Fake Contracts and 40% Fees: College Athletes Get Scammed on NIL Deals
An interesting article (unfortunately $$) discusses how students are being scammed and sometimes giving away their rights in perpetuity without knowing what they are signing.
Here are a few highlights:
Savannah Schoenherr was fresh off a second-place team finish at the NCAA gymnastics championship last year when a business opportunity hit her inbox: A New York clothing brand offered her $1,500 to model its apparel.
She jumped at the chance....
Schoenherr and a company director exchanged nearly 15 emails. ....
One week later, a $3,000 check arrived. She deposited it, but before she could pay the $1,500 for the supposed facility fee, the check bounced. Schoenherr realized she’d nearly been scammed.
What happened to Schoenherr is part of a larger wave of questionable business deals, disreputable agents, and outright scams targeting college athletes since they gained the freedom to profit off their name, image, and likeness two years ago. And the NCAA, which long fought against athlete compensation, prohibits university staff from offering legal advice to students navigating the offers.
......
Former University of New Mexico track star Kendall Spencer—who in 2015 became the first student-athlete to serve on the NCAA Division I Board of Directors—said NIL’s full complications won’t be evident for years.
“It’s just like concussion,” he said. “You’re not going to see the detrimental effects now. You’re gonna see it five, six, 10 years down the road when someone has signed away their NIL for life.”
OMG. Skeezy con man preys on silly college student! More at 11..
Follow some South American soccer and see where this really goes.
So because it happens over there, this is okay and we should move on?
In Iraq, Saddam shot a player for poor play. So, what happens in SA is nothing.
A Colombian defender was murdered for allowing an own goal in the World Cup.
Obtuse and callous is no way to go through life
Just when you were nearing the points to start your own threads.
Such a shame.
/s
And the NCAA, which long fought against athlete compensation, prohibits university staff from offering legal advice to students navigating the offers.
So the organization whose mission is, in part, to ensure student-athlete well-being and safety actually prohibits universities from protecting their student-athletes? Makes sense.
NCAA and real world are two terms which never appear in the same paragraph. except here, of course.
I used to think the NCAA was useless, like a paperweight in the age of electronic offices. Essentially harmless and impotent, but not serving any purpose.
The last few years have really brought into focus that the NCAA is both useless and malignant. It is too incompetent to actively execute evil, but it actively gets in the way of good things being accomplished all the time.
You really don't want universities placing themselves in an advisory role to athletes with all of these little NIL deals. That's what an attorney is for. We can be all "get it" and tell these kids to get out there and get paid while at the same time keeping them under the protective wing of the state.
Also, there would be a huge potential agency problem for an attorney paid by a university to review contracts for a player. Also too, a huge liability. No thank you.
I understand what you're saying about potential conflicts (though I think such conflicts are largely waivable and, as for agency concerns, attorneys have a duty to the bar above any duty to an employer...yes, I know how that often goes) but you realize that all enrolled students are eligible for legal representation through UMich's Student Legal Services right? Not just for lease disputes and MIP tickets? So the NCAA is actively preventing Michigan athletes from receiving a benefit that any other student can receive.
Also, I can only imagine how popular an "NIL Clinic" would be at the law school. I guarantee that clinic would fill in nano seconds.
That would be a great way of boosting sports law at various schools.
I sincerely doubt that the University is helping students negotiate contract terms through their student legal aid program. I mean these are contracts for what in many instances are high dollar, high profile arrangements. It's not the type of thing student legal aid is designed to address, which falls more into the "My identity was stolen, or I am being evicted" range of issues.
It doesn’t have to be ”universities appointing lawyers”. When I was at UM, we had “student legal services” available - basically law students offering free legal advice. It was hugely helpful in dealing with our landlords who illegally withheld our security deposit.
Nor does it have to be “negotiating contract terms” - a simple review for red flags indicating potential fraud or abuse would be hugely beneficial on its own.
So, the NCAA depriving student athletes of getting the same service? That’s a net harm. You can keep your straw men.
