Are scholarship counts relevant anymore?
With NIL, it doesn’t seem like scholarship counts should be relevant anymore. If a 5 star player can get an NIL deal worth $500k to $1m per year, which would be enough to cover tuition, room and board with a sizable chunk of change remaining, could the player decide to go the walk on route, pay their own tuition with their NIL earnings, and save a scholarship slot for the program to bring in more talent? The top talent would ultimately not receive scholarships anymore under this construct because rich alums and businesses are compensating enough for the top players to pay their own way and leave scholarships for good players who will contribute but cannot demand big NIL deals.
If the deals are paying enough, then scholarships should be irrelevant to some of the players unless the NCAA has roster size limits not tied to scholarships. Does someone know whether there’s any rule that would stop the scenario above?
January 12th, 2022 at 12:59 PM ^
No one is going to pass up a scholarship to pay their own way
January 12th, 2022 at 1:18 PM ^
Exactly this. Very few athletes would have enough passion for their school to think about doing this. J.J. McCarthy may be one of the rare examples who might do this if presented with enough $.
January 12th, 2022 at 3:43 PM ^
It is worse than just money / pride - I remember the whole Jace Howard scholarship question.
Walk-ons do not get all of the perks and access that scholarship athletes get, so it is a non-starter to pay star players to be walk-ons.
January 12th, 2022 at 1:35 PM ^
Money is fungible. I can up your NIL arrangement by $60K, and ask you to walk-on. Why would you care how the money comes in?
January 12th, 2022 at 1:56 PM ^
One is an elimination of a partially deductible expense, the other is fully taxable income. The differences in math matter, quite a bit.
January 12th, 2022 at 2:18 PM ^
Then you increase the NIL money by however much is needed to offset the increased tax burden. I do have to wonder if the athletes and their parents will see it this way, though, but it is a possibility if you can sell it to them.
Realistically, though, I don't think it'll be a big factor except in some edge cases. With the transfer portal in full swing, teams just aren't going to be able to stockpile talent beyond existing scholarship limitations.
January 12th, 2022 at 2:25 PM ^
You're taking his $60k figure too literally, because math also allows you to pay someone a higher amount that will net them a certain figure after tax. Say he has a 30% combined tax rate. Yes, if you only give him the $60k needed to cover what a scholarship otherwise would, he'd only net $42k. So instead you pay him $85,750, and he nets the $60k after taxes.
January 12th, 2022 at 4:38 PM ^
Need to consider the impact on a fund's cash balances. Paying someone more depletes balances faster (obviously) as opposed to letting the educating entity absorb the costs on its own financial statements. You can neg me all you want, but the math of a fund's entity is zero sum.
January 12th, 2022 at 2:56 PM ^
Walk-ons don't get money for school supplies, nor do they get food, room, and board. They are not allowed to partake in any team training table food. It's easy more than just the academic scholarship.
January 12th, 2022 at 1:01 PM ^
Maybe
January 12th, 2022 at 1:02 PM ^
I don't know
January 12th, 2022 at 1:02 PM ^
It says an awful lot to a player if you're willing to offer a scholarship. So while even though the cost of tuition and living expenses can be offset by NIL money, if a school is offering the free ride it says they prioritize you as a player and you likely have a clearer path to playing time.
So yes, they are (for now) still very meaningful.
January 12th, 2022 at 1:08 PM ^
Why would a player cost themselves five figures a year in income to leave a scholarship open for someone else? Someone good enough to get serious NIL $ isn't going to be an attractive target for "hey, we really like you, we want to win, could you do us a big favor and spend some of your NIL on tuition so that we can get someone else?"
I'll reset my perspective if this actually happens... but I don't think it is at all likely that this happens.
January 12th, 2022 at 1:11 PM ^
I'm not sure how much NIL money it takes to make $50k+ a year seem like small potatoes
January 12th, 2022 at 1:13 PM ^
100% agree with this. Cost of a 4-year tuition, room & board is $200k+. Why would someone choose to pay this if they don't have to?
January 12th, 2022 at 2:02 PM ^
Because they don't have to.
The money is paid by the boosters in the form of extra NIL money, just for this scenario - to get over scholarship limits.
Imagine this conversation, it could easily happen:
5-Star QB recruit: "What kind of NIL deal are we looking at here?"
