Deloitte will determine NIL fair market values

[Sean Miller Fan]

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.

 

[pafootballguy]

Why even get your hopes up because it will not last past the first denied NIL deal.

 

[King Of All Message Boards]

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.

I’m no law expert but seems unlikely just based on what’s been discussed on this board alone. Don’t see how it can be restricted unless/until there’s a collective bargaining agreement.

 

[pafootballguy]

I’m no law expert but seems unlikely just based on what’s been discussed on this board alone. Don’t see how it can be restricted unless/until there’s a collective bargaining agreement.

The combination of Antitrust, restraint of trade, and state laws means if will never survive. It is just a hope and a pray move by the NCAA that will just end up costing money to implement and then defend.

 

[pittdan77]

The combination of Antitrust, restraint of trade, and state laws means if will never survive. It is just a hope and a pray move by the NCAA that will just end up costing money to implement and then defend.

Yeah, I can't imagine any situation where someone trying to establish "market value" holding up because the literal definition of market value is what buyer is willing to pay for something that aligns with what the seller is willing to take. Is some arbitrary intermediary going to tell a kid transferring from a JUCO that they shouldn't be worth as much because of some arbitrary stats? If a TE runs more plays out of the slot is he going to be told he can't get WR money?

Just dumb. If anyone could control compensation levels it would already be zero and that would be the end of it.

 

[Sean Miller Fan]

Yeah, I can't imagine any situation where someone trying to establish "market value" holding up because the literal definition of market value is what buyer is willing to pay for something that aligns with what the seller is willing to take. Is some arbitrary intermediary going to tell a kid transferring from a JUCO that they shouldn't be worth as much because of some arbitrary stats? If a TE runs more plays out of the slot is he going to be told he can't get WR money?

Just dumb. If anyone could control compensation levels it would already be zero and that would be the end of it.

You are confusing pay for play with marketing deals. This for "real NIL" marketing deals.

If every house on your street, which are all pretty similar sell for 500K. Then you list yours, which is similar to all the other houses for 500K but I pay you $3 million when the other offers you got are right around 500K, is the market value $500K or is it $3 million? The answer is that the market value is $500K and I gave you the extra $2.5 million either as a gift or for some other reason which doesn't apply to what the house is worth.

 

[Sean Miller Fan]

I’m no law expert but seems unlikely just based on what’s been discussed on this board alone. Don’t see how it can be restricted unless/until there’s a collective bargaining agreement.

You can't restrict how much a booster wants to pay an athlete. They can take the full amount. However, if the clearinghouse says it's worth $10K but you paid them $1 million, then the $990,000 extra is considered pay for play, which is against NCAA rules. So they can keep the $1 million. They'd just lose eligibility because they'd be considered a pro.

 

[pittdan77]

You are confusing pay for play with marketing deals. This for "real NIL" marketing deals.

If every house on your street, which are all pretty similar sell for 500K. Then you list yours, which is similar to all the other houses for 500K but I pay you $3 million when the other offers you got are right around 500K, is the market value $500K or is it $3 million? The answer is that the market value is $500K and I gave you the extra $2.5 million either as a gift or for some other reason which doesn't apply to what the house is worth.

No, $500k was the expected market value. The actual market value is $3 million and every other house will list in that range, now. If you pay me the extra, you had a reason that had some value to you. Probably because you felt that someone else was going to offer more so you want to beat them to the punch. This is a pretty easy concept. You, and this article, are playing fast and loose with the terminology. The market is set exactly where someone is willing to pay and you are willing to accept it. Saying that you can only make $500k on your house and nothing more is a price cap. Just call it what it is.

 

[NCPitt]

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.

 

[Sean Miller Fan]

No, $500k was the expected market value. The actual market value is $3 million and every other house will list in that range, now. If you pay me the extra, you had a reason that had some value to you. Probably because you felt that someone else was going to offer more so you want to beat them to the punch. This is a pretty easy concept. You, and this article, are playing fast and loose with the terminology. The market is set exactly where someone is willing to pay and you are willing to accept it. Saying that you can only make $500k on your house and nothing more is a price cap. Just call it what it is.

You don't get it. That's not hard to understand. Let's say we are good friends and I'm a rich guy who wants to gift you $2.5 million. Instead of writing you a check for $2.4 million, which you may have to pay taxes on (gift tax rules), I buy your $500K house for $3 million. Or there's other reasons. Maybe I want to buy it this year so I can sell it for a big loss next year for tax reasons.

