When it comes to NIL collectives, a lot of schools ‘don’t like what they’re seeing’

In the wake of the first National Signing Day of the NIL era, coaches spoke publicly about programs allegedly leveraging NIL deals to attract top recruits. Ole Miss coach Lane Kiffin asked, “What would the NFL look like if there were a couple teams in the NFL where their salary cap was 10 times more than anybody else’s salary cap? That’s where you’re headed. They’re going to have to do something.”

But who is going to do something? And what can be done? Should anything even be done? On3 talked with Peter Schoenthal, CEO of Athliance, who is on the frontlines of the NIL space. During a wide-ranging discussion, Schoenthal touched on the problem with some donor-led collectives, what schools should do if they are not affiliated with one and pitfalls for schools that push the envelope too far.

This is part two of the Q&A; part one was posted Wednesday. This interview has been lightly edited for clarity.

Q: Say I work for a Power 5 school that is not affiliated with a donor-led collective. And I’m frustrated because I look around and see all my rival schools securing great recruiting classes with the help of collectives flexing their financial muscle. What would you tell me?

Schoenthal: There are two kinds of collectives. There is the “pancakes for charity” $50,000 collective [“Horns with Heart” at Texas, where every scholarship offensive lineman receives $50,000 annually to promote charities]; that is not what this space is supposed to be, using charities to funnel money to kids. What I would tell those schools that don’t have a collective is it’s because of the negative connotation out there. The type that I think do work is having one where a booster creates an LLC and there is a platform for local businesses and boosters to get together to connect with athletes at a school-specific marketplace and broker deals, and make sure the school isn’t part of it but that all of those deals are being disclosed. That is what we are starting to do at Athliance; we’re doing an automatic disclosure for these collectives.

Q: Not all, but some collectives have attracted a negative connotation, right?

Schoenthal: Absolutely. In any space, while we figure out the nuances and figure out what the enforcement mechanism is, that’s usually when the bad actors come out to play. I really do think this space will get figured out, and in the next year or so we will have some form of uniform rules and punishment mechanisms and this space will go back to being what we want it to be. 

Q: Because at this point, it seems like just an arms race starring all the blue-blood programs, trying to get the wealthiest boosters to create the most collectives and get the best recruits.

Schoenthal: Here is the problem with that: Confusion leads to inactivity. We’re seeing that with local brands, with boosters. If you don’t know where to go, you don’t act. At Texas, where we have known for years that their boosters fight, that their boosters one-up each other, they’re already at three collectives, which is already getting confusing for their student-athletes. Does that start to work against them? At some point, those collectives are going to have to show that there is a use of NIL and they are not just funneling money to kids. 

Q: Where is the end point? Won’t it just continue to escalate with the top eight to 10 programs?

Schoenthal: The end point is finding a way for all of these deals to get disclosed. So the university can intervene and say, “Listen, we’re not 100 percent OK with this; we need to be able to show that we’re doing things the right way. And so this needs to be altered, this needs to be fixed.” Because we all know, based on the way that college sports has been run forever, schools are responsible for making sure that they’re not turning a blind eye to their business actions. Are there always going to be things that happen in the shadows that the school is not aware of, that it doesn’t have the ability to know about? Sure, that’s always going to happen. It’s the ones that are being done out in the open now that the schools need to at least be able to not only guide their athletes but their boosters about, “Hey, listen, I get that you think you’re helping us but you’re not.” Nobody wants to be the first example. Nobody wants to be the first one that’s restricted with scholarships or hit with a bowl ban. And if this gets too crazy, and Texas turns a big blind eye, and the NCAA does punish, I think you’re going to see a lot of schools being in support of that punishment. I think you’re seeing a lot of schools on the Division I level, probably 80 percent, that don’t like what they’re seeing.

Q: Given the absence of enforcement right now, is it possible for a program that’s not a legacy program with inherent advantages — Alabama, Ohio State, etc. — to secure a great recruiting class and not draw suspicions for allegedly buying players with NIL money?

Schoenthal: No fan base wants to believe their fan base got out-recruited because the kids didn’t want to go to your school. Rumors will always be there. … I do agree with Jimbo Fisher. The kids that he’s recruiting when he’s going up against the Clemsons, the Georgias, the Alabamas — to think that their boosters aren’t also involved in and offering great deals to those kids is the whole misconception in the space. I just think it’s another factor.

Q: Overall, do you feel there is a lack of education in the space?

 Schoenthal: There is just such a lack of education in the space. I was at the NCAA convention recently, and speaking with a bunch of student-athletes that are on a governing board for student-athletes and we’re talking about disclosure, and to hear athletes say, “Oh, if I disclose a deal, that means I have to pay taxes; if I don’t disclose the deal, I don’t have to pay taxes, right?” My head nearly exploded. That’s the missing piece of NIL. This thing was always supposed to be like this great supplement. But at the same time, it should be used as a way to better student-athletes for the time they leave college. Think about it. When students leave college and go into the job force, which is 99.9 percent of them, they have unique skills such as overcoming adversity, working well with others, time management and just the ability to grind. The part they’re missing is they have no experience. But if I can walk into an interview and say, “Listen, I may not have job experience, but I’ve run a business and run the business of me. I’ve filed for an LLC. I’ve taken care of my taxes. I built my brand. I’ve negotiated contracts. I’ve reached out to other brands.” That is what we should be selling kids on, the ones that want to. That’s the whole point of college.