NIL Sponsor (i.e. Booster): "Son, we will make you a deal: We will give you two choices:
1) A $1,000,000 NIL deal.
2) A $1,300,000 NIL deal, but you come in as a walk-on and use the extra $300,000 to pay the scholarship yourself. What is in it for you? We have freed up a scholarship that the team will use on an additional 5-star WR to join you in your incoming class."
It would need to be a unique situation where you have a savvy kid in a leadership position who really wants to be on a team and help build that team, and can put his ego aside and come in as a walk-on, so that the team can have more scholarships when they are against limits.
Note that the kid does not sacrifice any actual money, the NIL deal covers the scholarship with extra money if they will walk on. It is just the ego aspect of being a walk-on.
But they can make up for it with a stronger roster of the positions that complement their skills . . . more WRs for a QB, more Rush DEs for a LB, etc.
Tom Brady does this all the time. He does not take as much money as he could get so there is more available to get targeted players on board. He has Gisele's money to make up the difference. In the college NIL case we are talking about here, the recruit would have the extra NIL money to make up the difference.
It would take a unique, savvy, investment-minded kid to do it, but they are out there.
January 12th, 2022 at 3:07 PM ^
That presumes that your boosters paying the NIL money have an unlimited amount of money. Presumably the $300,000 extra you pay in NIL money comes from a somewhat fixed pot of NIL money. It also presumes someone else wouldn’t be willing to offer you $1,300,000 plus a scholarship.
It also assumes that $1,000,000 NIL deals are both real and sustainable. I would argue both of these points are far from certain.
January 12th, 2022 at 3:20 PM ^
The extra pool of "overcoming scholarship limits" money would need to be a limited, targeted amount. It could not be too large, because it would reduce the money you can use on regular NIL.
It would only be offered in specific cases, not everywhere. It is a way to get a few extra targeted players on board beyond scholarship limits.
You could not build an entire shadow roster with it. (At least I don't reasonably think you could, but I am always surprised at how much money gets thrown around willy-nilly.)
January 12th, 2022 at 2:14 PM ^
$200K? It's $300K out of state!
https://admissions.umich.edu/costs-aid/costs
Which walk on gets that for an NIL? Wouldn't that money be for scholarship level players?
I make decent money and have saved for my kids' college education. But no way I'm paying that much for an undergraduate education...especially if I can get a full ride elsewhere. We had the exact situation with my kid.
On this subject, Michigan has the 9th largest endowment of ANY school ($17B!), public or private, and has the highest out of state tuition and one of the highest in state tuitions.
I guarantee you the Regents will raise tuition going forward nor will they find a way to make the school more affordable for upper middle class families. They don't get it.
January 12th, 2022 at 1:13 PM ^
Agree 100%. Scholarships are also so fluid that at the time of the transfer you can't be sure if you'll be tight around 85 or have a bunch of fall training camp transfers and be closer to 80.
I also wonder if walk-ons have access to less stuff. Do they get the free tutors, training, and the dozens of other niceties that scholarship players get? That's something I really don't know about but I do know there are roster limits on how many walk-ons you can bring into training camp and how many players you can bring on the road.
January 12th, 2022 at 1:28 PM ^
I want to say that walk-ons don't get the same level of access/support as scholarship athletes, but I could be wrong.
January 12th, 2022 at 2:01 PM ^
Just texted my old roommate who was a PWO during the Hoke years and he had all the same perks as the scholarship guys. Just had to pay tuition, room & board, and other related expenses out of pocket.
January 12th, 2022 at 1:13 PM ^
Maybe possible at the largest NIL schools. Would still be an issue for schools that don't have any athletes making 6 figs in NIL, which I imagine may be 90%+ of FBS schools, 99%+ of FCS schools, and all D2 schools.
In the rare situation in which this could apply, I see it more likely that we magically see NIL deals that exactly match tuition for walk-ons.
January 12th, 2022 at 1:15 PM ^
You don't get rich by giving away money.
January 12th, 2022 at 1:35 PM ^
And what return are most of these NIL sponsors actually getting for their "investment"? Most are literally giving away the money so they can brag about their sports teams.
