Deloitte will determine NIL fair market values

[Sean Miller Fan]

You posted the article and didn't even read it. The $600 threshold for reporting (which is the limit for how much you can make without getting a 1099) is the total amount for the year. It's not a per day number.

One of the former players that was on the witness stand the other day already made a case for why this won't work because the valuations an experienced player are under what freshmen are getting now. There will be an injunction on this ten minutes after the decision is published.

I don't know what you are talking about because the article doesn't mention there is a $600 annual max. That would be great if it did though as it would prevent a booster from paying someone $600/day.

I LOVE this quote:

"One of the four people with knowledge of the situation said the committee is looking at recommending a set of four or five of what were termed as very significant penalties."

This would be so great to get rid of these booster pay for play deals. If you have a legitimate NIL deal like some of the commercials you have seen during March Madness with national, publicly traded companies, those are fine. But $1 million to show up at a animal shelter or soup kitchen for 30 minutes....those will be gone as they are obvious pay for plays.

Also, I'm not sure what you mean about this being unfair because an experienced player will be getting what a freshman gets now. What is the context here?

This could very well be defeated in court. However, not for the reasons you think. It won't be defeated because some judge will rule that the fair market value is "whatever someone is willing to pay" like some of you say. $1 million to show up at animal shelter or car dealership isn't fair market value as there is plenty of legalese in "fair market value" to show that these deals weren't an arms-length deal at fair market value.

If this gets defeated in court, it would be for one reason and one only: the judge would rule that yes, these are "pay for play" and yes, these are pro athletes, and if a booster wants to pay an college QB or NFL QB to play for their favorite college or NFL team, the law can't restrict that. This would also be the official end of amateurism. But, no, the, "these are actually fair market value deals because the booster is paying $1 million more than this player can get on another local advertising deal" argument, that one isn't going to work. They will have to hope the judge ends amateurism altogether. And he/she may.

 

[pittdan77]

I don't know what you are talking about because the article doesn't mention there is a $600 annual max. That would be great if it did though as it would prevent a booster from paying someone $600/day.

It didn't have to if you read it all in context.

This is an attempt to collude in order to limit pay. Ain't gonna work for a whole host of reasons. Whatever the ruling, fast implementation dies on appeal.

 

[Sean Miller Fan]

It didn't have to if you read it all in context.

This is an attempt to collude in order to limit pay. Ain't gonna work for a whole host of reasons. Whatever the ruling, fast implementation dies on appeal.

Maybe. But the NCAA has a better case than you think. They are allowing players to make millions from direct payments from universities for use of their name, image, and likeness and through legitimate NIL deals from private companies. But they will maintain that college athletes should still be amateurs, not professionals. Now, the court may rule that they are already professionals and the universities are already paying them "to play" through above market NIL deals with the universities themselves. So if Alabama can pay a QB $3 million directly in what is probably an "above fair market value deal," why can't Billy Bob's Ford?

What's interesting is the Alabama's and Ohio State's of the world seem to be united in getting rid of booster NIL. I dont think any of us would have thought that because that's their strategic advantage.

 

[pittdan77]

Maybe. But the NCAA has a better case than you think. They are allowing players to make millions from direct payments from universities for use of their name, image, and likeness and through legitimate NIL deals from private companies. But they will maintain that college athletes should still be amateurs, not professionals. Now, the court may rule that they are already professionals and the universities are already paying them "to play" through above market NIL deals with the universities themselves. So if Alabama can pay a QB $3 million directly in what is probably an "above fair market value deal," why can't Billy Bob's Ford?

What's interesting is the Alabama's and Ohio State's of the world seem to be united in getting rid of booster NIL. I dont think any of us would have thought that because that's their strategic advantage.

No, nobody in the P2 cares that some kid is getting cars and wads of cash to play football. Only a fool thinks that's new to college sports. Cap it however you want. They'll just cheat. That's how it's always been and there isn't any reason to think that changes.

Here's the problem. The member schools all just managed to grab bigger TV contracts and they don't want to share those gains with the athletes. If it's $20 million now, imagine how that will go up every time a bigger TV deal gets signed? They're trying to cap the earning potential now because they know they're going to lose and it's a lot better for the NCAA member schools if that number stays as low as possible. They know if that number goes up it might drive schools like Pitt to make ugly choices.

 

[Joe the Panther Fan]

If it's $20 million now, imagine how that will go up every time a bigger TV deal gets signed?

