NIL Question- Where does the $$$ come from

I don't know. I've heard of people spending millions for unproven coaches (like .500 record types) with literally no return on their investment. I don't think they even got football enjoyment out of it.

I'm sure that you have seen the ads but local Detroit attorney Mark Morse has been using our players, especially Mike Morris in his commercials.  Other than those, I don't recall others. 

https://www.youtube.com/watch?v=0ZQlLzvIf6k

I did wonder whether the university gets any $$ from Morse, considering that Morris was wearing our maize and blue jersey with the number 90?

I think that $5M figure came from a report about teams trying to poach Drake Maye from UNC. I think this comes more for proven players in the portal than a HS 5* - although they probably fetch a lofty number too.  

Donors, businesses, their own social media following a monetizing them. I’m sure there’s others. 
 

If you own a business and say this kid comes to Michigan and you give him x amount for a marketing deal or what not and he helps sell product or whatever it is you’re doing than it is a benefit. This whole cost benefit risk assessment isn’t always black and white. Just like the value of these deals. 

The $5 million figure is what is reported by "sources" that Drake Maye was being offered to enter the transfer portal from UNC. 

Side note - I have no idea what Maye is getting in NIL money from UNC people but if the $5 million offer was serious, he should have hit the portal. 

The number OSU was claiming that Georgia outbid them with was $1.8 million plus $800k a year

the "market" will correct itself when people realize "oh shit I probably shouldn't have given that guy that's not going to crack the depth chart 7 figures"

Or when these boosters insist that the guy they spent all that money on get played over the better judgment of the coaching staff.

My quick read of the tea leaves is that teams comprised of players paid highly to be there will not take as well to development and tough coaching, and will ultimately underperform their star level. These players will recognize after a few seasons that they've fallen behind their peers in terms of draft potential and will transfer to programs that can actually do that.

I'd also expect that as players with real NFL prospects begin to recognize this, they'll either be more willing to forego immediate recruiting incentives to go somewhere that will better build and prepare them for the NFL, or they'll go get their guaranteed bag as a recruit and then shop for a place that can position them for a career.

I don't know any specifics, but if you look at the incentives, I think you can get a sense of where a lot of schools are.

1) "Legitimate" NIL: Maybe it's actually worth money to you to sell a Blake Corum t-shirt or have JJ in your videogame, or have Marvin Harrison Jr. do a morning shaking hands at your car dealership. That's the simplest one.

2) Boosters contributing to the program: The athletic departments have development offices dedicated to identifying and cultivating people willing to send money over and above their ticket prices to the program. They can presumably go to some of those people and ask for NIL money, whether it's asking last year's grads to give $20.21 to the NIL pool or asking a whale to pay $75,000 to a hot recruit. At some level, reliable boosters get somewhat compensated in access - anything from being invited to meet and greets with players and coaches, getting invited to some practices, etc. Of course, the problem here is that if the Athletic Department asks a booster to give to the NIL side, that's probably going to reduce the amount that booster is willing to contribute to the school.  (So effectively, the school can indirectly fund NIL by asking boosters to do it, knowing that the boosters are probably going to contribute less to the school if they spend more on NIL.)

3) Boosters who want access to players: I don't know which schools this happens in, but there are a lot of people who would be willing to pay for access to the superstar players - agents hoping to sign the players when they go pro, shoe companies who want to lock the starts down, etc. This happened at many schools back when it was completely illegal, so I would imagine it's still going on now that it's quasi-legal.

Let me offer a different approach, i.e., to make money you need to spend money.

When a conference gets paid about a billion per year for TV rights, dividing 5 or 10 percent of that money among the conference's teams to assist with getting top talent may not be a bad idea.

Remember how Michigan Stadium started losing attendees during the end of Hoke's tenure (Coca Cola anyone) and how attendance picked back up when Harbaugh arrived and has stayed that way to this day?  It's all about winning football.  

Look at the math.  Let's say a decent team will pull 20,000 more people per game, a seven game schedule and $200/seat as an average price with the seat license/donation.  That's $28 million in additional revenue from attendance alone plus purchases at the game plus the recruiting advantage from a full house.  If it took $10 million in NIL money from a conference or the program to NIL/buy the talent, wouldn't that be a worthwhile expense to incur?  