The market value is the price someone is willing to spend.....within reason.

Here's another one for you. My kids set up a lemonade stand to sell glasses of lemonade for 50 cents. Some old rich guy walks buy and pays them $1000. Is the market value for their lemonade now $1000 and should they continue to sell future glasses for $1000 or is the market value still 50 cents and the old guy gave them a $999.50 gift?

These boosters NIL deals contain very little market value, the "extra" is a payment "to play."

 

[Sean Miller Fan]

View embedded media

What was your point in posting a real NIL deal from a real, national company for one of the most famous college athletes of all time?

 

[pafootballguy]

You can't restrict how much a booster wants to pay an athlete. They can take the full amount. However, if the clearinghouse says it's worth $10K but you paid them $1 million, then the $990,000 extra is considered pay for play, which is against NCAA rules. So they can keep the $1 million. They'd just lose eligibility because they'd be considered a pro.

Then the player will sue the NCAA for restricting their ability to earn and the NCAA will lose just like they have lost that argument at every turn.

 

[BigChungus90210]

I admittedly haven't read too much into this so this is a genuine question - how are they going to enforce that the details of these deals get disclosed to Deloitte to even make a determination?

 

[pafootballguy]

I admittedly haven't read too much into this so this is a genuine question - how are they going to enforce that the details of these deals get disclosed to Deloitte to even make a determination?

Without the ability to subpoena bank records it will be hard to know what deals have been signed and how much has been paid.

 

[pittdan77]

You don't get it. That's not hard to understand. Let's say we are good friends and I'm a rich guy who wants to gift you $2.5 million. Instead of writing you a check for $2.4 million, which you may have to pay taxes on (gift tax rules), I buy your $500K house for $3 million. Or there's other reasons. Maybe I want to buy it this year so I can sell it for a big loss next year for tax reasons.

The market value is the price someone is willing to spend.....within reason.

Here's another one for you. My kids set up a lemonade stand to sell glasses of lemonade for 50 cents. Some old rich guy walks buy and pays them $1000. Is the market value for their lemonade now $1000 and should they continue to sell future glasses for $1000 or is the market value still 50 cents and the old guy gave them a $999.50 gift?

These boosters NIL deals contain very little market value, the "extra" is a payment "to play."

There are not qualifiers on market value. "Within reason", is just conjecture.

The lemonade example is a bit over the top, even for you. It's like you're arguing that the kid who found Skene's number one baseball card received improper compensation for it because the card itself was only worth a couple of quarters while it was still inside the pack. But if that glass of lemonade is the last one on earth it's possible that $1000 is a deal. But even in your home example, there was some sort of value in why you were deciding to spend that money. It's intrinsic to the transaction. Whether you are being creative with the math for tax avoidance or you are just writing a check, the value hasn't changed. It's still a $3 million transaction.

Look, if some goofy booster wants to start collecting the socks that get worn on gameday and can buy them for cash, you're telling me that a random accounting firm can step in and decide if the Holstein kid got too much for them but Duzz can cash checks all day long and I'm telling you that ain't gonna fly because it's a very arbitrary constraint that isn't based in reality. You're just capping one person's ability to capitalize and it has absolutely nothing to do with value.

 

[happjack]

Then the player will sue the NCAA for restricting their ability to earn and the NCAA will lose just like they have lost that argument at every turn.

This, this, this!

 

[mlvnsmly]

You don't get it. That's not hard to understand. Let's say we are good friends and I'm a rich guy who wants to gift you $2.5 million. Instead of writing you a check for $2.4 million, which you may have to pay taxes on (gift tax rules), I buy your $500K house for $3 million. Or there's other reasons. Maybe I want to buy it this year so I can sell it for a big loss next year for tax reasons.

The market value is the price someone is willing to spend.....within reason.

Here's another one for you. My kids set up a lemonade stand to sell glasses of lemonade for 50 cents. Some old rich guy walks buy and pays them $1000. Is the market value for their lemonade now $1000 and should they continue to sell future glasses for $1000 or is the market value still 50 cents and the old guy gave them a $999.50 gift?

These boosters NIL deals contain very little market value, the "extra" is a payment "to play."

This is stupid, even for you. Your first hypothetical is commiting fraud, and it wouldn't even work because you'd still owe capital gains tax on any profit of over 250k or 500k if married filing jointly. So a fraudulent transaction would not be considered fair market value. And you'd go to prison as the dumbest criminal of all time. The second scenario is called a tip. 50 cents for the product. duh.