January 12th, 2022 at 1:47 PM ^
First, NIL isn't an investment, it's an expense. I don't believe for a second that local businesses are literally giving away the money so they can brag about their sports teams. If they are any sort of savvy, they are accounting for it as an advertising expense, which is hugely important since they get to count expenses dollar for dollar against their revenue to determine their taxable income. And if I were them, I would also hope for some increase in business, contacts, etc by riding the coattails of the popular athlete in my town, whether its more people coming in for a tattoo, more people through the drive through, more people test-driving carts, etc.
Second, this is about the student-athletes, not about local businesses. If I'm a broke kid going to college, what incentive is there to me to make all this NIL money only to give it to the school. For the kids making the serious NIL money, the viewpoint is that the school is benefitting from their presence. They can now take their talents anywhere and collect some sort of payday. South Beach is just as good as South Bend so long as it gets you into the League someday.
January 12th, 2022 at 2:12 PM ^
NIL can absolutely be considered an investment, whether it is a business hiring athletes for a commercial or if it is an individual purchasing an autograph... or even the dubious NFTs. Whether it is a *sound* investment is a different question.
Let's not couch this as an argument about people doing what is "best" for the players either. The majority NIL of sponsors/donors/etc. are not doing this out of concern for the financial security of the students (who are already getting $200k+ in equivalent value from tuition, room, board, etc. - *from the schools themselves* - over the course of their college career). They do it because they want their team to win.
January 12th, 2022 at 2:18 PM ^
I bet you are great to be around at parties or have a face to face discussion with. Nothing more enjoyable than having someone pop up, twist what you said for their own purpose, and then completely ignore your attempt to clarify. Upvoting yourself is just the cherry on top. You're like a pop-up ad personified.
January 12th, 2022 at 3:08 PM ^
I'm sorry you feel the need to resort to ad hominems. I try to keep discussions civil whenever possible.
January 12th, 2022 at 3:23 PM ^
It's not an ad hominem attack because I'm not using it to distract from a weakness in my argument. To do that, we'd have to actually engage in an actual discussion or discourse about the same content. I called you a pop-up ad because that's how you were acting. Now I'm going to call you an ignorant, self-righteous pop-up a[ss]. Again, not because my argument is weak, but based upon my first-hand observation of your conduct.
January 12th, 2022 at 3:33 PM ^
I'm glad you so clearly invested the time to look up the formal definition of ad hominem before responding to my post. I think you may want to reconsider your interpretation of that definition though, but I digress.
My commentary regarding the motivation & application of NIL is still accurate (keep in mind that NIL extends far beyond business activities such as product endorsements & marketing), but if you would like to make a logical counter argument I am willing to entertain it.
The original issue is whether those providing the money for NIL are genuinely expecting a positive financial return from it or are they effectively "giving away" the money since they do not expect much/any return?
January 12th, 2022 at 3:05 PM ^
I don't believe for a second that local businesses are literally giving away the money so they can brag about their sports teams.
That's exactly what they're doing and you're naive to believe otherwise. Al Glick didn't give so much to the athletic department so he gets more business for Alro Steel. He did so he can brag to his friends about having the access at the athletic department that he enjoys, and to be able to sit courtside at basketball games, travel with the team to bowl games, etc.
January 12th, 2022 at 3:27 PM ^
Exactly this. We normal humans are in awe of the amount of money being donated so we tend to think there has to be some financial payoff.
But this is just play money for these guys. They don't need a financial payoff, they already have that part of their life more than covered.
What they crave is the non-financial payoff - the attention, the adulation, the access, the ego stroking that they get.
January 12th, 2022 at 5:41 PM ^
From my perspective as a fund manager and a business owner, you are 100 percent correct.
Money that I contribute to an NIL entity needs to be accounted for as my marketing expense. I get to use someone's NIL (their "property") to advance my business prestige, image, sales, etc., which advances are my ROI.
January 12th, 2022 at 1:48 PM ^
That is the crux of the problem
NIL was envisioned as a sponsor getting a return on his investment for a player's NIL. A car dealer attracting some extra customers to show up on a Sunday because the local college star WR is giving out t-shirts with his picture on them.
In that case, there is a natural cap on the NIL money, to be able to provide a return on investment.
But when you have billionaires and millionaires doing it just for ego, there is no cap.
January 12th, 2022 at 1:20 PM ^
Yes it could happen.
