Episode 43 - NIL Discussion w/ Matt Brown

And when I say market-based, n i l I mean an athlete doing a deal with a business or maybe participating in some kind of camp or, uh, playing in a band or selling pottery somewhere. Do doing a kind of deal with an entity that is based on market reality. Uh, so like for an example, I've paid, I don't know, 14 athletes I think over the last year and a. To either promote extra points or to produce content for extra points. I don't really care, uh, where they go to school.

I'm, I'm not doing these deals because I'm trying to influence anybody one way or the other. The last deal I did was with a young woman who's a pole vaulter at Notre Dame. Anybody that follows me on Twitter knows I love making fun of Notre Dame. I'm, I'm definitely not a Notre Dame fan. I did the Notre Dame win four and eight joke six years after it stopped being funny. Like, what, what I, I looked at, I, I did this deal because I thought it made financial sense. Thousands of athletes.

Are doing deals just like this, and it is a market that has its challenges. It has its inefficiencies, but it definitely exists and it's one that I anticipate athletes at O D U and some of their peer institutions could take advantage of. That's one segment. We also have a completely different segment that I would like to call Bagman, N I L, and that these are deals that. Absolutely nothing to do with the individual marketability of any athlete.

They are salaries, they are talent acquisition or talent retention fees generally paid from n i l collectives or specific donors or boosters. Um, an exchange for maybe some charity work and, uh, I'm making air quotes around the word charity here. Maybe an exchange for autographs or some kind of appearances, but it's, it has nothing to do with being able to drive any kind of business outcome as an example.

If you were a high school football player, say a, a, a five star quarterback, you may, as you read in the, uh, in the athletic and probably heard about this, if you're a college football fan, um, sign an agreement with the collective that would pay out around 2 million a year. There is no high school football player in the country whose individual marketability is worth 2 million. There's not there. There's a handful of basketball players.

Barney James is probably worth that much for the right campaign. That football player, even a quarterback right now isn't. That person may very well be worth 2 million to the University of Tennessee as a football player and their ability to win football games and sell football tickets and, and have performance there.

But in terms of being able to sell something on Instagram or participate in a camp or endorse a product, sell sub subscriptions, no. And like the people that are telling you otherwise are trying to sell you something. Um, and, and, but that, that model exist. It doesn't respond to business, uh, incentives. It doesn't respond to market forces the same way. It has different challenges, so I don't like grouping them all under N I L I. I try to say, okay, there, there's two different things here.

And then depending on the athlete, and depending on the goals and what we're talking about here, that might be market driven. It might be bagman driven. And then once we know, we can kind of engage with it on those merits. Does that.

People in the Sunbelt or people in conference u s a that are prepared to give a hundred dollars handshakes to recruits like that's been going on since the sixties. I don't want to incriminate anybody at O D U, but my assumption would be somebody somewhere in that program is, is, is prepared to pick up a, the tab for a couple of those things for people that are doing well.

But it's, it's not as much of an issue in the high school recruiting world, like tho tho the collectives that exist that are supporting peer programs to od. We could talk about this in a second if you want, are are not the same kind of collective that exists supporting Oregon or Tennessee or Kentucky or Texas a and m. They're not legally incorporated the same way. They're not raising money the same way, and they're not distributing money the same way.

What's that model? What's that model gonna.

They have different goals, they have different levels of sophistication. So like on, on the lowest end here and more of these are kind of going away, but they do still exist. There are collect. which are literally based literally just a group of message board dads passing a hat around Venmo and trying to distribute a couple hundred dollars for someone to come say hi to tailgate or to sign some autographs. I don't say that pejoratively, I don't say that to humorously exaggerate.

I mean, like, I really think like T C U had a collective like that. F I u had a collective like that. There's, there's, there's a handful of other ones They're. There's no institutional fundraising happening, right? There's no development, uh, professional happening here. It's just let's pass the hat and, and far but it from me to besmirch paying an athlete $350 to hang outta the tailgate or, or sign some autographs. $350, $350, man. Like that was my rent when I was in college at Ohio State.

Like, we, we should not disparage sharing that kind of money. It's not gonna change a, a, a recruiting decision probably. Right. So that's, that's one. You have a handful of collectives, uh, to the best of my knowledge, exclusively at the high level power five area that are really being run as for-profit companies. They're, they are establishing themselves as marketing agencies. They might have a 20 person headcount, 15 person headcount with, with multiple, uh, individuals.

So all they do is, is make phone calls and try to solicit money or try to, to broker some of these outside deals. And the collective is gonna capture a percentage of that money for themselves, not just for like baseline operating expenses, but to make a. What K Clutch Sports does. That's what ca a a does. That's what a supports marketing company does.

It's a hard business to be in, but if you're supporting a gigantic brand and you're really good at development, you, you can make a business that way. If you're representing a lot of people, it's not the standard. But, you know, I think Tennessee is probably the closest example to what this looks like right now. And that's, that's an eight figure plus operation at the moment. Um, what's more common would then be to have something in the middle of a a, a collective that's either run.

