If you've followed the House case settlement saga, one aspect of this is reining in NIL by subjecting all NIL deals to review by a clearinghouse which will determine whether or not the deals are for fair market value. Wall Street Journal article today talks about the Texas Tech softball pitcher who transferred for a $1 million NIL deal.

WSJ (paywall)

Quote:

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She's Softball's First $1 Million Pitcherand She Could Be the Last

NiJaree Canady's transfer from Stanford landed her a seven-figure payday and has Texas Tech in an NCAA softball super regional. But lucrative deals like hers could soon be doomed.

* * *

If and when Judge Claudia Wilken approves a settlement to a consolidation of three antitrust lawsuits brought by athletes against the major conferences and the NCAA, two big shifts are set to take place. First, each college athletic department will be allowed to share about $20 million of its annual revenues with athletes. But roughly 90% of that money is expected to go to the marquee sports of football and men's basketballleaving scraps for sports like softball.

Second, outside deals for athletes to profit from their name, image or likeness (NIL) would begin to go through a new clearinghouse built with help from Deloitte and overseen by a new entity set up to enforce the rules enacted by the settlement.

In that clearinghouse, deals by major companies like Nike or State Farm are likely to pass muster, said someone familiar with a committee set up by the Power 5 conferences and NCAA to implement the settlement. Deals like Canady's, funded primarily by booster collectives, are not.

"Booster deals are going to be more difficult to pass," the person familiar said, adding: "The system is set up to not allow third parties to pay for play."

* * *

The NIL clearinghouse won't preclude athletes like Canady from signing endorsement deals, but it will bring considerably more oversight. The organization will want to know, for instance, how a booster club can get $1 million of value in marketing from a player with a profile like Canady, who has 34,000 followers on Instagram but is hardly a household name.

Colleges' pot of revenue-sharing money won't be subject to such scrutiny, meanwhile, as long as schools stay under the $20.5 million limit. So an offensive lineman, anonymous as he may be, could receive $1 million directly from his school. But a star lacrosse player would be hard-pressed to gain approval for a $1 million outside of an NIL deal bankrolled by a wealthy alum.

Some in college sports say nixing such deals risks pushing booster money back under the tablewhere it was for decades.

For the moment, before the settlement is approved, athletes and booster collectives are scrambling to cut deals under the old regulations. The Matador Club has already signed Canady to a one-year extension worth another $1 million, according to a person familiar with the deal.

"Until we figure out xactly what they're going to let go on," Tracy Sellers said, "why not keep going?"

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Now to phase out the transfer portal

Phased out is false. More like refocused on Olympics style representation deals.

That $1M NIL deal for a softball pitcher....just set the fair market value for a top ranked softball player in my opinion. Cannot deny that...someone was willing to pay it so it was "fair" to them.

The Clearinghouse will never be allowed to rein this in. It is a colossal waste of time and money. Canady and Texas Tech are great examples actually. The idea that someone from Deloitte is going to be able to say that a billionaire from Texas Tech is not allowed to pay a player $1 million will never be upheld in court. Especially when a player could be deemed to have a much higher "allowable" fair value in a place like, just for example, Austin TX vs Lubbock TX.

In the professional ranks, free agents are not allowed to be woo'd by teams based on unreasonable endorsements that contribute to their compensation and are not subject to salary caps/luxury tax. But this is specifically because that has been negotiated by the players unions to be the case to attempt to ensure an even playing field. Who is negotiating on behalf of the next Canady? Also - this certainly doesn't stop big market teams from having a huge advantage in signing free agents. Shohei Ohtani is wildly more marketable in Los Angles than he would be in Kansas City. Same for Lebron in Los Angeles vs Cleveland.

If big market college teams are allowed to pay players more due to a made up fair market value determination, then teams from places like College Station will have trouble ever being competitive again. And our athletes will be hugely disadvantaged in their earnings power which is what these lawsuits are all about.

The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

There's no doubt that the clearinghouse will be challenged, but that will probably take some time. In the meantime, if that's the rule, then everyone will have to abide by it or risk NCAA sanctions (player ineligibility for starters).

