TAM NIL amounts revealed

[Clonehomer]

Out-of-state, it would about triple it. I wonder if that amount includes the free car usage that has been brought up pertaining to players like CJ Stroud. He has the right to exchange his luxury automobile every 45 days with some car dealership. Currently, he's driving a $200,000 Mercedes G Wagon.

Wonder how taxes work on a deal like that? Trump Org CFO seems to be in a lot of trouble for non-reported benefits like that.

 

[cydsho]

Wonder how taxes work on a deal like that? Trump Org CFO seems to be in a lot of trouble for non-reported benefits like that.

For all the bad stuff that has happened and happens in college football, it will be the US tax code that will bring it down.

 

[Antihawk240]

For all the bad stuff that has happened and happens in college football, it will be the US tax code that will bring it down.

I could be exaggerating but:
Isn't that how it works in blue collar crimes? The law will turn a blind eye knowing the IRS will put the suspect away for 10 years for tax evasion? Isn't that how Al Capone ended up in jail? Couldn't bust him for mafia stuff, but the IRS got a hold of him.

Maybe that is what the NCAA expects and know is coming: let the wild west occur for 3-4 years, the IRS will come in with the a thunder hammer and universities will come crawling back begging for governing protection.

Again, I could be exaggerating.

 

[Mr Janny]

For all the bad stuff that has happened and happens in college football, it will be the US tax code that will bring it down.

I doubt it. If an athlete fails to pay taxes on a NIL deal, the penalty would only affect that athlete, not the entire practice of NIL.

 

[Antihawk240]

I doubt it. If an athlete fails to pay taxes on a NIL deal, the penalty would only affect that athlete, not the entire practice of NIL.

I'm envisioning more crack down on the boosters who think they are writing million dollar checks to a 501c3 and writing it off as "advertising" or "50% meals and meetings" At some point the IRS is going to get upset which will eventually find a small crack to go after the University who didnt follow procedures 100% as advised by their accounting firms.

 

[cymonw1980]

That is a crazy amount of money for a college FB team that is supposed to be "amateur." By comparison the total payroll for the lowest paid MLB team this year the Baltimore Orioles is about $43.8 mil so tOSU would be paying nearly a third of what a professional baseball team is paying in salaries.

I hope you are right that donors will grow tired of spending money on NIL and these numbers start to fall significantly. I just don't see value in paying 18-22 amateurs especially in college FB where it's already been rigged to mostly favor about a handful of programs most years. The playoff expansion could possibly increase the money going into this with now 12 spots up for grabs more programs will feel they have a legit shot to get in now much like how baseball expanded its playoffs and it's made the trade deadline less chaotic with more teams still in buyer status than sellers than in the past.

These "amateur" athletes drive $B's in revenue for their athletic departments and free marketing dollars for their schools. There was a piece in the Athletic that discussed nick saban's salary and pointed out how he was under paid given how much incremental revenue was driven by increased interest in the university from out of state students after he started to win national titles there (increases in applications from out of state students and increase in % of out of state vs. instate students). They did not mention the athletic revenues a single time in the article because it was clear the athletics were having a significant impact providing FREE marketing for the school and driving huge increases in total tuition dollars by increasing out of state student enrollment.

These are not "amateurs" who have no value and should be happy to get whatever they are given. These young men and women, along with the university athletic programs they represent, drive SIGNIFICANT value for both the athletic daprtments and universities as a whole.

Another example is UConn, UCF, Cincinnati, Houston, and many PAC 12 schools who regularly augment their athletic budgets given the limited TV dollars that they receive relative to the other P5 universities (NOTE: this could be required for p3 to keep up with P2).

For example, UConn was left behind when the Big East fell apart and began to fall significantly behind in terms of TV revenue. In the Big East, UConn was within about $6M-$7M of the ACC prior to the 2012. When they joined the AAC, they fell behind the ACC by $30M+/yr in media revenues (about a $24M increased gap). To make up for this, funding from the school and student fees increased by over $20M / yr (similar to the increased TV revenue gap of around $23M-$24M).

