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IU chooses to lean into upcoming NIL changes

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IU chooses to lean into upcoming NIL changes

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In his first couple of months as Indiana’s athletic director, Scott Dolson had one very big challenge on his plate.

A once-in-a-century event, a global pandemic, was wreaking havoc on college athletics. Budgets were in flux. Testing brought teams to a halt. One week, the Big Ten wasn’t playing football. The next, it was.

Every day was a new challenge, but Dolson didn’t want to allow one very big challenge to block his sights from another. It’s expected that in 2021 the NCAA will adopt rules allowing student-athletes to profit off of their name, image, and likeness (NIL). An historic event, in itself, for the leaders of amateur sport.

“We don’t want to get so wrapped up in dealing with the day-to-day crisis,” Dolson said, “that we lose sight of a vision for the future.”

As with the pandemic, what’s ahead with NIL isn’t altogether clear. But IU has started to plan ahead, contracting with a sports tech company, Opendorse, to train its athletes on how to maximize their NIL value. The department has also assembled a task force to start hashing out what avenues might exist for student-athletes to earn NIL money and how they can make the most of it.

There are certainly worries about what NIL will mean, especially how boosters and agents and others may try to gain influence as money flows into athletes’ hands. IU football coach Tom Allen, cautioning that he doesn’t really know the full extent of what’s coming, did admit to some trepidation.

“They specifically have stated they don’t want it to be affecting recruiting. I’m like, that’s hard. How can you say that?” Allen said. “It’s going to be hard for that not to. But that’s what they want.

“Just the whole booster involvement with players, that’s a pretty dicey line. I can see that being blurred and being skewed pretty easily. That’s what makes me nervous.”

Why is NIL an issue?

A push from state politicians brought NIL to the fore.

Colorado and California passed and signed bills allowing student-athletes to make money off of their name, image, and likeness, though those NIL laws won’t go into effect until 2023. In July, Florida governor Ron DeSantis signed a NIL bill that is effective July 2021.

Amateur athletes will suddenly be able to earn money from their fame, though it could be argued that it’s past time for that. Television converted football and men’s basketball into a billions-of-dollar industry. Coaches get seven-figure contracts. UCLA’s Ed O’Bannon famously saw his likeness in the NCAA college basketball video game and wondered why he wasn’t receiving any of the profits.

“To be fair to the colleges, they don’t want people to be bribed,” said Ken Dau-Schmidt, a nationally recognized scholar on labor law and a professor at IU’s Maurer School of Law. “They didn’t mean to set this situation up. In some ways, it’s their success that has made this untenable.”

The discrepancy was just waiting to be called out. In 2014, the regional director of the National Labor Relations Board in Chicago ruled Northwestern football players could be considered employees based on the “right-to-control test.” Their lives were so dictated by their sport. Plus, football brought in massive dollars to the university.

While the full board declined to assert jurisdiction, the regional director’s ruling was a major statement.

“In Jurassic Park, Jeff Goldblum, he says ‘Life finds a way.’ In economics, money finds a way,” Dau-Schmidt said. “It used to be easy to argue, yes, these athletes are amateurs. But now, there is so much money in basketball and football for the Power 5 conferences.”

NIL will at least give athletes a greater share.

But to avoid a situation where some states allow NIL payments and others don’t, the NCAA is working with Congress to achieve a national solution. And universities want certain conditions. They want an exemption from antitrust lawsuits. They want “guardrails” to protect from NIL recruiting inducements. And they most definitely want it made clear that athletes are not university employees, because unionization, a minimum wage, worker’s compensation — these are all things the NCAA’s current model can’t sustain, particularly with Olympic sports funded by football and basketball.

As far as NIL payments, the NCAA wants its universities to be as detached from the process as possible. Hence, Opendorse, which will be IU’s third-party liaison between athletes and businesses. Until paid endorsements are allowed, Opendorse’s mission is just to train IU’s athletes on how to grow their brands.

“If the local sandwich shop calls the school and asks for access to a student-athlete, they have to hang up the phone. They can’t be involved,” Blake Lawrence, the CEO of Opendorse, said. “So how does the local sandwich shop get access to the student-athlete? That’s the question.”

What will NIL entail?

What will and won’t be allowed isn’t set in stone. Will it just be IU athletes tweeting paid praise for the local sandwich shop via Opendorse? Or will they also be signing autographs at and shooting commercials for said shop?

Lawrence, once a linebacker at Nebraska, who started Opendorse with ex-Husker kicker Adi Kulanic, obviously believes his company can provide the go-between in most facets. Opendorse has been involved in college athletics for a handful of years, managing recruiting and marketing posts for programs, as well as helping current and former athletes polish their social media profiles.

But student-athletes have never had access to the second half of the platform — the paid endorsement part — which has been linking pro athletes with businesses that want a quick shoutout online. Lawrence remembers the very first tweet his former college teammate, NFL corner Prince Amukamara, sent out on the platform, asking followers to visit Husker Auto Group to meet the business’s new manager. It’s a $1,000 tweet that a college athlete could have easily put out. Rules just didn’t allow it.