I suspect that the clearinghouse will adopt some kind of rule to deal with local sponsorships, where if the figure is less than X (say, $10,000), and it's paid by a company which claims it as an advertising expense, they will probably just waive those on down the road. But booster collectives doing straight pay for play will not. Those deals are not Name, Image, and Likeness deals. They are pay for play contracts. That is not what was at stake in the O'Bannon suit, which was all about athletes like Livvy Dunne, or going way back, Jeremy Bloom, not being able to sign legitimate endorsement deals simply because they play an NCAA sport.

twk said:

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There's no doubt that the clearinghouse will be challenged, but that will probably take some time. In the meantime, if that's the rule, then everyone will have to abide by it or risk NCAA sanctions (player ineligibility for starters).

I suspect that the clearinghouse will adopt some kind of rule to deal with local sponsorships, where if the figure is less than X (say, $10,000), and it's paid by a company which claims it as an advertising expense, they will probably just waive those on down the road. But booster collectives doing straight pay for play will not. Those deals are not Name, Image, and Likeness deals. They are pay for play contracts. That is not what was at stake in the O'Bannon suit, which was all about athletes like Livvy Dunne, or going way back, Jeremy Bloom, not being able to sign legitimate endorsement deals simply because they play an NCAA sport.

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And just like in the past, some schools will get favorable rulings.

twk said:

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There's no doubt that the clearinghouse will be challenged, but that will probably take some time. In the meantime, if that's the rule, then everyone will have to abide by it or risk NCAA sanctions (player ineligibility for starters).

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I can give you a few schools that I am 100% confident will not be following the rules (that everyone knows will eventually be shut down). And these schools will not be sanctioned by the NCAA.

Unfortunately, A&M is not likely to be one of those schools.

NAL, but I'd be surprised if a clearinghouse, set up this way, survives any legal challenges. I doubt it would even be allowed to operate, as is.

Probably the first argument a player will make is, "How does a coach making $10 million a year bring that value back to the school when they have never won a national championship?"

twk said:

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If you've followed the House case settlement saga, one aspect of this is reining in NIL by subjecting all NIL deals to review by a clearinghouse which will determine whether or not the deals are for fair market value. Wall Street Journal article today talks about the Texas Tech softball pitcher who transferred for a $1 million NIL deal.

WSJ (paywall)

Quote:

---

She's Softball's First $1 Million Pitcherand She Could Be the Last

NiJaree Canady's transfer from Stanford landed her a seven-figure payday and has Texas Tech in an NCAA softball super regional. But lucrative deals like hers could soon be doomed.

* * *

If and when Judge Claudia Wilken approves a settlement to a consolidation of three antitrust lawsuits brought by athletes against the major conferences and the NCAA, two big shifts are set to take place. First, each college athletic department will be allowed to share about $20 million of its annual revenues with athletes. But roughly 90% of that money is expected to go to the marquee sports of football and men's basketballleaving scraps for sports like softball.

Second, outside deals for athletes to profit from their name, image or likeness (NIL) would begin to go through a new clearinghouse built with help from Deloitte and overseen by a new entity set up to enforce the rules enacted by the settlement.

In that clearinghouse, deals by major companies like Nike or State Farm are likely to pass muster, said someone familiar with a committee set up by the Power 5 conferences and NCAA to implement the settlement. Deals like Canady's, funded primarily by booster collectives, are not.

"Booster deals are going to be more difficult to pass," the person familiar said, adding: "The system is set up to not allow third parties to pay for play."

* * *

The NIL clearinghouse won't preclude athletes like Canady from signing endorsement deals, but it will bring considerably more oversight. The organization will want to know, for instance, how a booster club can get $1 million of value in marketing from a player with a profile like Canady, who has 34,000 followers on Instagram but is hardly a household name.

Colleges' pot of revenue-sharing money won't be subject to such scrutiny, meanwhile, as long as schools stay under the $20.5 million limit. So an offensive lineman, anonymous as he may be, could receive $1 million directly from his school. But a star lacrosse player would be hard-pressed to gain approval for a $1 million outside of an NIL deal bankrolled by a wealthy alum.

Some in college sports say nixing such deals risks pushing booster money back under the tablewhere it was for decades.

For the moment, before the settlement is approved, athletes and booster collectives are scrambling to cut deals under the old regulations. The Matador Club has already signed Canady to a one-year extension worth another $1 million, according to a person familiar with the deal.

"Until we figure out xactly what they're going to let go on," Tracy Sellers said, "why not keep going?"

---

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QUESTION: The organization will want to know how a booster can get $1 million of value in marketing from a player with a low profile like Canaday.