Why would the schools do this? Athletics is a valuable marketing tool for the universities. On top of this, it is a REVENUE stream for them.... How do schools make money? One KEY revenue source is tuition. The "Scholarships" that are "given" to these athletes are paid for by ... the ATHLETIC DEPT NOT THE UNIVERSITY... where does the athletic dept get the money? Tickets, TV revenues, etc. ... basically, these "scholarships" are a way for schools to transfer money from the tv deals and ticket sales to the university's academic side. So, along with funding all the athletic programs that do not make money, paying coaching salaries and new facilities (owned by the university), these athletes also bring in the dollars that PAY FOR THEIR TUITION.


You brought up MLB vs. CFB... let's look at it.

Quick google search shows that MLB TV revenues are "at least" $100M per team. Some are worth more... (see link below)

30 teams x 100M = $3B
30 teams x 150M = $4.5B

So, roughly $4B - $4.5B range.

College athletics, driven by CFB is expected to bring in $2.8B in 2022 (and about to go up significantly - likely $1B just for the expanded playoff and even more for next round of tv deals like the b10's).

So, looking at TV numbers, in 2022 the gap is about $43M / P5 school vs. $130M-$150M / MLB team...

$43M/$140M = 31%, so college tv money is about 31% of MLB money.
$13M / $43M = 30% , so highest NIL is around $13M or 30% of the LOWEST MLB payroll.... so, it appears CFB players are under paid.


MLB:

MLB Teams Will Receive At Least $100 Million Annually From TV Rights Contracts

MLB's TV deals with ESPN and Turner Sports will begin in 2022 and combined with local deals, each club will get at least $100 million.

dodgerblue.com

CFB:

Navigate projects SEC/Big Ten per-school payouts $40-50 million ahead of rest of P5 by 2026

The gap between the Big Ten and SEC and the rest of the Power Five is set to widen even with new deals, per research firm Navigate.

awfulannouncing.com

 

[Mr Janny]

I'm envisioning more crack down on the boosters who think they are writing million dollar checks to a 501c3 and writing it off as "advertising" or "50% meals and meetings" At some point the IRS is going to get upset which will eventually find a small crack to go after the University who didnt follow procedures 100% as advised by their accounting firms.

And if that happens, it will be one university that gets hit. The others will see what transpires and adjust their practices accordingly.

 

[cydsho]

I doubt it. If an athlete fails to pay taxes on a NIL deal, the penalty would only affect that athlete, not the entire practice of NIL.

Yeah true. You know the players will get thrown under the bus before anyone higher up.

 

[cayin]

$3.3 million for the entire football team? That honestly seems lower than I thought it would be. That's less than $40k per scholarship player. Obviously it's not evenly distributed, like that, but I guess I was expecting it to be more.

didn't Tennessee pay 8 mil for one player alone?

 

[cayin]

Everybody should watch Pony Express ESPN doc on SMU, it’s on Disney plus and espn plus I think.

It’s mind blowing in the context of NIL making everything they did perfectly legal, but also that the SWC was legitimately a top conference. Just shows how the landscape changes. Even in the 80s winning the SWC was a big deal. I doubt Houston/Cincy is hyper focused on an American title but rather a marquee bowl or cfp bid these past few years.

The SWC was a power house back in the 60s, 70s and early 80s.

 

[Paddythefatty]

If Ryan Day says tOSU needs 13mil, there’s absolutely no way aTm is only at 3-4mil. Far too many players numbers hover north of 500k. Projections on here had Midwest schools at 2-5 so no way

 

[Clonehomer]

I'm envisioning more crack down on the boosters who think they are writing million dollar checks to a 501c3 and writing it off as "advertising" or "50% meals and meetings" At some point the IRS is going to get upset which will eventually find a small crack to go after the University who didnt follow procedures 100% as advised by their accounting firms.

But the NIL deals aren't run through the universities. Certainly, the non-profit status of these funds will be brought into question, but there seems to have been a purposeful separation that'll protect the schools.

 

[Clonehomer]

didn't Tennessee pay 8 mil for one player alone?

Probably, but the cash payments are easy to figure out. They'll have accountants helping with that part. It's other benefits that I think are going to get athletes in trouble. Being lent a $200,000 car is a taxable benefit. If these athletes take these for granted and don't report this, it's going to come back and bite some of them

 

[Antihawk240]

But the NIL deals aren't run through the universities. Certainly, the non-profit status of these funds will be brought into question, but there seems to have been a purposeful separation that'll protect the schools.

