Collective Contracts, Title IX & My Review of EA CFB 25 | NIL Blitz: Jul. 15 - Jul. 21
Happy Monday!
I hope you all had a fantastic weekend. (This is a pre-drafted Blitz as I hit the road for a family wedding. Hoping nothing industry-shattering happens while I'm away.)
This is a power-packed edition beginning with the latest perspective on collective contracts and wrapping with a personal review of my first gameplay of EA SPORTS College Football 25. Grab your favorite beverage, settle in, turn up "Blitzkrieg Bop" by Ramones, and let's dive right in!
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1. A Brief History on the Evolution of Collective Contracts ?
The collective space is often described as tumultuous, but as the Wild West had many more regulations than perceived, collective contracts have a much richer evolution than meets the eye.
If you want to get academic, by definition, a contract is a written or spoken agreement that is intended to be enforceable by law. Since the first collectives formed in 2021, there were always contracts. We'll focus on the written contracts in this Blitz even though the verbal contracts are certainly the ones that get attention (cc: the Rashada incident).
Keep in mind some of the earliest collective contracts were relatively simple, year-long agreements to which athletes were signed with an undefined list of deliverables alluded to. Some paper to put ink on to make both sides feel like this was more than just a cash grab. There has been much change since then.
The catalysts? Timing, Transfers, and Transactions. These three were driven by questions which have led to change.
Timing - How long do we sign an athlete for? Do we pay an athlete up front for future deliverables? Do we add retention incentives for athletes who stay longer with the program?
Transfers - What language can we include that does not explicitly violate enrollment contingency rules? How do we set contract term dates to mirror transfer windows? How do we protect from needing to pay an athlete who has transferred?
Transactions - What do we ask athletes to do to meet quid pro quo requirements? What deliverables do we ask for to provide the most value for our contributors? How do we drive meaningful commercial business through our contacts?
I was debating adding a fourth "T": Trouble. Morality clauses, similar to those of the Nike and Adidas' ambassadorship programs of the world, are also prevailing for collectives.
Comments were made last week by Georgia's Classic City Collective that they withheld upwards of six figures worth of NIL payments from several football players involved in racing and speeding incidents. This move underscores the collective's commitment to maintaining high standards of conduct among its athletes. According to the On3 article, these withheld funds are substantial, emphasizing the serious nature of the infractions. The collective's decision reflects a broader trend in the NIL landscape where behavior and compliance with team, academic, and community standards are becoming increasingly important.
As the NIL era marches on, expect more collectives and brands to implement similar measures to ensure that athletes uphold their responsibilities and reputations.
2. Title IX and the House Settlement ??
If you're a frequent reader of the Blitz you know Title IX manages to sneak its way into about every discussion. And rightfully so - it is a governing pillar of higher education enveloped by a commercialized industry that is far from equitable.
Title IX states that benefits and financial aid must be distributed to men and women athletes proportionally based on roster spots. This comes up most often in athletics scholarship offers and general sport sponsorship. To date, every dollar a school provides directly to its athletes has been intended to cover educational expenses and thus has been considered financial aid. (For more on Title IX, check out this Blitz from a few months back.)
In light of the looming House settlement, the question remains: will revenue sharing be considered akin to financial aid? According to ESPN, the department of education says a rev share model will be subject to Title IX, but fails to offer guidance on how money ought to be distributed.
There's considerable discourse on both sides of the table, but as for schools who have put themselves out there (i.e., Illinois, TCU, Ohio State, etc.) and "committed" to the future model, they have ensured payments comply with Title IX. Even for those who likely are not in a position to max out the $20M-$22M cap (i.e., Utah State, Fresno State, etc.), they have also indicated they will make compliant revenue sharing payments.
It is my understanding that many of those waiting to reveal their rev share budgetary plans are either (a) still concocting their methodology or (b) awaiting the long-form to drop to mirror the backpay ratio as designated by the settlement (i.e., 75-15-5-5).
3. The Johnson Case, Pt. II ??
Let's dig in a little bit further than we did last week on the Johnson case. (RE: the Third Circuit recently upheld the decision to deny the NCAA's motion to dismiss, allowing the headliner case on athlete employment to proceed.)
The court's detailed opinion challenges the NCAA's stance that student-athletes are not employees, suggesting that their extensive athletic commitments might qualify as work under the Fair Labor Standards Act (FLSA). Key word: might. The opinion states, "the time student-athletes dedicate to their sports is comparable to work under the FLSA, and therefore merits compensation." If the court sides with the athletes, it could lead to significant changes in how student-athletes are compensated, including minimum wage and overtime pay.