The $20 million comes from a percentage of average P4 athletic department revenues, so if/when during the duration of this deal someone signs a new huge television contract that would be accounted for. Ten years from now that $20 million (it will actually probably be a little more than that at the start) will be $30 million.

 

[pittdan77]

The $20 million comes from a percentage of average P4 athletic department revenues, so if/when during the duration of this deal someone signs a new huge television contract that would be accounted for. Ten years from now that $20 million (it will actually probably be a little more than that at the start) will be $30 million.

Well, yes and no. That's assuming that the terms stay the same. I don't think it's reasonable to assume that those percentages will hold.

 

[Joe the Panther Fan]

Well, yes and no. That's assuming that the terms stay the same. I don't think it's reasonable to assume that those percentages will hold.

Well if the settlement gets final approve the percentages will stay the same for the life of the deal, which is ten years.

Unless/until some other court comes along and tells them they have to do something different of course.

 

[pittdan77]

Well if the settlement gets final approve the percentages will stay the same for the life of the deal, which is ten years.

Unless/until some other court comes along and tells them they have to do something different of course.

I still don't think the deal survives the ten minutes after a judgement is rendered on the formulas.

 

[Joe the Panther Fan]

I still don't think the deal survives the ten minutes after a judgement is rendered on the formulas.

I find it odd that this judge seems to be happy, for the most part, with that part of the deal.

 

[Sean Miller Fan]

I find it odd that this judge seems to be happy, for the most part, with that part of the deal.

The WV AG is ready to sue, even if it's against WVU's interest. The free transfer thing may have happened anyway but the WV AG suing to try to get Raequan Battle eligible on a really bad team caused far more harm to WVU football and basketball long-term because free transfers hurt them more than upper tier programs.

 

[jayhawks65]

I'm wondering why fans are so against players getting paid? This is America make as much money as possible. Why do fans get so angry that a kid can make life changing money playing college sports? I love seeing these guys get paid. This should have happened years ago!

 

[Sean Miller Fan]

I'm wondering why fans are so against players getting paid? This is America make as much money as possible. Why do fans get so angry that a kid can make life changing money playing college sports? I love seeing these guys get paid. This should have happened years ago!

I think most fans are ok with them getting paid. I like it. I just want them to either be full pros with contracts and not this weird thing they got going where they get paid by boosters and are free agents every year.

 

[jayhawks65]

I think most fans are ok with them getting paid. I like it. I just want them to either be full pros with contracts and not this weird thing they got going where they get paid by boosters and are free agents every year.

Just appears that the majority of fans are hoping the players make the least amount of money possible. Doesn't make sense to me as the players are who we pay to watch.

I was happy for the Oregon quarterback last year. Think he made 5 million dollars to play one year for them. He would have been a late round draft pick or free agent in the NFL last season. He gets his shot next season in the NFL if he doesn't make a team he has a nice nest egg to fall back on. Seems like a win win for everyone.

 

[BigChungus90210]

Just appears that the majority of fans are hoping the players make the least amount of money possible. Doesn't make sense to me as the players are who we pay to watch.

I was happy for the Oregon quarterback last year. Think he made 5 million dollars to play one year for them. He would have been a late round draft pick or free agent in the NFL last season. He gets his shot next season in the NFL if he doesn't make a team he has a nice nest egg to fall back on. Seems like a win win for everyone.

It’s more or less just the salary cap issues in baseball. I’m not mad that Ohtani got a bajillion dollars or at any other player signing a 9 figure deal. It’s just knowing if that’s the going rate and there’s no guardrails in terms of how many of those contracts one team can sign, my (our) team will never realistically compete.

 

[Sean Miller Fan]

Just appears that the majority of fans are hoping the players make the least amount of money possible. Doesn't make sense to me as the players are who we pay to watch.

I was happy for the Oregon quarterback last year. Think he made 5 million dollars to play one year for them. He would have been a late round draft pick or free agent in the NFL last season. He gets his shot next season in the NFL if he doesn't make a team he has a nice nest egg to fall back on. Seems like a win win for everyone.

Yea, I am all for them getting their market value for their on-field potential/performance. I just want contracts so we don't have free agency every year. And I dont like this "workaround" where boosters pay them these fake NIL deals. I am sure NFL fans would hate it if Kansas City Chiefs fans set up a fan account to pay Pat Mahomes so the Chiefs can pay him league minimum.