The question is whether Opendorse can do more than post advertisements to athletes’ Twitter and Instagram profiles.

“In the next year, we are adding offline endorsements to our technology so that a local business can come in and book not only a tweet but also an appearance or an autograph signing or set up a commercial shoot,” Lawrence said. “In the college space, we believe 99 percent of college athletes won’t have a manager or a rep or a publicist helping them, and the school can’t help them coordinate any of these offline endorsements.

“Adi and I, as former student-athletes, we are sitting here and saying ‘Why not us?’”

Any transaction that occurs via Opendorse, Lawrence expects the school’s compliance office, along with the school’s conference and the NCAA, will be notified. As far as who will curb the influence of boosters in the NIL space, lawmakers are still trying to provide answers.

Rep. Anthony Gonzalez, the former Ohio State football player, has co-authored a bill banning boosters from making NIL payments, and it tasks the Federal Trade Commission with enforcing the rules.

Even if the FTC can effectively root out those who would pour money into an athlete’s pocket to attend a specific school, there is no getting around the recruiting advantages some universities will have over others. Will athletes head to bigger, richer college towns because there are more businesses to pay out endorsements? Will hometown heroes stay close to home, where their name has more impact? 

Who knows how it will shake out, but Lawrence envisions payments being publicly reported, like how public universities disclose their expenses and revenues each fiscal year. Over time, that will give recruits an idea of what each market can offer in NIL pay.

“You can say ‘We are planning on selling out every game’ … but once the stadium is open and the seats are half-filled, the truth comes out,” Lawrence said. “With NIL right now, we are in the Wild Wild West. We don’t know what is real and what’s not. But in the not-so-distant future, this will be one of those things a student-athlete knows, the minute they step on campus, what is their earning potential at one school or another.”

What is NIL worth?

Right now, the prevailing thought is basketball and football players will have the best chance at capturing NIL dollars, just based on their followings.

In a random sampling of nine IU athletes, Opendorse estimated sophomore forward Trayce Jackson-Davis, with around 47,000 combined Twitter and Instagram followers, could pull in the most in NIL endorsement money, nearly $25,000 each year. For comparison, senior guard Al Durham has about 25,000 followers and can earn about $13,000 on the platform, according to Opendorse.

The individual accolades an athlete has won, and the prestige of a sport at each school, factors into the calculation. So basketball has more brand value at IU than football. Still, Opendorse believes IU wideout Whop Philyor can make around $15,000 directing endorsements to his 33,000 followers. Safety Jamar Johnson can claim around $9,000 with his audience of 22,000.

Most athletes from non-revenue sports tend to have smaller followings, and it bears itself out in their earning potential. Opendorse projects just $173 a year for baseball’s Grant Richardson, $43 for volleyball’s Breana Edwards, and $37 for swimming’s Michael Brinegar.

But the revenue and non-revenue distinction isn’t a hard-and-fast rule. One of IU’s more famous athletes of the last decade was gold-medalist Lilly King. At Oregon, it’s a softball player, Haley Cruse, who has attracted hundreds of thousands of followers with her dance videos.

According to FiveThirtyEight.com, Cruse could earn more than $100,000 a year as an “influencer.” UConn women’s basketball’s Paige Bueckers could make $700,000.

IU women’s basketball’s representative in the Opendorse sample, Ali Patberg, could generate $8,815 in NIL revenue with her 10,740 followers on Instagram and Twitter.

“The old ‘gatekeepers’ model of media was dependent on there only being so much space in this sports section or only so many minutes in a newscast to talk about these things, and people must not care about these other sports. I think we’ve realized that’s not true,” said Galen Clavio, director of the National Sports Journalism Center, who wrote a book titled Social Media and Sports.

“We are going to see a democratization across men’s and women’s sports, revenue and non-revenue sports, Olympic sports, because some of these personalities are going to come to the forefront.”

Clavio, one of the members of IU’s NIL task force, has a hopeful view for what college athletes can earn in a freer market. While there are concerns that shady characters may find a way to use this system for their ends, it’s not like NCAA rules and sanctions have completely shut them out to this point. College athletics has value, and this will just allow athletes to capture something additional to their scholarships.

How will it all play out? Nobody is quite sure, including Dolson. But that’s why IU is trying to learn all it can, gathering experts like Clavio, as well as assistant coaches and compliance officers, to discuss potential issues as part of the task force. Change is coming, whether everyone in college athletics wants it or not.

“We just have to be ready,” Dolson said. “College athletics is changing, it’s modernizing in so many ways, and you can either look at it as ‘I wish it was back in the old days’ … or you can look at it as ‘Hey, it’s an opportunity.’ It’s an opportunity for us to grow, and to make certain we are on the forefront of it, and as aggressive as we can be, and that’s the road we have chosen.”

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