Some boosters, maybe some ex athletic department officials, uh, people from the business community, ideally at least one person that has some level of, of nonprofit fundraising experience and somebody else who has some accounting experience. Um, and you can set this up as a nonprofit where you are trying to raise money and then kind of funnel it through charities to give to athletes to do charitable things. Or you could be trying to match athletes with potential.

For-profit marketing opportunities. There are a handful of companies that now manage multiple of these things. You might go and say, we want to kind of, you are interested in starting a collective. We don't have that experience. You can call somebody like Blueprint or Student Athlete n I L and they'll say, we'll professionally manage it for you. Um, and Blueprint I, I believe is one that does a couple of mid-major collectives. The the Friends of Rocky at Toledo, which I think is one of the.

Um, expansive. Mid-major collectives, I wanna say, is run by that company. So there's a few of those and you have some that are kind of, that are, that are done, uh, you know, in-house. Um, there's, you have, you have some groups which are literally just trying to pay salaries, right? We're give, give us the money and we'll give a lump sum payment to a current athlete to help them as, as some kind of retention.

And then you have some that are, We're not trying to get involved in recruiting at all. We won't deal with anybody until they signed a national letter of intent and we're trying to match them with for-profit entities. So how you wanna structure it is, is in part philosophical. Part of it depends on your experience that you have with that group of boosters or, or that those, that group of individual, uh, individuals, what sports that you wanna support and, and how expansive, uh, you you wanna be.

I think just about everybody in FBS football. Could probably support one of these groups. If you have five or six, you probably run into problems. That's what happened at Virginia Tech there for a little while. But it that, it, it is, it is something that, that, that you could do to, to provide some, some extra value because, um, I don't know, maybe people may not, may not fully appreciate this finding deal. Can be hard and it's really time consuming.

And if there's one thing that athletes at ODU you do not have, whether you are a softball player or a soccer player or a football player, it's, it's free time. It's not a 20 hour commitment to be an O D U football player, like especially in season. That's a 30 hour commitment. Then you're going to class, then you're traveling, you've got weights, you've got meetings.

God forbid somebody wants to spend some time playing call duty every once in a while or maybe go on a date, like the last thing that they have is 10 hours to go mine Instagram to go find some deal to sell energy drinks. So in a perfect world, the collective that might have some of that experience can help match the athlete with a brand or an entity that would benefit from working with them. Does that make.

They have a portal set up, but instead of having a third party run it, they have hired a company locally that's run by a Louisiana alum to run. So a little bit more hands on and more direct. Probably has more experience and a better idea of the target market for Louisiana fans. So that's a little bit more for our fans to be updated on. I'm not sure where we're going in Old Dominion, but, that's why we're doing this talk with you today, Matt.

We're just trying to educate folks, so they understand it better.

If you're a brand and you wanna work with an ODU U athlete, you go to this website, which we're advertising here, and the basketball arena, it's in the programs that's at the tailgates. And you could find an athlete there. We won't broker the deal for you, but, but you can negotiate with them and reach out to them independently to set up a deal. There's, it's, it's the, the opp, the opportunity cost for doing this is not super, not super high.

The problem that I have heard from both mid-major and even high major programs is that, Um, it takes a lot of work to recruit brands to participate in this because like I, as I do, the wing is a wing example, is something, is a very good one. The kind of companies that normally would really financially benefit from working with an an O D U athlete are gonna be probably restaurants.

They're probably going to be Norfolk centered professional services company, real estate agents, attorneys, uh, uh, you know, life insur insurance, sales people, you know, those kind of things. Campus bars or like hyper local retail. The problem with those kind of businesses is that most of them have never done influencer marketing before. They have no idea how to evaluate the success of a marketing campaign. They have no idea how to price a marketing campaign. They don't know what C P M is.

They've probably never bought a Facebook ad before. And when you use the influencer or the open doors or whatever school specific platform, and you start those negotiations and then you figure out, well, I don't know what the hell to charge here. Uh, am I looking at just, did I get a bunch of sales or I set up an affiliate code? Do I have to set up a, a tracking pixel? And also, God bless the O D U athlete here and I, but, but if they're like most 19 year olds, they're bad at social media.

And, and by that I mean. They're not typically posting to build a gigantic audience. And the skillset that comes with running these campaigns is not native, particularly if the brand ask to do has, has them do something like Twitter or TikTok where maybe the people on the brand site aren't as familiar with that place, uh, uh, you know, cuz that's not where the athlete is. So it's, it's this big mess. The places that have been successful have dedicated university resources to recruiting brands.

Like I'm talking, you might need to literally walk the streets of Norfolk or walk Newport News or something and walk into bars and say, Hey, you know what I think you would really benefit from is working with our softball team. and here's the, here's the, I'm gonna walk you through it. Right? I'm like, go real old school. But most people don't have the, the manpower for that. Like I, I know I'm not looking at this in front of me.

I'm guessing ODU U doesn't have like 12 pe like athletic department development professionals. The only school that I know top my head that I think has had a lot of success with their school specific marketplace has been Western Ken. Um, and, and Southern miss a, a little bit, but a, a lot of them, you know, here in Chicago where I, where I'm based, like DePaul has one of these that's a bigger brand. It's mostly a ghost town. Chicago's huge man.

