Keeping schools out of NIL dealings opened the door for boosters  

By trying to limit how much schools can help college athletes cashing in on their fame, the NCAA seems to have inadvertently opened the door for boosters to get a foothold in a burgeoning market.

Now, as the NCAA and its highest-profile Division I member schools try to rein in booster-fueled organizations known as collectives, part of the solution could be taking down the firewalls between athletic departments and athletes when it comes to name, image and likeness compensation.

Earlier this week, the NCAA handed down guidance that made clear that collectives should be treated as boosters, which means they should not be contacting recruits and influencing where they go to school. Boosters can, however, be involved in NIL deals with athletes after they have enrolled.

The latest guidance was developed by a group of college sports administrators that included Ohio State Athletic Director Gene Smith.

“The primary concern was exactly what has emerged. It is the recruiting space,” Smith says. “We’ve got to focus on the front door.”

Smith earlier helped craft a plan to regulate NIL compensation that was never implemented by the NCAA. That 31-page report released in April 2020 was dominated by the idea that schools should not be involved in NIL transactions amid pay-for-play concerns and fears it would eventually lead to student-athletes looking more like employees. 

That hands-off tone was reflected in many of the more than two dozen state NIL laws, including the one in Florida where schools are barred from any involvement in outside compensation for athletes. What has emerged is collectives filling the role of deal-maker and boosters operating with little or no accountability and oversight beyond the honor system.

Louisiana and Missouri are currently trying to rework their state NIL laws to allow schools, and even coaches, to be more involved in how athletes are compensated.

If that happens, they will be talking with collectives that do not all operate the same way. Some are being set up to engage a university’s supporters and alumni more broadly, but others are funded and operated by smaller groups of wealthy boosters.

“So the majority of collectives currently existing are being run by alumni … boosters, people that were previous donors to the university,” says attorney Jason Belzer, whose company, Student-Athlete NIL, is managing collectives at Penn State and Rutgers. “And I think the best way to describe it is like a money laundering machine: ‘How do we get as much dollars into the pockets of student-athletes as we can without actually having them deliver any real value in return?’” Read more.