Let's say this were to hold up in court. And let's say a player is offered 200k, but that isn't "fair market value" by your standards. what's to stop someone from getting creative and offering 10 deals at 20k each or any other number of workarounds?

Face it, you've been wrong this whole time and this isn't happening.

 

[Sean Miller Fan]

Then the player will sue the NCAA for restricting their ability to earn and the NCAA will lose just like they have lost that argument at every turn.

They aren't restricting their ability to earn. They can still accept the above market deal. They just lose their eligibility. They can still go out and sign new NIL deals even without being eligible.

 

[pittdan77]

Without the ability to subpoena bank records it will be hard to know what deals have been signed and how much has been paid.

And even if they could, it's all arbitrary because what Bama or USC or FSU or Texas is willing to give the Manning kid to play is exactly what he's worth to them. Or their boosters. Or their collective. But I'm going to guess that the tennis team won't have any interest at all in him. That's how value works.

I think what SMF fails to realize is that you're going to have very different values depending on who is buying them and where they live.

 

[Sean Miller Fan]

Your first hypothetical is commiting fraud, and it wouldn't even work because you'd still owe capital gains tax on any profit of over 250k or 500k if married filing jointly. So a fraudulent transaction would not be considered fair market value.

Thank you. We agree!

 

[pittdan77]

They aren't restricting their ability to earn. They can still accept the above market deal. They just lose their eligibility. They can still go out and sign new NIL deals even without being eligible.

Sure they are. Telling someone that they can't play if they are offered something beyond an artificial cap is absolutely restricting their ability to earn.

 

[Las Panteras]

If I am not mistaken, the bank definition of market value includes the phrase "buyers and sellers acting prudently".

The analysis of NFL deals is a start. Eventually, historical NIL deals given to college players will be considered as well.

Howevet sadly...the "acting prudently" piece will remain elusive.

 

[pafootballguy]

They aren't restricting their ability to earn. They can still accept the above market deal. They just lose their eligibility. They can still go out and sign new NIL deals even without being eligible.

Losing eligibility will restrict a players ability to earn and the NCAA has already lost that fight by trying to restrict transfers. They have lost damn near every lawsuit dealing with NIL and transfers because they all violated the law.

The only way to change any thing is with unionization and collective bargaining but we are not close to that yet.

 

[pittdan77]

The only way to change any thing is with unionization and collective bargaining but we are not close to that yet.

No reason for the players to form a union when they are winning every fight.

 

[Sean Miller Fan]

Sure they are. Telling someone that they can't play if they are offered something beyond an artificial cap is absolutely restricting their ability to earn.

How? They aren't paid to play and they can still advertise products.

 

[pittdan77]

How? They aren't paid to play and they can still advertise products.

Because the restriction is on future earnings. If you're paying someone to play for you, you kind of want them to play. For you. If there is a cap that prevents a kid from playing then you've artificially capped his ability to earn more or earn from more sources.

 

[Sean Miller Fan]

Because the restriction is on future earnings. If you're paying someone to play for you, you kind of want them to play. For you. If there is a cap that prevents a kid from playing then you've artificially capped his ability to earn more or earn from more sources.

But again, the players aren't paid to play. So if a kid loses his eligibility for accepting an above market deal, he is still free to sign other NIL deals. He is obviously very marketable if someone was willing to pay him $1 million. Companies will be banging down his door.

I'll help you out here since you are struggling. His argument would be that the loss of his eligibility negatively effects his ability to land future marketing/advertising deals. And while that may be true, that is something that is hard to quantify because the player still has SOME marketability. This is a slippery slope. Next, does the starting QB sue the coach for loss of marketability when he is demoted to 2nd string?

 

[NCPitt]

What was your point in posting a real NIL deal from a real, national company for one of the most famous college athletes of all time?

You really don’t understand?

 

[mlvnsmly]

How? They aren't paid to play and they can still advertise products.

But if they can't play, you devalue their name, image, and likeness and harm their ability for future earnings. Not only would it be struck down, but you would be liable for damages also. Nice try Matlock.

 

[pittdan77]

But again, the players aren't paid to play. So if a kid loses his eligibility for accepting an above market deal, he is still free to sign other NIL deals. He is obviously very marketable if someone was willing to pay him $1 million. Companies will be banging down his door.

I'll help you out here since you are struggling. His argument would be that the loss of his eligibility negatively effects his ability to land future marketing/advertising deals. And while that may be true, that is something that is hard to quantify because the player still has SOME marketability. This is a slippery slope. Next, does the starting QB sue the coach for loss of marketability when he is demoted to 2nd string?