I caught up with Kam Cox , Illinois' Assistant AD for Strategic Initiatives and an NIL legal mind, to get his insight. In his words, the release of the opinion was “an important step in a case that could have existential implications for the uniquely American interaction of higher education and athletic competition."
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"Since the passage of the autonomy rules about a decade ago, those institutions with larger athletic budgets have had the flexibility to share greater parts of their revenues with student athletes, and a quick statistical analysis would suggest that they have done so. In many ways, the proposed terms of the House settlement furthered that trend."
Cox is not alone either, taking after former Ohio State AD Gene Smith who was quoted saying, "it’s unreal; they have meals at their disposal. They get cost of attendance, they get Alston money. They get free education. So, it was already revenue sharing.”
Cox goes on to note "the implication of Johnson is not about providing institutions with flexibility. Read strictly, the test presented by the Third Circuit could potentially require every institution to pay wages to every student athlete, and the overwhelming majority of institutions simply cannot come close to operating in the face of such a massive expense."
Paul McDonald, the lead plaintiff's lawyer in the case, holds to a key assertion that the argument for athlete employment is not / should not revolve around discrepancies between sports of a "fabricated" concept of revenue generating sports vs. non-revenue generating sports, but, rather, that athletes should be compared more closely to the student workers who are running concessions, taking tickets, etc., who are governed by FLSA regulations.
It is likely a couple of years before this case is decided but if you align that with the impending '25 rev share structure that means one could rightly assume this post-settlement rev share world could experience another reformation in its first few years. When asking Cox about it, his thoughts were similar.
"That is what makes this case existential: while it has proven not to be the case that no institution can pay any student athlete, it is surely the case that every institution cannot pay every student athlete. The latter is on the table here.”
If you're interested in learning more, I suggest this podcast interview with the plaintiff's lead lawyer or catching up with industry folk like Kam.
4. Opendorse's New CEO: Stephen Denton ??
One Opendorse update for you - Opendorse has appointed Stephen Denton as its new CEO!
If you haven't yet, I encourage you to brush up on Stephen Denton 's inauguration and acumen (and affinity for the Blitz). Apart from formalities, one main question I heard this week from partners was “What does this mean for us?”
All good things - you’ll be seeing a lot more of Blake Lawrence ! He steps into the role of President of Collegiate Operations. In his words, "I’ve always had a passion for bringing more value to our college partners, and this evolution made perfect sense. I’ll be focusing exclusively on working with our collegiate and collective partners to ensure we continue to deliver exceptional value."
Furthermore, Stephen brings a strong professional background in the commercial space to the team which will undoubtedly accelerate that dimension of Opendorse . As reported in NIL AT 3, the commercial segment is already projected to flourish this year so this added firepower is timely.
With the combined strengths of Stephen, our founders, and the existing leadership team, Opendorse is in excellent position to achieve its goals and continue its legacy of success.
There are great things on the horizon - welcome to the team!
5. The Return of the College Football Video Game ??
If you don't care for video games, breathe easy because this will likely be the last NIL Blitz update I give on EA CFB 25... until something changes next year, ha.
But if you already think this game has gotten too much attention, I would argue this is innately relevant to NIL for three reasons:
Okay, so I'll admit the game was great and it made me feel like a 10-year old going to play with my neighbor again. The design was exceptional, the gameplay was easy to pick up yet challengingly realistic. The attention to detail is what made it for me.
I played my first matchup as the Nebraska Cornhuskers vs. Memphis Tigers in the Duke's Mayo Bowl. I've gone to Charlotte the past two bowl seasons (h/t Miller Yoho) for this game and they matched the look and feel of the stadium down to the very Twangy signage.
I followed up by playing as the FAU (they were the next Opendorse partner school I had a meeting with so it felt fitting, s/o Justin Campbell + John E. Stephenson, Esq. ). One thing that caught my attention quickly in that second game? About 8 months prior I was in the Owls’ football team room presenting on NIL. The guys’ names jogged my memory instantly, and I even remember using several of them as my example athletes during my education session.
It was a very cool, full-circle moment for me to see a digital (yet tangible) outcome of NIL which has been long awaited for better part of the last decade.
(I have yet to play the Road to Glory mode and secure my first NIL deal as an up-and-coming recruit, but that’s a write-up for another time.)
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Thanks for joining for another edition of the NIL Blitz. It’s crazy for me to think it has been almost an entire year of publishing these publicly. I know the public audience doesn’t receive all of the juice that the internal Blitz comes with, but it’s fun to receive feedback from readers sharing how much they enjoy it each week.
Here’s to continuing to help the 900+ checking in weekly – have a great week!