ANSWER: None of your damn business. Thats between the booster club and the player. This "NIL Clearinghouse" is collusion designed to intervene between the market (boosters) and players.

Fools and their money are soon parted.

The end.

dcg4403 said:

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That $1M NIL deal for a softball pitcher....just set the fair market value for a top ranked softball player in my opinion. Cannot deny that...someone was willing to pay it so it was "fair" to them.

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The collective isn't a company selling a product. It's a slush fund. The argument that colleges can set no limits on benefits has been tried and failed. So, the question is, can colleges regulate what their members do in the NIL space? The answer to that is almost certainly, "yes," in the abstract. The trick is coming up with something that doesn't infringe on legitimate NIL deals, where the athlete is getting paid for their advertising value, not their wins over replacement.

Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

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If that modern "art" piece is sold by a judge's sister to a mobster paying tens of millions more than anyone else bid, is that still the fair market value of the art piece? Or is that the fair market value of a judicial bribe?

Her Name Image and Likeness isn't worth $1 million in a fair market. The booster isn't paying for her NIL. You can argue that her fair market value to win a championship as a college softball player is $1 million to college boosters, but her NIL itself isn't worth that.

nereus said:

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Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

---

If that modern "art" piece is sold by a judge's sister to a mobster paying tens of millions more than anyone else bid, is that still the fair market value of the art piece? Or is that the fair market value of a judicial bribe?

Her Name Image and Likeness isn't worth $1 million in a fair market. The booster isn't paying for her NIL. You can argue that her fair market value to win a championship as a college softball player is $1 million to college boosters, but her NIL itself isn't worth that.

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How can you possibly argue that? On what specific metrics? What is her NIL value if it's not $1 million?

If you have some car dealership in Lubbock that is a middleman and pays her $1 million to make local advertisements - they may be over paying - but how can anyone say by how much? The clearinghouse is supposedly going to be determining what values are acceptable. It is not going to succeed because it's an impossible task.

Also is the clearinghouse and/or the NCAA going to be responsible for ensuring that an athlete fulfills their marketing duties? If Someone gets paid $100,000 to make 10 appearances for a business - and this is deemed to be an appropriate Fair Market Value for 10 appearances - what happens if they only end up doing 2 appearances?

Ag13 said:

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nereus said:

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Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

---

If that modern "art" piece is sold by a judge's sister to a mobster paying tens of millions more than anyone else bid, is that still the fair market value of the art piece? Or is that the fair market value of a judicial bribe?

Her Name Image and Likeness isn't worth $1 million in a fair market. The booster isn't paying for her NIL. You can argue that her fair market value to win a championship as a college softball player is $1 million to college boosters, but her NIL itself isn't worth that.

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How can you possibly argue that? On what specific metrics? What is her NIL value if it's not $1 million?

If you have some car dealership in Lubbock that is a middleman and pays her $1 million to make local advertisements - they may be over paying - but how can anyone say by how much? The clearinghouse is supposedly going to be determining what values are acceptable. It is not going to succeed because it's an impossible task.

Also is the clearinghouse and/or the NCAA going to be responsible for ensuring that an athlete fulfills their marketing duties? If Someone gets paid $100,000 to make 10 appearances for a business - and this is deemed to be an appropriate Fair Market Value for 10 appearances - what happens if they only end up doing 2 appearances?

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You want to know if a local car dealership is overpaying? Pretty easy. Show me their advertising budget for the preceding five years. We'll know real quick if this expenditure is in line with their legitimate advertising budget. If they've been paying local celebrities $1 million on a regular basis to sell cars, then that's FMV. If looks like an outlier, then it's a pay for play deal.

twk said:

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Ag13 said:

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nereus said:

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Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

---

If that modern "art" piece is sold by a judge's sister to a mobster paying tens of millions more than anyone else bid, is that still the fair market value of the art piece? Or is that the fair market value of a judicial bribe?

Her Name Image and Likeness isn't worth $1 million in a fair market. The booster isn't paying for her NIL. You can argue that her fair market value to win a championship as a college softball player is $1 million to college boosters, but her NIL itself isn't worth that.

---

How can you possibly argue that? On what specific metrics? What is her NIL value if it's not $1 million?

If you have some car dealership in Lubbock that is a middleman and pays her $1 million to make local advertisements - they may be over paying - but how can anyone say by how much? The clearinghouse is supposedly going to be determining what values are acceptable. It is not going to succeed because it's an impossible task.

