JUST PLAIN TALK: Christmas comes early for college athletes
For the first time in history, collegiate athletes can get paid if a company chooses to use their name, image, or likeness (NIL). Historically, the National Collegiate Athletic Association (NCAA) prohibited athletes from compensation outside of room and board, meals, and minor miscellaneous expenses. However, the NCAA rules allowed them to maintain the façade of amateurism. Still, the sham was challenging to maintain with coaches' salaries well into seven digits and assuredly headed higher.
At the stroke of midnight on July 1, Antwan Owen, a Jackson State defensive end, signed a deal with Three Kings Grooming, a hair products company catering to black men and women. A dizzying number of product promotions have followed. Bo Nix, at Auburn, hawked a sweet tea. Georgia quarterback Brock Vandergriff cut a deal with an Atlanta men's apparel company despite being buried on the depth chart. His teammate, Kendall Milton, launched his own brand and sold T-shirts with his logo. Given the popularity of online gaming, thousands of athletes signed with Yolk Gaming, a company with an app that allows fans to pay to play video games with them.
Some of the stories are heart-warming. For example, Jared Casey decided to walk on and play football without a scholarship at Kansas. After Casey, number 47, caught a two-point conversion to upset the Texas Longhorns, Applebee's cleverly used him in promoting a two-for-one special, "You always gotta go for two." Another number 47 and walk-on, Georgia defensive back Dan Jackson teamed up with Peach State Bank and Trust as part of a billboard advertising program.
While these are nice stores, maybe an example of feel-good capitalism, Mike Finger of San Antonio Express-News reminds us that college football is hardly wholesome and an "enterprise in obscene spending." For years, the blowback against athletes getting paid was most sports programs lose money. So, the argument went, if football and basketball players got paid, non-revenue producing programs would suffer. NIL deals offer a way to negate that argument. However, NIL deals aren't a panacea, and potential problems loom.
Beginning next August, every offense lineman on scholarship at the University of Texas will receive $50,000. Interestingly, the money is part of a non-profit, "Horns with Heart," where the players use their names, images, and likenesses to promote various charitable causes. The anonymous donors who funded the non-profit did a savvy job of tax planning; kudos to them and their advisors. But you have to wonder if the charities would have been better served without the middlemen.
I have zero problems with men and women athletes getting paid. Let's be honest. Athletes have been getting paid for decades. Whatever players can finagle, it's dwarfed by coaches' salaries. Heck, over $500 million is going to fired coaches this year. NIL deals are ripe for chicanery so regulation is essential. But the players didn’t start any grift; they’re getting their share.
You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.