How NIL collectives are responding to early-season coach firings

By the conclusion of Week 5 of the college football season, five FBS head coaches had been fired, each at the Power 5 level. Some combinations of athletic department and university leadership at Nebraska (Sept. 11), Arizona State (Sept. 18), Georgia Tech (Sept. 26), Colorado (Oct. 2) and Wisconsin (Oct. 2) decided a coaching change was needed.

The combined buyouts owed to those schools’ now-former head coaches, prior to any potential offsets due to their contractual duty to mitigate, is reportedly nearly $60 million.

That means many donors have likely had, and in the future will have, to make decisions about the discretionary income they’ve personally earmarked for the betterment of their alma mater’s athletic department.

Do they partake in the proverbial passing of the hat in order to help buy out one coach’s contract and then help fund his replacement? Do they instead focus on funding NIL opportunities for athletes at the school, especially as a preemptive or preventative measure for the betterment of their school’s roster since the Transfer Portal window will open in roughly two months?

Do they do both? Neither?

“It is clear that in that situation, donors have to turn their focus to something other than NIL, which is mainly supporting either buyouts or whatever financial situation may be coming up for the athletic department,” a board member of a NIL collective that supports athletes at a school that made an early-season coaching change recently told On3, speaking on condition of anonymity.

“That does understandably in some ways take priority over NIL and then I think in our situation, it’s not like we have to, like, eliminate that, it just kind of put a delay on things.”

Sun Angel Collective President Jeff Burg said the collective hasn’t changed its approach after Arizona State fired Herm Edwards and it’s too soon to analyze what effect, if any, the coaching change has had on fans’ commitment to NIL.

“Two weeks in, I don’t know that I’ve got enough data to say that we’ve seen a big change,” he said. “We were on a ramp-up anyways, in terms of people joining the collective. If you said, ‘Alright, did that trajectory change in terms of how many people are signing up on a week-over-week basis from before to after?’ I’ll say that that number hasn’t changed. That trajectory line hasn’t moved.

“But I don’t necessarily know that that means that there hasn’t been an impact.”

Donor competition only ramping up between NIL collective, schools

Competition for donors has escalated in the NIL era.

“Many supporters are expressing interest in providing NIL opportunities to student-athletes,” Wichita State Director of Athletics Kevin Saal wrote in a letter to fans in late August. “However, it is important that these dollars be in the form of additional gifts above and beyond restricted/unrestricted annual operating gifts to Shocker Athletics, to avoid negatively impacting annual operating expenditures.”

That paragraph of the letter was written in bold font.

According to the most recently available financial data from the 2021 fiscal year, the 52 public Power 5 institutions reported an average of more than $21.7 million in contributions, according to copies of their NCAA Membership Financial Reporting System (FRS) reports obtained by On3.

That’s more than $1.1 billion in total.

NCAA Membership FRS reports define contributions as cash and marketable securities received from individuals, corporations, associations and foundations, including amounts received above face value for tickets, that are provided and used by the athletic department in a given fiscal year.

The average contributions reported by public Power 5 schools were even higher in the 2020 ($24.6 million) and 2019 fiscal years ($26.6 million), the latter of which was the last full fiscal year prior to the onset of the COVID-19 pandemic.

Contributions also include funds used for “the payment of debt service, lease payments or rental fee expenses for athletic facilities in the reporting year.” In addition to coaching and support staff salaries and buyouts, facilities are part of the reason why there’s nearly a one-to-one ratio between increases in athletic department revenue and expenditures.

“From a NIL perspective, I think that all schools, especially Georgia Tech, the fan base needs to understand that there’s basically another channel that now exists that needs funding beyond contributions to the athletic department and commitments that people have there, they need to maintain,” Stephen Weitzel, a Georgia Tech alum and donor who organized the collective Swarm the ATL, told On3. “I got a lot of questions at the beginning of Swarm the ATL launching where people wanted to know, ‘Should I reroute some of my contributions from the Georgia Tech Athletic Association into NIL?’

“And I said, ‘Absolutely not because they still need our money. There are facilities that need to be kept up and they need our resources.'”

One collective: ‘NIL at the end of the day is really to recruit’

Nebraska was the first Power 5 school whose athletic director made a coaching change this season.

The leaders of The Big Red Collaborative, a recently launched NIL collective designed to help Nebraska athletes’ NIL opportunities, believe the creation of the collective could help not just players on the football team, but also potential coaching candidates.

“The reality, whether any of us like it or not, is that NIL at the end of the day is really to recruit and retain when you want to look at it from a coach’s or an athletic department’s point of view,” Joe Petsick, an advisor to The Big Red Collaborative, told On3’s Jeremy Crabtree. “Knowing you’re doing a coaching change is probably when your roster and recruits become most vulnerable. Being in a position to have a tool – and in this case a new tool – I think a coach can understand what’s in place to deliver significant impact and that certainly is helpful.”

The 1890 Initiative, another Nebraska-focused NIL collective, recently launched and it’s absorbing Athlete Branding & Marketing, which was the first collective to support Nebraska athletes’ NIL opportunities. Former Nebraska Senior Associate AD for External Engagement Matt Davison, a former Nebraska wide receiver, left the role to become the president of The 1890 Initiative.

The Varsity Collective supports the NIL opportunities for athletes at Wisconsin. One of the collective’s leaders said its mission won’t change, even after the football program’s head coach did.

