transfers.
With universities facing a 22% revenue reduction, staff cuts may be inevitable. Collectives, with their extensive experience in managing NIL, can help fill this gap when brought in-house. By leveraging the expertise of collectives, universities can effectively manage NIL operations, ensuring compliance, optimizing negotiations, and maintaining a positive experience for athletes.
Explaining Fair Market value- 8:46
Professional athletes and celebrities have long been engaged in the endorsement world, operating within the concept of fair market value. Traditionally, fair market value is determined by what someone is willing to pay, but it remains a moving target. There are tools and data sets available from various companies that can help estimate this value. Currently, approximately 80% of NIL money flows through collectives, giving them valuable insights into market trends, including what athletes are asking for and what entities are willing to pay. These trends vary significantly by sport and conference. However, fair market value is not easily enforceable, as noted by White. Many discussions surrounding fair market value have not been collectively bargained and are unlikely to be in the near future. Despite this, collectives play a crucial role in navigating these valuations, leveraging their experience and data to provide a realistic picture of the market.
Athlete Advisory Committee- 11:00
TCA collaborates with 40 schools and approximately 27,000 athletes, focusing on their athlete advisory committee to understand athletes’ perspectives and needs. By actively engaging with athletes, TCA aims to amplify their voices, particularly through their extensive involvement with DC congressional and senate leaders. TCA’s initiative includes taking athletes to DC to participate in discussions with lawmakers, ensuring their viewpoints are represented. The athlete advisory committee aims for a balanced representation from both male and female sports, along with revenue and non-revenue sports. Athletes will serve on the committee for a term, after which the position will rotate to include new participants, fostering diverse and ongoing athlete involvement.
TCA Partnerships- 20:30Â
TCA is collaborating with several partners, including Basepath, to offer free or discounted services to TCA members. For instance, TCA partners with organizations that provide online or in-person tutoring. They are also building an educational infrastructure with a strong emphasis on financial literacy, covering essential topics like taxes and various business structures and entities. Additionally, TCA advocates for integrating athletes into advertisements by every brand that spends money as a corporate partner of a university. By working with collectives, all the money goes directly to the athletes, unlike agencies that take a cut of every deal. Collectives facilitate deals without taking a commission, ensuring maximum benefit for the athletes.
The best way for schools and collectives to work together- 27:35
Initially, athletic departments saw collectives as competition for resources and donor support. However, they quickly realized that incorporating NIL into their strategies was essential to remain competitive. White observes that when athletic department leaders are willing to relinquish some control and collaborate with third-party partners, it significantly enhances the collective’s chances of success. This partnership can include expanding the offerings at booster organizations to support donations to the collective. Both the university and the collective share a common goal: to benefit the athletes. By working together and supporting the athletes, both entities can contribute to their success on and off the field.