Why Spartan Dawgs 4 Life voided Michigan State football players' NIL contracts

Nearly four weeks ago, multiple Michigan State athletic leaders threw their support behind the brand Spartan Dawgs 4 Life in a video posted across social media. Announced as the official NIL brand for the Spartans, through a partnership with Playfly’s Michigan State Sports Properties, it was a clear call for Michigan State fans to donate and support NIL activity. 

Tom Izzo led the charge, with his booming voice opening the video with a simple call to action: “NIL is here to stay.” 

Athletic director Alan Haller soon appeared, along with multiple coaches. Mel Tucker was absent from the video, which was released four days after USA Today reported the head football coach was the subject of sexual harassment claims made by prominent advocate and rape survivor Brenda Tracy.

Hours after the news broke, MSU suspended the head football coach. He was formally fired for cause last week. 

Now almost a month after the video dropped, the future of Spartan Dawgs 4 Life – commonly referred to as SD4L – is unknown. SD4L launched in August as an apparel brand to support NIL activities with offerings similar to many NIL collectives, such as tailgates and member events.

SD4L emailed Michigan State football players Friday night who were en route to Iowa City for Saturday’s game against Iowa that their contracts had been canceled, multiple sources confirmed to On3.

Roughly 35 to 40 athletes were under contract, a source told On3. Now fewer than five still have deals. A source indicated to On3 that a driving reason behind the decision to cancel the contracts is a shortage of funds. In a statement released late Friday night, SD4L said it had secured under 100 subscriptions since, falling short of its projected growth models.

SD4L is owned and operated by Michigan State booster Steve St. Andre, who worked with Mat Ishbia to donate $24 million to Michigan State a week before Tucker signed his contract extension in December 2021. He ended up signing a 10-year, $95 million contract.

“Michigan State Athletics greatly appreciates the continued support of Steve and Teresa St. Andre and the leadership they provide in NIL and philanthropic support,” Michigan State associate athletic director and NIL advisor Darien Harris wrote in a statement to On3. “We are grateful for SD4L’s continued investment in Spartan student-athletes and will continue to support their efforts to the extent permissible.”

The timing of the decision to void the contracts comes at a critical point. In college football, players can play four games without burning their redshirt for the season. Saturday against Iowa marked the fifth game of the season. Those redshirt decisions are even more important in the transfer portal era, with an extra year of eligibility at stake. 

As one agent told On3: “I’ll tell you exactly what happened. They don’t want to pay out contracts for athletes who plan to enter the transfer portal.”

“Spartans don’t do this to Spartans,” a high-level Michigan State donor told On3.

Yet, SD4L’s contracts with most of the Spartans men’s basketball team are still intact. The NIL brand is an LLC, not a 501(c)(3) like many in the space operate. 

This is Sparta! is a fund within Charitable Gift America and has served as an NIL collective at Michigan State since February 2022. With more than 100 athletes under contract, the collective has only worked with a few football players. Now it’s being asked to take on five SD4L contracts. 

“It’s a total dumpster fire,” said another agent who has a couple of clients on the Michigan State roster and primarily works in the high school space. He encouraged the athletes to read the contracts and not to sign, but ultimately pocketing the money was a priority. 

NIL will play role in Michigan State’s coaching search

To win at the highest levels of FBS, simply put, NIL matters. Coaches across the country have quickly realized NIL has become the driving force in recruiting, roster maintenance and winning in the transfer portal. Multiple sources in the industry continue to indicate to On3 that NIL is a major factor in whether or not coaches accept a position, just like resources, facilities and salaries.

So what comes next for Spartan Dawgs 4 Life will make an impact on the Michigan State coaching search. Urban Meyer told The Athletic‘s Bruce Feldman on Wednesday he has no interest in the job. As Haller continues to vet candidates, the NIL structure will become a talking point.

“There are mechanisms in place for Spartan Dawgs 4 Life to come back strong,” On3’s SpartanMag publisher Jim Comparoni said. “The timing of this stage in its development is awkward, but I think Michigan State eventually could have an effective two-pronged approach. I hear from a lot of fans who would like to donate, but they would like Spartan Fund points to be attached to it, and a tax-deductible option would suit some of them as well. So, we’ll see.”

How was SD4L able to void the contracts?

Multiple sources have indicated to On3 that the agreements included a simple termination clause, allowing the brand to cancel the contracts at any time. Through a month-to-month contract, athletes were paid out for their monthly deliverables. Athletes were also given the right to terminate their agreements if the collective went bankrupt. 

The termination clause is frequent in collective agreements. Since the inception of name, image and likeness in July 2021, donor-funded organizations have become a necessity to retain and attract talent. Collective agreements will always be crafted to support the best interests of the organization, attorneys Darren Heitner and Mit Winter agreed.

“If you’re the collective or the collective’s legal counsel, then you are going to want language in the agreement that is quite friendly and allows a quick and dry termination,” Heitner said. “So, it’s fairly standard for an initial draft to contain this type of language. That’s why it’s so important for the athlete to have strong legal counsel to spot such language and use any available leverage to negotiate a modification before execution.”

Along with his day-to-day role as an NIL attorney, Winter is a board member of Athletes.Org, the recently launched membership organization for college athletes. Termination clauses are common in the world of NIL. As long as the collective fulfills the requirements, there’s nothing an athlete can do to push back, Winter said.

“People have been giving Spartan Dawgs 4 Life some flack for having the ability to terminate the deals, but a lot of deals will give the athletes the ability to terminate as well,” he said. “Most of them say that the collective needs to send a written notice, which is that email in this situation. Usually, they’ll even include an email address, here’s the email address you need to send that written notice. As long as they comply with that, they’re good.”

The NCAA has long pushed Congress for NIL legislation, which would include a standardized contract. Without any guidance or law in place, there are no requirements on what can and cannot be included in a contract except for pay-to-play wordage.

What does this mean for NIL collectives?

As the NIL space has continued to mature, so have collectives. The Collective Association launched this summer as a trade association for Power 5 NIL entities, now standing at 21 members.

But canceling athletes’ contracts is a bad look for the collective industry as a whole. Multiple NIL collectives opted not to comment on the situation, hoping to stay away from the situation. This comes roughly 10 months after a Florida NIL collective voided four-star quarterback Jaden Rashada’s $13.85 million contract. 

Collectives are already battling donor fatigue, the last thing many can suffer is losing the fanbase’s trust, which also serves as its donor base. SD4L will have a tough time convincing Michigan State fans to continue contributing after this, Winter said.

“There’s already the narrative out there amongst some groups that collectives are bad guys and taking advantage of athletes and shadow characters, which obviously isn’t necessarily the case,” Winter said. “When people see things like this happen, it just feeds into that narrative. Collectives are businesses, like any other business they have to watch out for revenue coming in, revenue coming out. They have to make business decisions. 

“With everything going on at Michigan State, from a public perception, it doesn’t look good. People can use this to continue to paint that picture as bad guys.”