“We’re thankful for the impact Coach (Paul) Chryst has had on the program over many years,” The Varsity Collective Executive Chair Rob Master said in a statement provided to On3. “He has always been dedicated to supporting the student-athletes he coached both on and off the field. Providing support to the players in the program is The Varsity Collective’s main objective, and our vision will not change as Jim Leonhard steps into the head coaching role.

“From his time as a student-athlete at the University of Wisconsin as well as his coaching career, Jim knows what it means to represent the program and the University. We’re confident he will be a strong leader for the remainder of the season and that the student-athletes are in good hands.”

‘Playing the NIL game’ through collectives

While the 2022 college football season is the second one in the NCAA’s NIL era, in many ways it’s different than 2021 due to the creation of more than 160 NIL collectives nationwide and the often-speculated ties between NIL and the Transfer Portal.

“This year feels like the first year that’s really upon us,” ESPN analyst Kirk Herbstreit told On3 in August, regarding NIL and what it takes for off-the-field storylines could reach the broadcast booth.

The layers of NIL that didn’t exist when the 2021 college football season kicked off but that exist now, such as the emergence of collectives, could alter the role of a head coach, or at least his staff.

“I think that this is true not just of Nebraska but of any program in the country that if the athletic director and head coaches on campus embrace NIL, then they will have a competitive advantage over those that do not,” Opendorse CEO Blake Lawrence, a former Nebraska linebacker, told On3’s Pete Nakos. “That’s true. And then a coach’s ability to recruit top talent, as well as recruit top supporters for their NIL initiatives in their market, may become just part of the job.

“The thing about this, in the history of college athletics, the athletic director is often times the tip of the spear when it comes to raising capital to fund whatever projects they need for the department. But now with NIL being a reality, the head coaches become the tip of the spear in rallying support from those in their community [to] create opportunities for student-athletes on their team.

“So yeah, I think the NIL earnings of football players will have an impact on your entire evaluation of a coach.”

A similar message has spread through message boards and tailgate lots across the country.

“I heard it said at a tailgate a few weeks ago that there’s another coach at a school near us who has effectively said, ‘I need $3 million in NIL or you can look for $12 million to fund my buyout and really the choice is yours,'” Swarm the ATL’s Weitzel said. “That’s really the reality these days that programs that want to win and they want to be competitive, if they aren’t playing the NIL game and they’re not supporting it, it’s going to be really, really challenging to get the student-athletes that you want because they’re going to be able to find a very lucrative offer somewhere else.”

Weitzel relayed a stat he has heard that somewhere around 40% of Georgia Tech alums will become millionaires. Maybe the exact percentage is a little off, “but it’s a lot,” he said.

Using some back-of-the-napkin math, Weitzel estimated that only one-eighth of Georgia Tech alums, however, live in greater metro Atlanta, follow Georgia Tech athletics and are interested in financially supporting the Yellow Jackets.

“It’s also important for alumni, local businesses and fans to understand that we need your support in the NIL space as well to be able to help our coaches get the best student-athletes they can to put on the court and on the field,” he said.

‘They want to be there to still support the players’

YOKE, a company that provides athletes with the business tools and technology to launch membership-based communities, supports dozens of NIL clubs around the country. Similar to other companies in the space, YOKE’s NIL clubs allow fans to pay for digital and in-person access to athletes.

So far, the YOKE-backed NIL clubs are exclusive to FBS football players, although YOKE CEO Mick Assaf has previously told On3 the company plans to launch clubs featuring players who compete in other sports.

The players who opt-in equally share 72% of the club’s revenue. YOKE earns the rest. A machine-learning algorithm helps establish a monthly goal for each club, which is listed publicly on each club’s website.

YOKE supports NIL clubs featuring players from four of the five Power 5 programs that experienced a coaching change through the first month and a half of the season.

“The nature of what happens on our platform really isn’t impacted much, I think, when I look at the churn rate of subscriptions,” Assaf told On3. “Those schools are actually performing better than the average so I think from our perspective, I could definitely see it being impactful at certain places when you’re talking about buyouts and stuff like that, but the average person, through the Tempe NIL Club, through the Boulder NIL Club, is contributing, you know, less than $30 a month.

“I think more than anything, those fans, they want to be there still to support the players and I think a lot of the times when coaches leave, it’s rarely the players’ fault, especially considering half of the team has been there for less than two years.”

Here are the number of active members of each club and the amounts they’ve contributed, as of Oct. 12:

• Boulder NIL Club: 100 active members have contributed $3,880.50 of a $5,000 monthly goal
• Tempe NIL Club: 64 active members have contributed $2,595.00 of a $10,000 monthly goal
• Lincoln NIL Club: 97 active members have contributed $2,174.00 of a $5,000 monthly goal
• Jackets NIL Club: 19 active members have contributed $1,035.00 of a $5,000 monthly goal

Prior to Week 6’s games, Assaf said some of the highest-trending content across YOKE’s NIL clubs were player podcasts through the Tempe NIL Club. He said the club currently has as much engagement as it ever has.

“A lot of the fans,” Assaf said, “don’t seem to view supporting the players as part of the problem but more so as part of the solution and so it’s probably why those schools are actually in the bottom quarter in terms of people who are canceling their subscriptions or no longer supporting the team through their NIL club… I think in some ways, the engagement looks like it’s up at those clubs, which is obviously a little surprising but I guess it kind of makes sense. You know, news creates interest and then people want to hear perspective on things that are happening.”

On3’s Pete Nakos and Jeremy Crabtree contributed to the reporting.