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NIL: How Does it Work? (Plus transfer rules)

Uncle Ken

Uncle Ken

Smoke Chedda tha Ass Getta
Club Member
Apologies if this thread is redundant, however my questions feel more expansive than a simple Google search.

-What are some of the structural constructs schools/communities/fanbases use to compensate players for their names, images and likenesses?

-What obligations do players who receive funds have to businesses and schools?

-What schools are able to pay the most (for instance, where does nebraska stand in its ability to pay players as incentive for offering their talents in lincoln)?

-Other conversation?
 
So, how does someone get paid say $1,000,000 and provide the proper value for that without it being Pay for Play?

The players seem to have the potential to unionize now and to sue to participate in the TV Deals? The real value of a player's NIL is the time they spend on TV playing the game.

No way do 85 guys in Lincoln, Nebraska provide any actual NIL value to Runza or Bubba's car lot!
 
4BienemyTDs said:
So, how does someone get paid say $1,000,000 and provide the proper value for that without it being Pay for Play?

The players seem to have the potential to unionize now and to sue to participate in the TV Deals? The real value of a player's NIL is the time they spend on TV playing the game.

No way do 85 guys in Lincoln, Nebraska provide any actual NIL value to Runza or Bubba's car lot!
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The money isn’t from the school. So it isn’t pay for play.

In many college football towns, players are (minor) celebrities. They add just as much, and often times a lot more, value than a talking head radio host.
 
manhattanbuff said:
The money isn’t from the school. So it isn’t pay for play.

In many college football towns, players are (minor) celebrities. They add just as much, and often times a lot more, value than a talking head radio host.
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Pay for Play can come from a Surrogate technically and violate amateurism

my biggest thing is how the money paid by whomever matches up with value given back.

so, 1 visit is $1,000,000? Bull****, that is why I ask about total off the field earnings by say Baker Mayfield in a year. He has to do commercials to earn it or wear shoes or whatever. Besides The Alabama QB, I have never seen a single thing of value by a college athlete
 
Uncle Ken said:
Apologies if this thread is redundant, however my questions feel more expansive than a simple Google search.

-What are some of the structural constructs schools/communities/fanbases use to compensate players for their names, images and likenesses?

-What obligations do players who receive funds have to businesses and schools?

-What schools are able to pay the most (for instance, where does nebraska stand in its ability to pay players as incentive for offering their talents in lincoln)?

-Other conversation?
Click to expand...

I think that's a matter of your negotiation skills.
 
4BienemyTDs said:
Pay for Play can come from a Surrogate technically and violate amateurism

my biggest thing is how the money paid by whomever matches up with value given back.

so, 1 visit is $1,000,000? Bull****, that is why I ask about total off the field earnings by say Baker Mayfield in a year. He has to do commercials to earn it or wear shoes or whatever. Besides The Alabama QB, I have never seen a single thing of value by a college athlete
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I feel like you want to apply old rules to a new paradigm.

The number of players getting anywhere near seven figures is very limited. They’re not getting $1mm for a single appearance.
 
manhattanbuff said:
I feel like you want to apply old rules to a new paradigm.

The number of players getting anywhere near seven figures is very limited. They’re not getting $1mm for a single appearance.
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Fo sho, but when one player on a college roster gets that, if it is ever true, it seems so freaking out of whack if they are not in commercials, or at public appearances, or having things on social media. Baker Mayfield has made about $10 million dollars as a brand spokesperson for about 6-8 companies since he was drafted, but he has to essentially work full-time promoting them, starring in commercials, etc... NIL was supposed to compensate players for being in a video game, or other appearances at what would be about at the most is $5,000 to $50,000 per year or even college career. No way are any of them earning more from their Name, Image, or Likeness. Now, are they earning someone/themselves more by playing in big games, or the CFP, yes, so what bothers me is that this needs to be a broad design of funds going from TV and other money streams to the players
 
4BienemyTDs said:
Fo sho, but when one player on a college roster gets that, if it is ever true, it seems so freaking out of whack if they are not in commercials, or at public appearances, or having things on social media. Baker Mayfield has made about $10 million dollars as a brand spokesperson for about 6-8 companies since he was drafted, but he has to essentially work full-time promoting them, starring in commercials, etc... NIL was supposed to compensate players for being in a video game, or other appearances at what would be about at the most is $5,000 to $50,000 per year or even college career. No way are any of them earning more from their Name, Image, or Likeness. Now, are they earning someone/themselves more by playing in big games, or the CFP, yes, so what bothers me is that this needs to be a broad design of funds going from TV and other money streams to the players
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I feel like your concept of what the market is for NIL is way off base. Instagram influencers with 100K followers and 5K OnlyFans subscribers make $40K a month.
 