Uh, it's because they, they're not, they haven't been able to kind of get outside their, their bubble to sign people up. So that's, that's a, that's one of the operational challenges, right? Like if you're trying to help drum up market-based, n I. That's, it's not just a athlete education and athlete recruitment component. There's a brand side component for this here too, and it's a, I don't think anybody's really solved that yet. If I knew the answer, brother Cat fellas, I'd be doing that.

I, I wouldn't be showing a newsletter trying to beg people to pay me eight bucks so I can go get conference you with say, realignment scoops. Like there's, there's a lot of money to be made there, but even the big companies haven't mastered.

One is we're going to get an initial ruling for NCAA v Johnson. If you're not familiar with this case, it's working its way through federal court Right now it's centered around a handful of institutions in Pennsylvania that have sued. And the question at stake here is whether athletes at places like Villanova and Black Nell, not Penn State, um, were improperly classified as as students, as student athletes in the shipping of employees, and therefore would be.

Things like minimum wage at workman's comp, the ability to collectively bargain. I don't anticipate this. Maybe it's your final resolution, cuz no matter what happens, it's gonna be appealed and it may go up to the Supreme Court. We'll, we'll, we'll see what, what ends up happening there. But there's gonna be an initial ruling. You also have the National Labor Relations Board, which handles labor disputes has flat out said last week, Hey, we're going to investigate USC and.

Uh, what not just whether a football and basketball player should be considered employees at U usc, but across all of the ncaa something that would, it would have jurisdiction over everybody, and that's not gonna reach a final resolution in 2023. But the initial hearings are gonna happen in March. They're gonna be appealed and that process is gonna continue. So, I, I say this here, it is unlikely the NCAA wins both of those.

So there is a real chance that by in, in the next two years, The federal court system one way or the other is gonna say, athletes should be employees and you need to pay them directly. And we cannot continue this pretend game of amateurism we've been doing for 160 years. And the only thing that can stop that would be either winning every single court case, which after Austen, I don't think you can do anymore.

or you get Congress to pass an antitrust exemption and some other additional bill to legally protect college athletics from being stewed all the time. And that's what the NCAA has been pushing for. That's why they just hired a, a politician to be their next president and it hasn't worked. And that's not a Democrat or Republican thing. It's people from both parties have said, we're not interested in doing that right now.

Maybe that changes, maybe that changes after a court says you're all employees. I don't, I don't know. But these are not academic things. And guys, if we have, if we legally move to professionalization, this n i l stuff doesn't matter anymore, man. Like, it's not like there's a, a booster group that's raising money for the Boston Red Sox to try to go help, like, get people to, to, to get endorsement deals so they can sign a new second basement, or the Celtics aren't doing that, man.

They gotta collect a bargaining agreement for that. And I think that's what's going to. If we move to a professionalized system, a lot of this N I L esoterica is, most of it's gonna disappear cuz it's gonna be governed by employment contracts.

So if it goes to an area where athletes are considered employees, there's a lot of schools that, where is that money gonna come? What does that look like? Is there a minimum wage? Obviously there CBAs for different levels of sports or different conferences. I mean, I don't even know where this thing would start.

And, um, that would, the, a college football player union would. One of the youngest and most transient in the entire world. And like I, I've worked in labor organizing a little bit. Like guys, that's really hard to do. There's a reason that like, not every McDonald's is unionized. That's a difficult force to, to organize and kind of get and,

The, the N F L players don't have that. There's no reason that facilities have to be built up the same, like in a way that exceed. The professional level in a lot of different places.

There's no reason for college coaches, not just not just head coaches, but coordinators, position coaches, strength coaches, always other people to be making north of $800,000, even in the Sunbelt for some of these things, like you're gonna have to reallocate some of that money to the athletes at a place like ODU U or a place like James Madison or a place like Marsh. Um, that becomes more complicated.

And, and I don't, I mean, without looking at their books, I, I don't, I don't know the exact answer. I think it's pretty safe to say if we move to a professionalization model, will O D U be able to pay, pay the same salaries, not for the same benefits as Virginia? Probably not. But ODU doesn't do the same thing for, for professors, they don't do the same thing.

Almost assuredly for professional staffers, if I was a.net developer at ODU U, I'd probably make more money At Virginia, Virginia Tech and ODU U can still function just fine and, and Radford can still function just fine. And there's, there's a way, there's a way that, that you could do it. But those are the details that are gonna be decided by courts and politicians and labor organizers and folks. we don't know.

And, and this, this would be like my plea on the off chance that, you know, any, any adss or any outside councils listening to this, like, you don't have to tell me what you're gonna do, but like, you gotta have a binder that explains what your 30, 60, 9120 day deal, uh, plan is in a professionalized world for Old Dominion Athletics. Because that's not just a fun hypothetical thought exercise. Like that is a thing that could.

And it could happen while, like before all the athletes on this football team graduate.

Um, I don't know, I don't know off top head if people at O D U are on the paid list, but, but administrators at Sunbelt institutions, um, a and across multiple sports are so, you know, if it's good enough for them, it might be good enough for you guys. Uh, if you wanna really kind of get in the weeds of what's going.