That's what I'm saying. At some point a leak in the wall will occur and the IRS will find away to get back millions and millions in loss revenue. What was thought to be a 501c3 will eventually get a crack and the wall will break and here comes the flood. Again, I may be exaggerating, but I do believe the IRS will be the ones who put a stop to the NIL. Whether its them going after the athlete, non profit, or finding a way to get to the University. Meanwhile the NCAA will be sitting there saying "I told you so." I'm not saying its not a crazy conspiracy. I'm saying it might not be all that unrealistic.

 

[Mr Janny]

That's what I'm saying. At some point a leak in the wall will occur and the IRS will find away to get back millions and millions in loss revenue. What was thought to be a 501c3 will eventually get a crack and the wall will break and here comes the flood. Again, I may be exaggerating, but I do believe the IRS will be the ones who put a stop to the NIL. Whether its them going after the athlete, non profit, or finding a way to get to the University. Meanwhile the NCAA will be sitting there saying "I told you so." I'm not saying its not a crazy conspiracy. I'm saying it might not be all that unrealistic.

The thing of it is that the 501c3 did not come into existence overnight. Using them for athletic NIL deals may be new, but they've been around for a long time, and for dollar amounts much higher than what college sports encompasses. There's years and years of precedent surrounding them, aka not uncharted waters. Organizations like the Red Cross and the United Way have had paid celebrity spokespeople before. Athletic NIL collectives wouldn't be treated any different from a tax standpoint. And they're small, small potatoes compared to the rest of the 501c3 landscape. I doubt this is the straw that breaks the camel's back and gets the IRS to come upset the apple cart.

 

[theshadow]

Texas A&M boosters bought Eric Dickerson a Camaro and he still didn't commit there.

Expert-level troll job here:

 

[Antihawk240]

The thing of it is that the 501c3 did not come into existence overnight. Using them for athletic NIL deals may be new, but they've been around for a long time, and for dollar amounts much higher than what college sports encompasses. There's years and years of precedent surrounding them, aka not uncharted waters. Organizations like the Red Cross and the United Way have had paid celebrity spokespeople before. Athletic NIL collectives wouldn't be treated any different from a tax standpoint. And they're small, small potatoes compared to the rest of the 501c3 landscape. I doubt this is the straw that breaks the camel's back and gets the IRS to come upset the apple cart.

You are absolutely correct. Spot on. 501c3's have been created as means to support charity. Research, Support, Foundations, etc etc. When the true principle of the 501c3 protection and benefits get exploited so an 18 year old can drive a $200,000 sports car or a University can win a National Championship that is when I think someone high enough will kick and turn over that apple cart. We are hearing insane things now that the cat is out of the bag and there are just too bright of spot lights getting turned on. Meanwhile a large booster will write it off as advertising and a business expense. The IRS would be willing to turn a blind eye to a donation to a celebrity helping the United Way. But to think they are going to turn around when they see a teenager in a new car every week just so School A wins a football game. I may be wrong. I just think things got too big, too quick and unfortunately way too loud.

 

[AuH2O]

Pony Express is a very good watch. Schools paying for players, in one form or another, has been rampant for a long, long time. NIL just made it so people couldn't continue pretending that it wasn't.

The fact that it existed no one denies. But the argument that it isn't going to make a massive difference that some people make on the basis of "it was happening before, now it's just out in the open" is pretty asinine.

When you look at the "alleged" dollars attached to previous improper benefits, as a whole they are completely dwarfed by what's being paid now.

So being against the rules didn't stop it, but it apparently was a massive deterrent. I guess it makes sense, the more money the harder to be discrete.

 

[AuH2O]

Paying players an average of $40k a year for their time and efforts on a college football team is quite honestly a bargain.

For some players it's a huge bargain. But by the time you account for all the costs - tuition, room and board, tutors, clothes, insurance, travel, etc. a lot of players are a MASSIVE cost to a university. And you can say the 4th TE practices and provides value to the program, and that is correct. But you could replace them with a lot of people or even just have an unfilled scholarship and roster spot and the value to the program doesn't change at all.

I would say that $3-4 M/year for football players is a pretty good bargain still, even at a place like ISU. You have to figure there's that much left after expenses if you ran the athletic department really efficiently.