It's not a straw man argument. It's a very real issue. Do you honestly think legal aid would look over a contract offer to a graduating senior from Google and advise them on whether or not they should sign on the bottom line? I mean, they could probably review any non compete clauses and comment on those, but anything beyond that and they are getting out ahead of their skis.
Or what about an aspiring young tech entrepreneur? Would legal aid say "sure. We'll incorporate that startup for you"? I seriously doubt it. That's because these programs are meant to assist students who run into common student legal issues (primarily involving landlords, but I have also seen them address low level criminal charges, identity theft, employee/employer conflicts, paternity issues, debt collection etc.). They're not our there helping LLCs register trademarks or untangling complex licensing deals.
But by all means, these kids are getting free tuition, meals, travel, stipends and NIL money. Let's just have the taxpayer cover their legal representation too as they are building their fortunes
If anyone really wants to know how the NCAA works please watch South Parks crack baby basketball.
They hit the nail on the head and nothing will ever change
Seriously though, I've asked the question for years and have yet to find an answer. What does the NCAA actually do?
They don't protect athletes, they don't govern the universities, they don't really negotiate deals (at least not recently), and they can't even defend themselves or their archaic business practices. What does the NCAA do?? Worst organization ever invented. It's not even close. Chiquita Bananas has done more for the world than the NCAA.
They provide income to VPs who don't have the talent to be executives in real organizations. They're basically a white collar country club charity, best I can tell.
How do I join?
Though it was a while ago - I believe the NCAA was more understandable and consistent prior to Mark Emmert's tenure as President.
So, in my mind - the principles of the NCAA were clear; however, Emmert was asleep at the wheel and failed it's member institutions and student athletes in numerous ways.
And yet the NCAA continues to exist with apparent support from the member schools. Why?
https://www.ncaa.org/sports/2021/5/4/finances.aspx
About 60% of the NCAA’s annual revenue — around $600 million — is annually distributed directly to Division I member schools and conferences, while more than $150 million funds Division I championships.
Oh, now I see...a self-funding SRO that doesn't actually regulate anything and distributes excess March Madness profits to the member institutions
The NCAA is the member schools. It’s not some government oversight committee.
Yeah, players need agents or at the very least lawyers to look over those kind of contracts. I work in a profession where my likeness is my bread and butter. I know I signed some bad contracts when I first started in the biz. And no, not porn. I didn’t get any of those offers.
"... players need agents or at the very least lawyers to look over those kind of contracts."
Yes. Hopefully the legal ecosystem will develop quickly. I'd expect there are already some people ready to guide student athletes through NIL.
It's idiotic because the schools can't provide that service. Imagine if the Law School and Ross could offer to help players with those contracts. It would be great real world experience for the students, and meaningfully beneficial to the athletes. Win win, except the NCAA is barring it from happening.
I get it, but I don't want the university on the hook if something goes sideways. Best they seek independent legal counsel.
^^^ This. ^^^
Look at this list of Univ of Michigan law clinics and tell me the liability here is more significant.
Just to name a few...
International Transactions (and a separate "Transactional Law" clinic)
Federal Appellate Law
Community Enterprise
Entrepreneurship
Civil-Criminal Litigation
You're telling me that the law school should be more concerned with liability with a gymnast's several-thousand-dollar endorsement deal than with an international business deal?
Turning people loose to seek deals independently is how we got into this mess in the first place. I think the university owes its players some degree of help and protection. As an institution of higher learning, the university has an explicit remit to foster the development of young people. Turning them loose for liability reasons doesn't align with that goal. The athletes should certainly keep the right to choose to retain independent counsel in addition to the university if they see fit, but I think the university owes them a baseline level of representation.
In theory, that does seem to be the best way to go. However, who hires the lawyers? If they are from the university, how can they reasonably and ethically with respect to their client (the university) be what is best for the players. I cannot believe this is something I am saying, but in this scenario, is unionization of college athletes what it will take for this to be handled ethically and responsibly for all parties?