Also is the clearinghouse and/or the NCAA going to be responsible for ensuring that an athlete fulfills their marketing duties? If Someone gets paid $100,000 to make 10 appearances for a business - and this is deemed to be an appropriate Fair Market Value for 10 appearances - what happens if they only end up doing 2 appearances?

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You want to know if a local car dealership is overpaying? Pretty easy. Show me their advertising budget for the preceding five years. We'll know real quick if this expenditure is in line with their legitimate advertising budget. If they've been paying local celebrities $1 million on a regular basis to sell cars, then that's FMV. If looks like an outlier, then it's a pay for play deal.

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So the clearinghouse is going to have the authority to make local car dealerships turn over their books for the last 5 years? Is Deloitte the FBI?

Ag13 said:

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twk said:

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Ag13 said:

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nereus said:

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Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

---

If that modern "art" piece is sold by a judge's sister to a mobster paying tens of millions more than anyone else bid, is that still the fair market value of the art piece? Or is that the fair market value of a judicial bribe?

Her Name Image and Likeness isn't worth $1 million in a fair market. The booster isn't paying for her NIL. You can argue that her fair market value to win a championship as a college softball player is $1 million to college boosters, but her NIL itself isn't worth that.

---

How can you possibly argue that? On what specific metrics? What is her NIL value if it's not $1 million?

If you have some car dealership in Lubbock that is a middleman and pays her $1 million to make local advertisements - they may be over paying - but how can anyone say by how much? The clearinghouse is supposedly going to be determining what values are acceptable. It is not going to succeed because it's an impossible task.

Also is the clearinghouse and/or the NCAA going to be responsible for ensuring that an athlete fulfills their marketing duties? If Someone gets paid $100,000 to make 10 appearances for a business - and this is deemed to be an appropriate Fair Market Value for 10 appearances - what happens if they only end up doing 2 appearances?

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You want to know if a local car dealership is overpaying? Pretty easy. Show me their advertising budget for the preceding five years. We'll know real quick if this expenditure is in line with their legitimate advertising budget. If they've been paying local celebrities $1 million on a regular basis to sell cars, then that's FMV. If looks like an outlier, then it's a pay for play deal.

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So the clearinghouse is going to have the authority to make local car dealerships turn over their books for the last 5 years? Is Deloitte the FBI?

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If you want to play an NCAA sport, and do an NIL deal, you'll have to get your NIL partner to play ball with the clearinghouse. What records they will require, precisely, I don't know, but I don't think my hypothetical is a stretch. In my scenario, they aren't requiring them to open all books, just show that they have a history of using local celebrities as a big part of their ad budget.

As I stated above, I think there may well be some de minimus number where they don't even require you to do anything other than disclose the deal, but for big money deals, yes, they will require some kind of justification for local businesses paying large sums.

Determinations like this are done for other things. Just look at things like IRS hobby loss rules for a potential template.

Profit motives (are you doing things that make it even possible for their to be return on this investment (the booster clubs aren't)
Reasonable expectation of profit (the booster club NILs don't have this)
History of profits and losses (do you keep making these NIL deals over and over after not making a profit on past ones)

twk said:

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Ag13 said:

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twk said:

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Ag13 said:

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nereus said:

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Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

---

If that modern "art" piece is sold by a judge's sister to a mobster paying tens of millions more than anyone else bid, is that still the fair market value of the art piece? Or is that the fair market value of a judicial bribe?

Her Name Image and Likeness isn't worth $1 million in a fair market. The booster isn't paying for her NIL. You can argue that her fair market value to win a championship as a college softball player is $1 million to college boosters, but her NIL itself isn't worth that.

---

How can you possibly argue that? On what specific metrics? What is her NIL value if it's not $1 million?

If you have some car dealership in Lubbock that is a middleman and pays her $1 million to make local advertisements - they may be over paying - but how can anyone say by how much? The clearinghouse is supposedly going to be determining what values are acceptable. It is not going to succeed because it's an impossible task.

Also is the clearinghouse and/or the NCAA going to be responsible for ensuring that an athlete fulfills their marketing duties? If Someone gets paid $100,000 to make 10 appearances for a business - and this is deemed to be an appropriate Fair Market Value for 10 appearances - what happens if they only end up doing 2 appearances?