It would not completely replace scholarship limits, but it could fill in the gap with a few key "walk-ons".
If a team is hitting its scholarship limits and still needs some key interested recruits, the boosters could entice those recruits with "extra" money to cover the scholarship.
Obviously it would need to be a recruit that really wants to go to that school, and the deal would need to make it so that the money to pay the scholarship is extra NIL money and not having to be covered by the player.
We kind of saw that idea here at Michigan with Brian Griese. He wanted to come here, his father could pay the scholarship to get him here, and then he become a scholarship player later. He was never a typical walk-on.
The same kind of thing could happen with an NIL sponsor instead, to pay extra NIL money to pay the scholarship to get a willing kid to go to a school that he is interested in, but that is short a scholarship.
I could see a savvy QB recruit doing something like this to get a targeted WR recruit on board to a team that is short on scholarships, for example.
Kind of like how Tom Brady does not take as much money as he could get so there is more available to get targeted players on board. He has Gisele's money to make up the difference, the QB recruit would have the extra NIL money to make up the difference.
January 12th, 2022 at 1:26 PM ^
Why would a student athlete give up his own money to go to school when he can go for free? Let alone convince enough of them to do it that scholarship numbers become irrelevant.
January 12th, 2022 at 1:34 PM ^
He does not give up his own NIL money to pay the scholarship, he gets extra NIL money to pay the scholarship. (See my comment above.)
January 12th, 2022 at 2:59 PM ^
That is exactly what I was thinking when I made this thread. I think some players would like getting the extra NIL money that is earmarked for tuition. When they become draft eligible, they get to keep half a year’s worth of that earmarked money when they disenroll. This actually creates a financial incentive at the end of their college career (not that it matters at that point when they’ll make millions more in the NFL months after).
January 12th, 2022 at 6:30 PM ^
At that point you just have boosters sponsoring the scholarship and it’s still a scholarship.
January 12th, 2022 at 1:36 PM ^
Almost none of these student-athletes are paying with "their" money.
January 12th, 2022 at 1:27 PM ^
college football is a shit show right now
High School sports are trending the wrong direction very quickly as well.
We need some NIL controls in place to keep the competitive balance
Not all changes are good for the overall health of society (example-social media), but I will shut up with my old man rant now
January 12th, 2022 at 3:08 PM ^
I agree with this. There's a sentiment that more is always better, and more will mean a better, more competitive team. But the one caveat is the player himself. An 18 year old with that kind of money could end being a liability to the team. If there are no parents/responsible adults around him with knowledge of how to handle that kind of money, bad things can happen. Just ask lottery winners who suddenly had millions at their disposal. I'm not against players getting compensation but dropping a ton of money in some very inexperienced kid's lap with no oversight is a recipe for disaster.
January 12th, 2022 at 4:03 PM ^
The problem here is that people want it both ways: they wanted the ncaa to get out of the way of limiting player outside income yet they want a body to regulate it.
The Supreme Court has essentially said that NIL is normal/legal commercial activity, hence no one can effectively regulate it besides the standard government restrictions on individual business actions.
People (many of them part of this blog) demanded to open Pandora's box. They got their wish.
January 12th, 2022 at 1:29 PM ^
Others could probably add more to this but is there not other benefits to being scholarship vs. walk-on other than the actual scholarship?
January 12th, 2022 at 1:31 PM ^
BYU basically worked out an NIL deal where all of their walk-ons get their tuition paid by a sponsor. This kind of gets around scholarship limits but not all the way. I’m sure one of the more sketchy programs will find a way to push the limits of the well intentioned idea.
January 12th, 2022 at 1:38 PM ^
I don't know if the Ivy League counts as sketchy, but that's a bit like the arrangement they've had for student-athletes for a while now.
January 12th, 2022 at 1:35 PM ^
I also think the NCAA would be smart enough to pull the rug away if schools starting being 20 over on scholarships by just having them pay their own way. I know this thing seems to have no limits right now but I don’t think they would be cool with some schools having a bunch of 4 and 5 stars that are “walk ons” because they are paying them enough so that they don’t need scholarships.
January 12th, 2022 at 1:43 PM ^
They would certainly recognize the problem. I am not convinced that they would (or could) address the problem. Unless they put a hard cap on roster size and did not focus on scholarships.