 

[jayhawks65]

Yea, I am all for them getting their market value for their on-field potential/performance. I just want contracts so we don't have free agency every year. And I dont like this "workaround" where boosters pay them these fake NIL deals. I am sure NFL fans would hate it if Kansas City Chiefs fans set up a fan account to pay Pat Mahomes so the Chiefs can pay him league minimum.

What is market value? If Phil Knight is willing to pay 5 million dollars for a quarter back that is market value for Oregon. Coaches make 10 million dollars a year no big deal. Player makes 2 million dollars a year the sky is falling.

 

[Sean Miller Fan]

What is market value? If Phil Knight is willing to pay 5 million dollars for a quarter back that is market value for Oregon. Coaches make 10 million dollars a year no big deal. Player makes 2 million dollars a year the sky is falling.

If Phil Knight wants to pay the Oregon QB $5 million then that is probably his market value "to play." But pay for play is against the rules. It shouldn't be but it is. And it's going to be enforced strictly until someone sues.

If Nike wants to pay the QB $5 million to do commercials and billboards, that has to go through Deloitte and they'd look and see how much Nike pays infinitely more popular NFL QB's and determine the NATIONAL marketability of this college QB who 99% of Americans never heard of.

 

[ShadyTwoFive]

Long-awaited guardrails could be coming to NIL, but....

For all those within college football calling for guardrails to manage NIL, the construction crew may be on their way. But no one's home free just yet. In fact, this years-long fig

www.footballscoop.com

This is what I have said all along. They will look at what pro athletes make from NIL deals to give them an idea of what fair market value is for a college athlete.

Locally, Cam Heyward has a deal with Edgar Snyder. He is a well known local celebrity. How much could he be making from this deal. 50K/year? 100K/year? Now let's say Edgar Snyder was a huge fancy of a college team and wanted to buy a new QB for $2 million. It's pretty obvious that that QB's market value wouldn't surpass that of an NFL star.

We'll see if this survives an eventual lawsuit but if it does, this would be great news for schools like Pitt.

College football games used to be fun there no market now

 

[pittdan77]

I find it odd that this judge seems to be happy, for the most part, with that part of the deal.

It's not so much that the formulas are wrong. It's difficult to prove what they are but I do think the formulas struggle with the extremes on the high end based on what some of these athletes are saying. When you have a proportionally small pool of money that you have to split a lot of different ways, it's really difficult to pay someone's real value on the top end. I think the judge is just going to roll with it because I'm pretty sure they realize this gets appealed regardless of the ruling.

There just isn't a real world circumstance where someone offers to pay something and a third party steps in and says, no, that's too much. At least not without an act of Congress.

 

[Sean Miller Fan]

It's not so much that the formulas are wrong. It's difficult to prove what they are but I do think the formulas struggle with the extremes on the high end based on what some of these athletes are saying. When you have a proportionally small pool of money that you have to split a lot of different ways, it's really difficult to pay someone's real value on the top end. I think the judge is just going to roll with it because I'm pretty sure they realize this gets appealed regardless of the ruling.

There just isn't a real world circumstance where someone offers to pay something and a third party steps in and says, no, that's too much. At least not without an act of Congress.

This is what you aren't understanding. The $20 million that schools can pay is ONLY for the use of their names, images, and likenesses for marketing material. It's NOT a payment to play. So, let's take one of the more known college players, Arch Manning. How much is the use of his name, image, and likeness in commercials and billboards in Austin worth to the Texas Longhorns football program? That answer is pretty close to $0 because Longhorn fans know who he is so there isn’t a ton of value he brings to the program by doing commercials for them. His value comes from his play, which he is being paid $0 for. The NIL payment is a disguised payment to play but a legally agreed upon one. And that will be used against the NCAA NIL Clearinghouse when someone sues because on the one hand, the court and the NCAA are allowing above-market NIL deals as long as the university pays them directly but disallowed NIL deals over $600 if paid by a booster and it's above market value. It was a deal that was struck. No more booster NILs but instead the university will pay instead.