---

You want to know if a local car dealership is overpaying? Pretty easy. Show me their advertising budget for the preceding five years. We'll know real quick if this expenditure is in line with their legitimate advertising budget. If they've been paying local celebrities $1 million on a regular basis to sell cars, then that's FMV. If looks like an outlier, then it's a pay for play deal.

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So the clearinghouse is going to have the authority to make local car dealerships turn over their books for the last 5 years? Is Deloitte the FBI?

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If you want to play an NCAA sport, and do an NIL deal, you'll have to get your NIL partner to play ball with the clearinghouse. What records they will require, precisely, I don't know, but I don't think my hypothetical is a stretch. In my scenario, they aren't requiring them to open all books, just show that they have a history of using local celebrities as a big part of their ad budget.

As I stated above, I think there may well be some de minimus number where they don't even require you to do anything other than disclose the deal, but for big money deals, yes, they will require some kind of justification for local businesses paying large sums.

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Justification = I can afford it and I want to. If the NCAA/The Clearinghouse starts trying to tell private businesses how to run their business and in turn limiting the compensation to athletes it's going to last for about 1 second. If the NCAA ever tried to suspend an athlete over getting paid what they arbitrarily deem "too much", that suspension will last for less than a second before a TRO is issued.

Clearinghouse is DOA. The amount of time that Deloitte is wasting on it (and getting paid by the hour to do so) is incredible.

There is a pending lawsuit on this matter, and presumably, there will be an appeal. I think any rogue TRO's issued by other court which would interfere with the judgment pending appeal may get slapped down.

I'm willing to bet Sips go out and find ways around whatever supposed restrictions. Bet they pay a lot of money for pitchers this offseason and every season after, since they claim it's the only thing preventing titles.

Ross Dellenger's Yahoo! article discussed that:

Quote:

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The House settlement-related enforcement arm is a test for major college football and basketball. Can schools follow the rules? The biggest of which is for universities to remain under the new quasi-salary cap.

The cap is a way to legislate competitive equity. In many ways, it handcuffs college football's biggest brands with the richest donor bases, like Texas, Ohio State, Texas A&M, Tennessee, Oregon and Miami six of the top spenders in the NIL era.

Will these programs remain under the cap? Or will they support their booster collectives in flooding the new Deloitte-run NIL clearinghouse with multi-million dollar deals for their athletes as a way to circumvent the cap?
And what happens when those are rejected? More lawsuits?

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https://sports.yahoo.com/college-football/article/with-college-sports-in-limbo-and-key-issues-coming-to-a-head-the-spotlight-is-on-the-sec-its-going-to-get-heated-130018106.html

Not sure how we can say that NIL is being "phased out," though I usually make it a point not to argue with twk.

*good, broad-reaching article about the SEC meetings in Florida that covers a lot of ground, for anyone who hasn't read it yet. But it goes further on the challenge of administrators agreeing to things, and the boosters still going and doing whatever they want.

Point taken. Phased out as we know it, where some alum chucks in $10,000 to a collective to support his team with no expectation of getting anything of comparable value in return. That is what that are seeking to eliminate. Alberts was on the committee, so I suspect we will at least attempt to play by the rules.

Nobody is going to stop Livvy Dunne from capitalizing on her looks, or Dr. Pepper putting a curse on some returning QB for its Fansville campaign, but the Tech collective example is not by any stretch of the imagination a legitimate payment for use of the athletes name, image, or likeness.

Bloomberg also had a pretty good article on this a few weeks ago:

https://www.bloomberg.com/news/articles/2025-03-14/the-ncaa-s-plan-to-control-college-athletes-pay-is-flawed?sref=O12oKJVp

Quote:

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The Flawed Plan to Control College Athletes' Pay

A proposed clearinghouse for NIL deals could be a mess.

By Ira Boudway

March 14, 2025 at 6:00 AM CDT

March Madness culminates on April 7, when the NCAA men's basketball championship game is played in San Antonio. Whichever team wins, it will be the second-most important thing to happen that day in college sports. The main event is slated for a federal courtroom in Oakland, California, where a district judge will hold a hearing on final approval for a settlement between the National Collegiate Athletic Association and former players who've sued in class actions over restrictions on pay. Under the agreement, which is expected to be approved, the NCAA would pay $2.8 billion in damages to former athletes and establish a framework for schools to compensate current players, with total pay capped at 22% of the average athletic department's revenue (about $21 million for next season). It's a watershed moment. After decades of fighting, the NCAA is fully surrendering the pretense of amateurism in college sports.

