January 14, 2022
In August of 2021, BYU announced it had structured a whole-team NIL deal with Built Bar, a protein bar company that would allow scholarship players to receive $1,000 for representing the company, while also paying non-scholarship athletes a stipend, up to the entire cost of tuition (See GF Sports Advisors’ prior blog post on this topic, NIL Blog Post: How blurred are the lines). A month earlier, the University of Miami structured a whole-team NIL deal with a local gym, where all 90 scholarship players could earn up to $500 a month for promoting the gym via social media and personal appearances. Many observers thought these deals violated the NCAA’s pay-for-play policies at the time, and now the NCAA has launched an investigation into BYU and Miami, as well as other universities with similar NIL deals.
BYU Associate Athletic Director Jon McBride told ESPN that, “we have communicated with the NCAA concerning the Built Bar NIL arrangement [and] they have informed us they do not have any additional questions at this time. We will continue to monitor and abide by the NCAA interim NIL policy.” Officials from the University of Miami have declined to comment on the investigation.
WHOLE-TEAM NIL DEALS
As universities are still dealing with patchwork NIL regulations across the country, whole-team NIL deals such as BYU and Miami’s beg the question: at what point do these types of deals become pay-for-play or improper recruiting inducements? Some commentors suggest the line is paper thin.
Erin Butcher, a higher education attorney in Ohio, believes the NCAA is interested in “whether [group deals] are going to give a school an advantage over other schools.” Specifically, whether student-athletes are “going to want to come to a school because they’re getting paid to participate,” rather than another school without a lucrative NIL deal.
Thilo Kunkel, a professor and director of the Sport Industry Research Center at Temple University, believes that the NCAA’s probe into NIL deals “is already sending a signal to universities that have been thinking about group deals to make sure you have your legal ducks in a row before you actually sign something.”
Patrick Stubblefield, a sports attorney in Utah and a former college compliance official echoed Kunkel’s warning, advising that “colleges should hire outside counsel to help navigate these gray areas and to ask questions of the NCAA prior to signing agreements.”
INSIGHTS FOR GF CLIENTS
- Now more than ever, it is important to understand your states’ NIL legislation, or lack thereof, in states such as Idaho.
- GF Sports Advisors will work directly with student-athletes and university compliance departments to ensure that NIL deals are compliant with NCAA rules.
Please contact a Gjording Fouser lawyer at 208.336.9777 if you would like any additional information about this topic or any other issues facing your company.