If they aren't being paid to play, why is there a need to cap their earnings?

As to the second paragraph, the logic goes way off track by suggesting a player could sue if they are demoted. It isn't even material to the discussion.

 

[Sean Miller Fan]

If they aren't being paid to play, why is there a need to cap their earnings?

As to the second paragraph, the logic goes way off track by suggesting a player could sue if they are demoted. It isn't even material to the discussion.

They aren't capping their earnings from real NIL deals. They are telling them you are free to accept that amount but if you do, you will be considered a professional and lose eligibility. It's not a "cap." It comes down to whether the player is a pro or not or whether the NCAA should continue to require amateurism.

 

[Sean Miller Fan]

But if they can't play, you devalue their name, image, and likeness and harm their ability for future earnings. Not only would it be struck down, but you would be liable for damages also. Nice tryamateurs.

I understand all these arguments. A player will likely sue and win. But the P4 want this and it would be absolutely fantastic for the game if it holds up. So I don't think it's the slam dunk everyone thinks it is.

 

[pittdan77]

They aren't capping their earnings from real NIL deals. They are telling them you are free to accept that amount but if you do, you will be considered a professional and lose eligibility. It's not a "cap." It comes down to whether the player is a pro or not or whether the NCAA should continue to require amateurism.

You mean like how the NCAA used to say taking a job from the wrong person in the summer time was tantamount to being a pro and losing eligibility?

 

[pafootballguy]

I understand all these arguments. A player will likely sue and win. But the P4 want this and it would be absolutely fantastic for the game if it holds up. So I don't think it's the slam dunk everyone thinks it is.

It is doa and the P4 wanting this will not impact if it holds up in court. The NCAA will not even have an argument based on previous court rulings.

 

[King Of All Message Boards]

You don't get it. That's not hard to understand. Let's say we are good friends and I'm a rich guy who wants to gift you $2.5 million. Instead of writing you a check for $2.4 million, which you may have to pay taxes on (gift tax rules), I buy your $500K house for $3 million. Or there's other reasons. Maybe I want to buy it this year so I can sell it for a big loss next year for tax reasons.

The market value is the price someone is willing to spend.....within reason.

Here's another one for you. My kids set up a lemonade stand to sell glasses of lemonade for 50 cents. Some old rich guy walks buy and pays them $1000. Is the market value for their lemonade now $1000 and should they continue to sell future glasses for $1000 or is the market value still 50 cents and the old guy gave them a $999.50 gift?

These boosters NIL deals contain very little market value, the "extra" is a payment "to play."

You don’t get it. You can want it or think it’s good for the game. It probably would be. But keep spinning yourself into knots - this isn’t gonna stand.

 

[Sean Miller Fan]

More detailed information on how the P4 will enforce "outside" NIL deals. This would be so awesome if it's able to beat the eventual lawsuit.

Conferences planning creation of enforcement entity to oversee revenue sharing with college athletes

College conferences are planning the creating of a separate enforcement entity that would implement a system of revenue sharing with athletes.

www.usatoday.com

 

[BigChungus90210]

More detailed information on how the P4 will enforce "outside" NIL deals. This would be so awesome if it's able to beat the eventual lawsuit.

Conferences planning creation of enforcement entity to oversee revenue sharing with college athletes

College conferences are planning the creating of a separate enforcement entity that would implement a system of revenue sharing with athletes.

www.usatoday.com

So Players are expected to self report their deals? And what if a company instead decided to make constant $600 payments rather than a lump sum deal?

 

[pittdan77]

So Players are expected to self report their deals? And what if a company instead decided to make constant $600 payments rather than a lump sum deal?

So they set up a system that lets them cheat the system. Makes sense.

 

[Sean Miller Fan]

So Players are expected to self report their deals? And what if a company instead decided to make constant $600 payments rather than a lump sum deal?

First of all, NIL deals with "companies" have nothing to worry about as legit non-booster companies have to make their deals at fair market value because they answer to shareholders or a board.

Now, if "fake companies" or booster collectives set something up where they pay the player $599 per day, I'd assume there would be some rule against that. But even if there isn't, $600/day from the booster collective is only $219,000 so not really a lot.

 

[pittdan77]

Now, if "fake companies" or booster collectives set something up where they pay the player $599 per day, I'd assume there would be some rule against that. But even if there isn't, $600/day from the booster collective is only $219,000 so not really a lot.

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.