manhattanbuff said:
I feel like your concept of what the market is for NIL is way off base. Instagram influencers with 100K followers and 5K OnlyFans subscribers make $40K a month.
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An influencer has to have a product or company to send an Instagram post though right? You cannot send a bull**** post and get paid.
Feels like Prime understands how to create and use your influence. His oldest son could be the most valuable person for our collectives and other outlets. Should we all have social media accounts and be plugged into all our guys so they have a larger influence?

I may not fully understand how social media income fully plays into it, but I just canot stand the concept of money for nothing from boosters or collectives without really seeing the players work to create reciprocal value, whether that is influence or whatever
 
4BienemyTDs said:
Fo sho, but when one player on a college roster gets that, if it is ever true, it seems so freaking out of whack if they are not in commercials, or at public appearances, or having things on social media. Baker Mayfield has made about $10 million dollars as a brand spokesperson for about 6-8 companies since he was drafted, but he has to essentially work full-time promoting them, starring in commercials, etc... NIL was supposed to compensate players for being in a video game, or other appearances at what would be about at the most is $5,000 to $50,000 per year or even college career. No way are any of them earning more from their Name, Image, or Likeness. Now, are they earning someone/themselves more by playing in big games, or the CFP, yes, so what bothers me is that this needs to be a broad design of funds going from TV and other money streams to the players
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Where did the "at most $5000 - $50000" range come from?
 
Uncle Ken said:

NIL: How Does it Work?​

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Hustling Make It Rain GIF
 
4BienemyTDs said:
An influencer has to have a product or company to send an Instagram post though right? You cannot send a bull**** post and get paid.
Feels like Prime understands how to create and use your influence. His oldest son could be the most valuable person for our collectives and other outlets. Should we all have social media accounts and be plugged into all our guys so they have a larger influence?

I may not fully understand how social media income fully plays into it, but I just canot stand the concept of money for nothing from boosters or collectives without really seeing the players work to create reciprocal value, whether that is influence or whatever
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The new model is that these women are the product. They sell their NIL to endorse products. They also sell images of their naked bodies. You probably don’t think there’s a correlation between what they make and, in many cases, a single post. That doesn’t mean that it isn’t valuable to many others, including the advertiser. Again, you’re applying old school thinking to an era of new valuation metrics for NIL sales.
 
hokiehead said:
Ok, but your link mentions that number in context of the EA settlement, not NIL in general.
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I understand, but what I am saying is that nobody thought that NIL would just flat out run away the way it has, and that is to be completely blamed on the lack of legislation, the lack of paying the players by the institutions, etc... The Schools and the NCAA are thrilled in a way with the run-amok NIL situation because nobody is specifically coming for the CFP money or the TV money, or any other Ticket money that is where the players should actually be paid from. NIL should have and does have a normal marketing value unless you just open it up the wild wild west as they have. The old SMU folks are probably like shoot, we would not have been put through the death penalty with the way it is now, darn

In response to other great responses, yes I am applying way to many old school thinking to the new world of how cash flows for influencers that otherwise would be in their parent's basements making nothing.
 
Last week, we saw the NCAA hand out its first-ever NIL ruling — the result of an infraction between twins on the University of Miami’s women’s basketball team — Haley and Hanna Cavinder — super-rich donor Canes donor John Ruiz.

Haley and Hanna Cavinder are both college basketball players and Tik Tok superstars, boasting over 4 million followers, who joined the Hurricanes after transferring from Fresno State last season. Before the 2022-23 season even started, the NCAA suspended Miami head coach Katie Meier for three games for a Level II violation of the NCAA rules. What was Meier’s crime? She reportedly organized a meeting between the Cavinder twins and school donor Ruiz.
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deadspin link
 
SIAP elsewhere, but the NCAA Football Game is being delayed now due to multiple lawsuits over the $500/player NIL amount EA said it would pay (or something along those lines).

Question: How much should these players get from EA Sports for having their NIL included in the game? $500 seems pretty arbitrary, but they also aren't doing anything for it, so what's the 'right" amount? $1k? $5k? Should it be a percentage of profits the game makes?
 
The Alabaster Yak said:
SIAP elsewhere, but the NCAA Football Game is being delayed now due to multiple lawsuits over the $500/player NIL amount EA said it would pay (or something along those lines).