So little of what's happening is True NIL.

Here's how I view it:

1. True NIL - Mike Morris.  Makes a commercial with a local businessman and benefits from getting paid for use of his NIL.  Morris is an accomplished M athlete, not a recruit.

2. B.S. NIL - Matt Ishbia paying every male MSU basketball and football player a monthly salary.  Paying players to fake represent a Wholesale Mortgage company.  There is no value to the company there and it violates Title IX. It would possibly be different if UWM was a retail mortgage company.  

3. Collectives.  It depends on how the funds are being distributed.  The legality is real grey here.  It still seems like enticement is being used here.  I can see why Michigan is hesitant to drive more money here.  I could also see this changing to a degree.  

4. Enticement - Most of what's happening is enticement, but because NIL is not being regulated, you are led to believe that it's legal.  It's not.  Schools/Boosters are offering money to kids in exchange for their signature.  Saying, "We will give you 10M over 3 years" to come to USC/FL/GA/AL in the form of a NIL deal is the loophole.  I still think it's enticement and could be challenged in a court of law.

Potential Issues.

1. The IRS.  What happens when the IRS gets back to full speed and starts poking around.

2. Is the money being paid up front?  How is it being distributed? 

3. What happens when you were paid to go to TAM and you transfer?

At least we've got the portal working now.  That's huge for us.  A gift from Santa?

Your dad is a wise man. 

$$$ and the opportunity to play under the best OC in the game! Bonus points if you like your OC to hit on your family members. 

Lol... You're sick for this. I just lost it, thanks for the laugh...

Ben Carlson? 

Humblebrag!!!

Single data point: I'd rather (edit: and do) contribute funds to campus/building renovations or even chaired professorships if the amounts are financially significant. Other than that, I throw a few bucks into the "collective hat" every month that the players can use to defray personal expenses while they're students.

Edit/add: I am not ego driven to see "my" players drive Lambos or G wagons to practice. I'm fine letting them to choose to buy those things after they turn pro. They can wait a few years and prove themselves. College students? Food (lots of milk and steak (not Kosher, BTW)), warm shoes and clothing (because: Ann Arbor!), and a few spending bucks (because: college, enjoy it).

Are we pretending that wealthy people are all brilliant unemotional decision makers today? The world's richest man is busy setting piles of money on fire so he can troll the libs unabated. What's the ROI on owning a yacht? What's the ROI on any hobby? What's the ROI on donating to the athletic department instead of the players? Rich people have money to spend, they spend it on things they like or things that they can use to gloat about to other rich people. College football fits that model.

This is the best, most complete answer on the thread so far, so I just want to expand a bit. 

The hangers-on in the first paragraph have always been there as boosters. The fieldhouse might not be named after Al Glick if he could have given his money directly to players (same with endowed scholarships and coaching positions). So in a sense, the NIL (pay for play) money isn't new, it's just a re-allocation away from the official university channels and directly to players in somewhat murkier ways. 

Second, yes there are legit endorsement deals, but I think they are a small fraction of the total NIL money and value. I'd prefer if NIL were more true to this model - that's the angle that O'Bannon et al started on, after all.

It seems to me that Michigan already did a good job of finding ways to collect "investment" cash from wealthy fans through the old ways - endowment, expensive boxes, naming buildings. Credit to them on that, and locking in enough money to build the behemoth, successful athletic department we have (really punching above our weight class when only OSU and Texas are bigger). But, (I'm speculating here), that existing commitment from donors to the AD caused the department to jealously guard the revenue stream, and did not properly incentivize the AD/University admin to develop NIL programs the way other schools did. Not great, but there is still time to catch up and I think they are and will.

and he would have gotten away with it too....if it wasn't for those meddling kids!!!

MIT almost renamed Stienbrenner Stadium, "The Sam Bankman-Fried Stadium" housing the FTX Engineers football team....   

Can you imagine a comparable scenario in pro sports where a group of fans paid the players and the team just gorged on all the profit? Of course not.

...wait. That's exactly what happens. Fans spend thousands of dollars per year on their pro sports teams - tickets, licensed apparel, streaming services...

Edit: why am i getting negged? Am I obtuse? :)