The flip side is that the University name contributes significantly to some athletes' NIL value. But that part is impossible to really quantify. So I think running your AD really tight, providing some "profit sharing" with your athletes and letting them earn legit NIL, understanding your AD may be contributing to that value is the way to operate. Well, at least when the explicit pay to play happens.

 

[AuH2O]

These "amateur" athletes drive $B's in revenue for their athletic departments and free marketing dollars for their schools. There was a piece in the Athletic that discussed nick saban's salary and pointed out how he was under paid given how much incremental revenue was driven by increased interest in the university from out of state students after he started to win national titles there (increases in applications from out of state students and increase in % of out of state vs. instate students). They did not mention the athletic revenues a single time in the article because it was clear the athletics were having a significant impact providing FREE marketing for the school and driving huge increases in total tuition dollars by increasing out of state student enrollment.

These are not "amateurs" who have no value and should be happy to get whatever they are given. These young men and women, along with the university athletic programs they represent, drive SIGNIFICANT value for both the athletic daprtments and universities as a whole.

Another example is UConn, UCF, Cincinnati, Houston, and many PAC 12 schools who regularly augment their athletic budgets given the limited TV dollars that they receive relative to the other P5 universities (NOTE: this could be required for p3 to keep up with P2).

For example, UConn was left behind when the Big East fell apart and began to fall significantly behind in terms of TV revenue. In the Big East, UConn was within about $6M-$7M of the ACC prior to the 2012. When they joined the AAC, they fell behind the ACC by $30M+/yr in media revenues (about a $24M increased gap). To make up for this, funding from the school and student fees increased by over $20M / yr (similar to the increased TV revenue gap of around $23M-$24M).

Why would the schools do this? Athletics is a valuable marketing tool for the universities. On top of this, it is a REVENUE stream for them.... How do schools make money? One KEY revenue source is tuition. The "Scholarships" that are "given" to these athletes are paid for by ... the ATHLETIC DEPT NOT THE UNIVERSITY... where does the athletic dept get the money? Tickets, TV revenues, etc. ... basically, these "scholarships" are a way for schools to transfer money from the tv deals and ticket sales to the university's academic side. So, along with funding all the athletic programs that do not make money, paying coaching salaries and new facilities (owned by the university), these athletes also bring in the dollars that PAY FOR THEIR TUITION.


You brought up MLB vs. CFB... let's look at it.

Quick google search shows that MLB TV revenues are "at least" $100M per team. Some are worth more... (see link below)

30 teams x 100M = $3B
30 teams x 150M = $4.5B

So, roughly $4B - $4.5B range.

College athletics, driven by CFB is expected to bring in $2.8B in 2022 (and about to go up significantly - likely $1B just for the expanded playoff and even more for next round of tv deals like the b10's).

So, looking at TV numbers, in 2022 the gap is about $43M / P5 school vs. $130M-$150M / MLB team...

$43M/$140M = 31%, so college tv money is about 31% of MLB money.
$13M / $43M = 30% , so highest NIL is around $13M or 30% of the LOWEST MLB payroll.... so, it appears CFB players are under paid.


MLB:

MLB Teams Will Receive At Least $100 Million Annually From TV Rights Contracts

MLB's TV deals with ESPN and Turner Sports will begin in 2022 and combined with local deals, each club will get at least $100 million.

dodgerblue.com

CFB:

Navigate projects SEC/Big Ten per-school payouts $40-50 million ahead of rest of P5 by 2026

The gap between the Big Ten and SEC and the rest of the Power Five is set to widen even with new deals, per research firm Navigate.

awfulannouncing.com

Sports fans and sports writers dramatically overstate and credit the value of sports to a university and credit enrollment.

I'm sure that Alabama's football success has a big impact on enrollment, but...
- I picked a random southern school in Georgia Tech, and despite going the other direction in football, over the past couple decades have grown faster
- Looking at enrollment trends at schools in general, there is typically no to weak correlation to football success, regardless of what lag you put on it.
- Alabama also is far and away the most extreme example of a school's identity being so thoroughly dominated by football.

Athletics revenues are typically a very small portion of an overall university's revenues. Usually <5%. So naturally people really into CFB want to attribute a large increase in enrollment in tuition to CFB. But when you look across CFB, that analysis just doesn't hold up. It certainly helps, and it's a great marketing tool that some schools definitely benefit from. But for most schools macro factors like job markets and regional/state demographic shifts correlate way better.