It's also an ambitious gambit to regain control of the market for talent. Along with setting aside money for current and former athletes, the settlement would establish a clearinghouse for player sponsorship deals. Beginning in July, any contract for more than $600 would be subject to a "fair market value" assessment by accountants at Deloitte. At that threshold, most basketball and football deals in the current market would be included. Although it may sound like a routine bit of paperwork, the process promises to be highly contentious, putting the clearinghouse front and center in a power struggle over player pay.

Four years ago, under pressure from state lawmakers and federal courts, the NCAA began allowing athletes to profit from their name, image and likeness (NIL). Since then, the market has grown to almost $2 billion per year, according to Opendorse, an online deals platform for athletes. Most of that money comes from boosters who've organized themselves into so-called collectives and use NIL deals as a backdoor for pay-to-play. A contract might stipulate that a player make a handful of appearances at meet-and-greets in return for money, but everyone involved knows what the exchange is really aboutperformance on the court or field.

Collectives, working in coordination with their affiliated schools, are engaging in bidding wars to recruit top talent, leading to spiraling player costs and extreme roster turnover. In December, for example, Tulane University quarterback Darian Mensah opted to transfer to Duke after receiving a two-year, $8 million offer from the school's collective, according to reporting from CBS Sports. The NCAA and its biggest athletic conferences want to use the House settlementnamed after lead plaintiff Grant House, a former Arizona State University swimmerto put a lid on costs, but it will work only if they can close the NIL loophole.

Details about how they plan to do this are scant. On March 12, after Bloomberg Businessweek sent a list of questions for this column, the NCAA and the conferences that are co-defendants in the class actions released a statement announcing a list of athletic directors who would be on the Settlement Implementation Committee. It said the group was well suited to the task of "bringing order to chaos amid the current realities of college sports."
The committee, the release said, has been meeting "numerous times per week for the past several months" and "dedicating countless hours" to ensuring the settlement's long-term success. Shorter version: We know this is a big job, and we're on it. (Deloitte and the NCAA declined to comment further for this article.)
In theory the process would work something like this: An athlete signs an NIL deal and reports it to the clearinghouse. Deloitte checks to see if the contract is with somebody on a list of "associated entities." Basically, this means boosters or collectivesany body with a rooting interest in the school's athletic program. If not, the contract doesn't require further review. (If State Farm wants to pay a player to appear in an ad, Deloitte figures this is a legitimate sponsorship deal at market rate.) But if a deal goes into review, Deloitte assesses it to make sure it's set at a fair market value for the use of NIL.

Making such an assessment usually involves checking against a database of other NIL deals. It certainly involves judgment calls about where to draw lines. "I don't see that there's any way that it's not messy," says Jim Andrews, founder and chief executive officer of A-Mark Partnership Strategies LLC, a sponsorship consultant for brands. "That's not to say that it can't be done or that the very smart people at Deloitte cannot come up with something that is very good."
There will be flexibility built into the system, according to a person familiar with the workings of the implementation committee who asked not to be named because the settlement isn't final yet, with allowance for a range of compensation for similar deals. Those that don't pass muster can be renegotiated or appealed to an independent arbitrator.
In 2021, right before it opened the floodgates for NIL deals, the NCAA was planning to implement something like the clearinghouse but abandoned it after a resounding defeat in the US Supreme Court over the association's attempt to restrict player compensation. On that occasion, the NCAA had turned to Opendorse to create the system. "We spent half a year and more than $2 million building out the platform," says co-founder Blake Lawrence. That project was scrapped, he says, two days before the new NIL rules went into effect, as the Supreme Court ruling made it evident that attempts to restrain the NIL market were not likely to survive legal challenges.
Since then, Opendorse has worked with athletes, schools, brands and collectives to arrange hundreds of thousands of NIL deals. The company has also created an algorithm for determining the commercial value of an athlete depending on their sport, position, school, social media following and other factors. During negotiations in the House settlement, Lawrence says, the plaintiffs used Opendorse's database to help set the formula for what athletes could have been paid in the pastand therefore what damages they're potentially entitled to now.