Question: How much should these players get from EA Sports for having their NIL included in the game? $500 seems pretty arbitrary, but they also aren't doing anything for it, so what's the 'right" amount? $1k? $5k? Should it be a percentage of profits the game makes?
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I think the music broadcast model is the right model. Basically, any time a radio station broadcasts someone's music, they pay a royalty (it's like 10 cents or something diminishingly small) to an industry organization who then sends out royalty checks to the musicians, writers, etc who worked on the song. There's a set schedule.

What the right amount is, I don't know, but I do think some model that is directly tied to sales is correct. The more EA makes on the game, the more the players receive.
 
skibum said:
I think the music broadcast model is the right model. Basically, any time a radio station broadcasts someone's music, they pay a royalty (it's like 10 cents or something diminishingly small) to an industry organization who then sends out royalty checks to the musicians, writers, etc who worked on the song. There's a set schedule.

What the right amount is, I don't know, but I do think some model that is directly tied to sales is correct. The more EA makes on the game, the more the players receive.
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This would be the right approach.

The challenge is the streaming music industry is worth $35B/year which is big enough to create the ecosystem to handle the distribution.

Would a CFB game generate enough revenue to support the creation of the ecosystem? Guinness book of work records says the best selling Madden game of all time was 7.7M units. Say the game sells for $60 each. How much gets sent out in NIL? 5%? That may be wildly too high and that would be $3/game sold x 5M in sales or $15M/year to be distributed.

That’s a small fraction of the market for music streaming and isn’t going to add up to much per player. There is going to be a lot of faux outrage and hand wringing as this unfolds.

By the way, the distribution per stream is between 0.2 and 0.8 cents per stream, not 2-8 cents per stream, which is why some artists have a cow over it, particularly when that is then split with the music label, the agent, their manager, the distributor themselves etc.
 
Highlander said:
This would be the right approach.

The challenge is the streaming music industry is worth $35B/year which is big enough to create the ecosystem to handle the distribution.

Would a CFB game generate enough revenue to support the creation of the ecosystem? Guinness book of work records says the best selling Madden game of all time was 7.7M units. Say the game sells for $60 each. How much gets sent out in NIL? 5%? That may be wildly too high and that would be $3/game sold x 5M in sales or $15M/year to be distributed.

That’s a small fraction of the market for music streaming and isn’t going to add up to much per player. There is going to be a lot of faux outrage and hand wringing as this unfolds.

By the way, the distribution per stream is between 0.2 and 0.8 cents per stream, not 2-8 cents per stream, which is why some artists have a cow over it, particularly when that is then split with the music label, the agent, their manager, the distributor themselves etc.
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This short analysis of video game revenue has me convinced the valuations we see of CFB players are grossly inflated.
 
Highlander said:
This would be the right approach.

The challenge is the streaming music industry is worth $35B/year which is big enough to create the ecosystem to handle the distribution.

Would a CFB game generate enough revenue to support the creation of the ecosystem? Guinness book of work records says the best selling Madden game of all time was 7.7M units. Say the game sells for $60 each. How much gets sent out in NIL? 5%? That may be wildly too high and that would be $3/game sold x 5M in sales or $15M/year to be distributed.

That’s a small fraction of the market for music streaming and isn’t going to add up to much per player. There is going to be a lot of faux outrage and hand wringing as this unfolds.

By the way, the distribution per stream is between 0.2 and 0.8 cents per stream, not 2-8 cents per stream, which is why some artists have a cow over it, particularly when that is then split with the music label, the agent, their manager, the distributor themselves etc.
Click to expand...
Distribution is digital and easily trackable with minor code. Also, no technical debt to overcome. Building infrastructure feels like a minor hurdle.
 
Highlander said:
This would be the right approach.

The challenge is the streaming music industry is worth $35B/year which is big enough to create the ecosystem to handle the distribution.

Would a CFB game generate enough revenue to support the creation of the ecosystem? Guinness book of work records says the best selling Madden game of all time was 7.7M units. Say the game sells for $60 each. How much gets sent out in NIL? 5%? That may be wildly too high and that would be $3/game sold x 5M in sales or $15M/year to be distributed.

That’s a small fraction of the market for music streaming and isn’t going to add up to much per player. There is going to be a lot of faux outrage and hand wringing as this unfolds.