My first reaction was, "kids, too young to know any better".
And then I thought about the modeling, film media, music, various gadget royalties, and even medical device usage contracts I've read that (ugh) have been signed - by "not kids" - and I realize that it's not just "kids".
Before you sign *anything*, get a second set of (hopefully experienced) eyes to take a look. Sure, everyone hates lawyers ---- except when they're on your side acting as good counselors. Or. If you have a friend or relative who has a decent eye for details and potential gotchas.
Stop, put down that pen. Think. Get a second (or third) opinion.
- end minor rant
If the person across from you appears too giddy and anxious for you to sign that contract right away, that's a telltale sign that this needs to be read over 4 or 5 more times.
Yeah this is not really a story. People try to scam college kids all the time- athletes/NIL or not. When I was in college (10ish years ago) a “company” offered me $2,000 to wrap my car in a redbull advertisement. I was old enough and wise enough at 21 years old to google this offer and saw it was a scam. They sent me a physical check with the direction of “cash this check, keep 500 as your first payment and send the rest back in cash”.
College students aren’t little kids- they can work through this.
Yes, and I have some oceanside property in Arizona to sell you
The NCAA screwed collegiate athletics by allowing nil without rules and precedent set in place first. And without providing a set of base contracts that may be signed to protect the athletes and must be submitted, approved by NCAA or school attorneys paid for by the entities offering the NIL deals to the athletes. Also specified legal procedures for NIL contract disputes including location city, county and state the signed athletes reside.
If the schools had wanted that to happen, it would have happened. My guess is that the schools didn't want to place themselves in a position where they could be accused of restraint of trade.
NIL rules need to be a matter of law, not school policy.
When Alexander II freed the serfs he got a lot of shit from the various noblemen. His response was “better that this come from above than below”.
If the NCAA had been open to NIL they could have managed the transition and set up rules and guardrails to protect the students
The NCAA didn’t allow it. They were forced to accept it when courts consistently ruled that athletes (not just athletes, everyone, but the cases were brought by athletes) have the right to control and profit by their name, image and likeness. The universities and NCAA don’t have the right to stop them from that.
Who could have seen this coming? Surely the government will protect them /s. There’s always going to be a group of economical losers that need to cheat to survive. Some even just thrive on the sociopathic/sadistic joy of fooling others. Either way, I’m hit with about half dozen texts with malware links a week. The personal level of targeting is what makes this so effective. I’m much more likely to respond/pay/whatever when someone knows my name, I play sports, I go to UM…etc
The article linked is not the article quoted.
We’ve been scammed!
Johnny Fontane signed a bad contract with a band leader. He got out of it no problem.
I don’t know how these fucksticks live with themselves. I still feel bad about a rude comment I made 20 years ago
Simply put, they're sociopaths.
The worst part is the older you get, you still remember that rude comment. That and you remember all of them.
It makes me wonder if some people are thinking - "It was so much easier and simpler when we just brown bagged."
The problem is that the NCAA still maintains the amateurism certification for prospective students:
https://www.ncaa.org/sports/2014/10/6/amateurism.aspx
The dichotomy between NIL and amateurism, both of which are official NCAA stances, creates situations like these. Sure, you can go get your money but neither your school nor the NCAA can help you because you're an "amateur" athlete. Any help or payment from the school or help from the NCAA would nullify your amateur status. Go get paid, but do it on your own time.
I wonder if the NCAA takes mustard or melted cheese with their pretzels.
Look at the NIL links for Michigan for the T-shirts of committed athletes.
$40 for a T-Shirt that normally sells for $25 (like a typical shirt from the MGoStore). How much of that goes to the athlete? At most the additional $15 (assuming no other "fees", lawyer costs...).
That's $15/$40 to the athlete or 37.5%.
If the NCAA is concerned about corruption and booster, then allow Universities with law schools to create NIL clinics for non-revenue sports athletes.
At Michigan, they offer an international transactions clinic and a bunch of other areas of law that are much more complex. A NIL clinic would be a boon to sports law students.