 

[pittdan77]

This is what you aren't understanding. The $20 million that schools can pay is ONLY for the use of their names, images, and likenesses for marketing material. It's NOT a payment to play. So, let's take one of the more known college players, Arch Manning. How much is the use of his name, image, and likeness in commercials and billboards in Austin worth to the Texas Longhorns football program? That answer is pretty close to $0 because Longhorn fans know who he is so there isn’t a ton of value he brings to the program by doing commercials for them. His value comes from his play, which he is being paid $0 for. The NIL payment is a disguised payment to play but a legally agreed upon one. And that will be used against the NCAA NIL Clearinghouse when someone sues because on the one hand, the court and the NCAA are allowing above-market NIL deals as long as the university pays them directly but disallowed NIL deals over $600 if paid by a booster and it's above market value. It was a deal that was struck. No more booster NILs but instead the university will pay instead.

1. You are "worth" exactly what someone is willing to pay you.
2. If NIL isn't "worth" anything, why are people getting paid for it?

That's it. Everything else is just noise disguised as a clever way to limit how much an athlete can make before too many more schools say f-it and walk away from bigtime sports.

 

[Sean Miller Fan]

1. You are "worth" exactly what someone is willing to pay you.
2. If NIL isn't "worth" anything, why are people getting paid for it?

That's it. Everything else is just noise disguised as a clever way to limit how much an athlete can make before too many more schools say f-it and walk away from bigtime sports.

You are worth what someone is willing to pay you "to play." I dont know why this is so hard for you. A booster paying a player $5 million to show up at his car dealership for 30 minutes is not an indication of his market value when someone like Pat Mahomes may only get 100K from a car dealership appearance. It's a payment to play. I dont know why this is such an impossible concept for you to understand. The definitions of fair market value doesn't say "what someone is willing to pay." It adds in things such as "under normal circumstances.....in a competitive market....prudent buyers and sellers.

If every house on your street sells for 500K and yours looks the same as every other house and you list yours for 500K and I come in and offer you 3 million because my parents are your neighbors and are sick so I need to take care of them and I'm some billionaire that money isn't even a thing, is the fair market value of your house $3 million now? Or is it 500K and the extra $2.5 million I paid was due to an extremely unusual circumstance where I wanted the deal done quick and you gone quick?

 

[BigChungus90210]

You are worth what someone is willing to pay you "to play." I dont know why this is so hard for you. A booster paying a player $5 million to show up at his car dealership for 30 minutes is not an indication of his market value when someone like Pat Mahomes may only get 100K from a car dealership appearance. It's a payment to play. I dont know why this is such an impossible concept for you to understand. The definitions of fair market value doesn't say "what someone is willing to pay." It adds in things such as "under normal circumstances.....in a competitive market....prudent buyers and sellers.

If every house on your street sells for 500K and yours looks the same as every other house and you list yours for 500K and I come in and offer you 3 million because my parents are your neighbors and are sick so I need to take care of them and I'm some billionaire that money isn't even a thing, is the fair market value of your house $3 million now? Or is it 500K and the extra $2.5 million I paid was due to an extremely unusual circumstance where I wanted the deal done quick and you gone quick?

You said using Arch Manning has nearly $0 value in the Austin area for marketing purpose because the demo in that area already knows him but Pat Mahomes is worth 6 figures... why is that? Doesn't everyone in Kansas City already know him? What about the fact that Austin has nearly twice the population of Kansas City, isn't that an even bigger audience you can reach with local commercials and physical advertisements?

 

[happjack]

You are worth what someone is willing to pay you "to play." I dont know why this is so hard for you. A booster paying a player $5 million to show up at his car dealership for 30 minutes is not an indication of his market value when someone like Pat Mahomes may only get 100K from a car dealership appearance. It's a payment to play. I dont know why this is such an impossible concept for you to understand. The definitions of fair market value doesn't say "what someone is willing to pay." It adds in things such as "under normal circumstances.....in a competitive market....prudent buyers and sellers.

If every house on your street sells for 500K and yours looks the same as every other house and you list yours for 500K and I come in and offer you 3 million because my parents are your neighbors and are sick so I need to take care of them and I'm some billionaire that money isn't even a thing, is the fair market value of your house $3 million now? Or is it 500K and the extra $2.5 million I paid was due to an extremely unusual circumstance where I wanted the deal done quick and you gone quick?

The NCAA can no longer restrict what an athlete can earn off the field/court, once they rule someone ineligible for a NIL deal they don't like the courts will rule the player eligible and tell the NCAA to F off.