By the way, the distribution per stream is between 0.2 and 0.8 cents per stream, not 2-8 cents per stream, which is why some artists have a cow over it, particularly when that is then split with the music label, the agent, their manager, the distributor themselves etc.
Click to expand...
On your last sentence, what I think a lot of people fail to realize is that all they did was extend the exact same model and pricing from radio stations to streaming stations. (There is a technical difference where they had to update for "songs the listener chooses" which command a higher royalty vs "song that is chosen for the listener" with a lower one that wasn't present with the traditional radio model, but that's about all they did to update the model.) I personally know a studio musician from the 50s/60s who has lived on those royalty checks for decades.

But, back to the issue at hand, the Madden game. While a single edition has only sold that many units, one of the reasons EA likes these sports games is that it's not a "one and done forever" purchase. There is a built in reason for the user to repurchase every single year, even if they don't update the game engine & graphics: the players/teams change.

Where I think the nuance lies is in determining if there should be a tiered distribution schedule. Is it all FBS players? Do CUSA and SEC players get the same amount? Same amount per position? Scholarship vs non-scholarship?

But, to continue your back of the envelope math: there's something like 115 FBS schools. Let's assume it's all players, including non scholarship, and we'll assume 85 scholarship and 15 walk ons per team for an even 100. If it's $3 per game, and therefor $15MM to distribute, that's $1,300/player. If you add a "/year" to that, the number doesn't seem too far off. If you assume that EA isn't going to program walk-ons into the game, you're up around $1,500 - or $6,000-$7,500 over the course of a college career. That "feels" about right to me, but others may disagree.

But... the big reason to create a sort of clearinghouse infrastructure with a set schedule is to open the market up for new entries. "I can use this database of NIL in my app/game/____, and it will cost me $X/user or Y% of revenue ('d argue Y% of revenue would, long term, be more fair). I don't have to negotiate, I don't have to figure out licensing, I can just send a check." That would probably generate more long term revenue for the players than a bunch of one-off agreements with different producers.
 
Burrito said:
Distribution is digital and easily trackable with minor code. Also, no technical debt to overcome. Building infrastructure feels like a minor hurdle.
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Sorry. I didn’t explain myself adequately.

$15m/year isn’t enough for someone to skim 1-2% to get all parties to agree on how the rest is distributed.

I agree that the technology is the easy part.
 
this seems to potentially have very large repercussions, like bankrupting the NCAA

The NCAA model took another hit late Friday when a federal district judge awarded class-action status to an ongoing antitrust lawsuit against the NCAA.

U.S. District Judge Claudia Wilken ruled in House v. NCAA that not only the original plaintiffs could proceed with their lawsuit but potentially thousands of NCAA athletes could be grouped into a class that may potentially have been harmed. The lawsuit filed in 2020 seeks $1.4 billion in damages representing name, image and likeness revenue those athletes could have earned if it had been allowed during their enrollment.
...
Under antitrust law, damages would be tripled if the NCAA loses -- meaning a potential payout of $4.2 billion. The NCAA's net assets for fiscal 2022 were $458 million.
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CBS link
 
The whole NIL thing has become a scam. To try to correlate it to any sort of revenue model is insanity. Donors pay into a collective and the money is parsed out to players. From the ringer. The system is out of control.
NIL allows players to capitalize on their status and get money from outside entities—that’s the short version. The long version is that any semblance of rules was immediately and predictably bulldozed, and some top college football recruits have received anywhere from six figures to a few million dollars upon signing or staying with a certain program. The main NCAA stipulation on NIL is no “pay to play”—barring payment that’s contingent on an athlete playing for one school. The problem is that this has been roundly ignored and never really enforced, leading to markets that have developed at warp speed for top players.
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BlackNGold said:
The whole NIL thing has become a scam. To try to correlate it to any sort of revenue model is insanity. Donors pay into a collective and the money is parsed out to players. From the ringer. The system is out of control.
Click to expand...

I believe thats true. There are teams waving big bucks in the face of high quality players. The new now phase in college football is B1G and SEC teams using the portal to buy up the lessor conferences best players by offering them dough. Those big conferences wont have to really recruit anymore once their NILs get big enough. Let others do the developing for you then fleece em.

If that comes to pass it could be hard to keep Prime if he cant keep his recruits. Right now we have some talented guys that are here because they are connected to Prime thru a shared history. But eventually itll be the recruits that dont know Prime until they get to campus. We cant afford to pay what Alabama can pay when they come calling.

How do you evaluate a coach? And or keep a coach under those conditions?

EDIT moved this from where I originally posted (not about NIL).
 
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