The logistical task before Deloitte in setting up a clearinghouse, Lawrence says, is a daunting one: "I wouldn't wish it upon my worst enemy, because I've done it." Let's assume, however, that Deloitte can get the job done. That's when the problems really begin.
Schools are counting on athletes to report their deals. Not all will. While the NCAA has a rule requiring disclosure, many players have decided it's toothless and have opted to ignore it. Lawrence estimates that 80% of NIL transactions go undisclosed, a rate he expects to stay the same once the settlement is in effect. This leaves the NCAA in the familiar position of having to decide what to do when a star recruit from a low-income family shows up to school in a Lamborghini.

In February lawmakers in Oregon introduced a bill stating that athletes can't be required to disclose deals that include a nondisclosure agreement. University of Oregon athletes, it just so happens, enjoy the patronage of billionaire Nike Inc. co-founder Phil Knight, which gives the Ducks a competitive advantage in recruiting. The new bill, if passed, could help prevent the House settlement from shutting off that spigot. It could also expose athletes and schools in the state to loss of eligibility, according to the person familiar with the committee.
Boosters and collectives are also likely to try to funnel NIL money through sources not on Deloitte's list of associated entities, leading to a tedious game of cat and mouse. Then there's the follow-up. Deloitte might decide, as a hypothetical, that a $100,000 deal requiring a freshman point guard at the University of Kentucky to make 20 appearances on behalf of a collective is fair market value. But what if the player shows up only twice? Is Deloitte going to require proof of work? If so, it will have to police tens of thousands of deals.

According to the committee's press release, this work will fall to a "new enforcement entity" that will be part of "robust educational efforts" to ensure that coaches, players, administrators and relevant third parties understand the new model. This entity, says the person familiar, would likely have a staff of dozens at the outset and rely on spot checks and tips from informants, just like in the old days of paper bags of cash delivered in locker rooms. The idea isn't to be perfect, but to be better than the current status quo.

Let's also assume this new enforcement entity is a crackerjack team of auditors and investigators. This still doesn't solve the problem that the entire premise of the clearinghouse may fall apart under legal scrutiny. Boosters and collectives, notes Mit Winter, a lawyer in Kansas City, Missouri, who specializes in NIL law, haven't agreed to the settlement and aren't bound by it. At some point, one of them is almost certain to challenge the clearinghouse's authority.
A booster might object to being on the list of associated entities. Or a collective might continue to offer deals it knows won't pass muster with the clearinghouse. "They're just going to test it and say, 'Let's dare Deloitte to tell us no,'" Winter says.
Once this fight lands in federal court, the NCAA and its conferences are on shaky ground. The argument, Winter says, will be that the clearinghouse restrains trade and violates antitrust law. It's a strong argument that's worked many times before and could well work again. The counter argument is also likely to be familiar: The NCAA isn't keeping anybody from making deals, it's just enforcing its own eligibility rules. And this time around, schools could point to a court-approved settlement saying their rules are reasonable.

Most pro sports leagues in the US have some version of a fair market value rule to prevent teams from using third-party deals as a way around payroll restrictions. But those rules are part of collectively bargained agreements with players, which provide an antitrust exemption, something college sports don't have. The NCAA is betting it can corral the market using a class-action settlement instead. My March Madness pick this year is that they're wrong.

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I am growing to truly loathe college athletics

I've seen guys get NIL and their image' name or likeness has appeared nowhere just call them 1099s since they do business at multiple schools anyway

This clearinghouse has zero chance of surviving legal challenges.




Unless the federal government passes its bill on "fixing" college sports.

There are certain rules that apply, even on the baseball board. Compliance is key.

Until the 1st player lawsuit.great playera arw going to get paid.

Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

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I have a feeling you wouldn't like your house being appraised that way if you own one.

GigEmReggie said:

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Scotts Tot said:

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The market value of any asset is purely a function of what someone is willing to pay for it. I might think it's stupid that someone would pay tens of millions for a piece of modern "art", but if someone will pay it, that's its market value. I can't see how this changes the landscape of NIL all that much.

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I have a feeling you wouldn't like your house being appraised that way if you own one.

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Appraisal for taxing, insurance or mortgage purpose is not the same as market value.

So this will work like did for NFTs? Payment required in a meme coin?

Wabs said:

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Now to phase out the transfer portal

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Or at least go back to when a player had to sit out a year if they transferred.

Hank the Grifter said:

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Fools and their money are soon parted.

The end.

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User name checks out.