 

[Sean Miller Fan]

You said using Arch Manning has nearly $0 value in the Austin area for marketing purpose because the demo in that area already knows him but Pat Mahomes is worth 6 figures... why is that? Doesn't everyone in Kansas City already know him? What about the fact that Austin has nearly twice the population of Kansas City, isn't that an even bigger audience you can reach with local commercials and physical advertisements?

You aren't understanding. I said Arch Manning has close to a $0 NIL value for the University of Texas. UT sells out already and everyone knows he plays on the team so UT purchasing a commercial showing Manning and saying "see you in the fall" doesn't add much value.

Manning DOES have local NIL value to local businesses but not more than a HOF QB in his local market. Like maybe he's worth 50K to show up at a car dealership. 20K to do a commercial for a plumber. Stuff like that.

 

[Sean Miller Fan]

The NCAA can no longer restrict what an athlete can earn off the field/court, once they rule someone ineligible for a NIL deal they don't like the courts will rule the player eligible and tell the NCAA to F off.

You are correct. They can't restrict what an athlete can make from marketing/advertising deals. However, if Deloitte says it's over fair market value, then the athlete has to decide does he take the deal and lose eligibility (because he would now be a professional) or does he decline or just do the deal at fair market value so that he can remain an amateur. The NCAA can't restrict him from taking the above market deal, they can just take away his amateur status if he does. The kid can keep the money.

 

[Black_Man_Panther]

But they will maintain that college athletes should still be amateurs, not professionals.

No. All they care about is they are NOT employees, since that opens up a scenario that will wipe college football off the face of the earth. Not that is a bad thing.

And this Deloitte thing has 0.0% chance of happening. It's a salary cap in disguise which will never fly in the courts. I feel the only reason the universities agreed to the $20 million, was at least they will have to publicly report "salaries" - at least public or semi-public institutions. But again, I see an IRS ruling in the future which will blow things up and send it back to the courts. This whole situation reeks of money laundering 101 and the IRS will definitely NOT let that happen.

 

[pittdan77]

You are worth what someone is willing to pay you "to play." I dont know why this is so hard for you. A booster paying a player $5 million to show up at his car dealership for 30 minutes is not an indication of his market value when someone like Pat Mahomes may only get 100K from a car dealership appearance. It's a payment to play. I dont know why this is such an impossible concept for you to understand. The definitions of fair market value doesn't say "what someone is willing to pay." It adds in things such as "under normal circumstances.....in a competitive market....prudent buyers and sellers.

If every house on your street sells for 500K and yours looks the same as every other house and you list yours for 500K and I come in and offer you 3 million because my parents are your neighbors and are sick so I need to take care of them and I'm some billionaire that money isn't even a thing, is the fair market value of your house $3 million now? Or is it 500K and the extra $2.5 million I paid was due to an extremely unusual circumstance where I wanted the deal done quick and you gone quick?

Parsing words and trying to inject logical fallacies won't make you correct. Getting some fancy accounting firm to come in and say, "that kid isn't worth that," is just trying to prevent the next kid from getting $100k more. It's artificial. You know it, I know it, they know it. That's why they are in court.

 

[Sean Miller Fan]

Parsing words and trying to inject logical fallacies won't make you correct. Getting some fancy accounting firm to come in and say, "that kid isn't worth that," is just trying to prevent the next kid from getting $100k more. It's artificial. You know it, I know it, they know it. That's why they are in court.

Your logic, unsurprisingly, is so off base. Deloitte has a database of all NIL deals from pro athletes. They know exactly how much car dealership appearances are worth. If a kid sues that the car dealership wants to pay him $5 million but Deloitte said FMV is $50K, he will probably win but it won't be because the judge thinks fair market value is any amount a crazed fanboy booster is willing to pay. He will win because the judge will rule that, yes, this is a payment to play and the NCAA cannot extinguish someone's eligibility over payments "to play." So that will lead to the players being fully professional.

 

[pittdan77]

Your logic, unsurprisingly, is so off base. Deloitte has a database of all NIL deals from pro athletes. They know exactly how much car dealership appearances are worth. If a kid sues that the car dealership wants to pay him $5 million but Deloitte said FMV is $50K, he will probably win but it won't be because the judge thinks fair market value is any amount a crazed fanboy booster is willing to pay. He will win because the judge will rule that, yes, this is a payment to play and the NCAA cannot extinguish someone's eligibility over payments "to play." So that will lead to the players being fully professional.

That paragraph is one of your more beautiful moments of circling back and trying to claim a win while admitting you were wrong. Well done.