Johnson, Donor Points & the Video Game is Back | NIL Blitz: Jul. 8 - Jul. 14

Today's Blitz is a complete journey.

We're going to run the gamut starting with a meticulous assessment of the Johnson v. NCAA court opinion and ending with a elementary breakdown of a video game that just released today.

(This is a perfect read for someone who loses attention as articles carry on!)

Hop on in if you're ready for the ride!

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1. Johnson v. NCAA Developments ?
2. The 12-Month Donor Point Bonanza ??
3. Campus-Level Innovation ??
4. House Settlement News ??
5. NIL: It's in the Game ??

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1. Johnson v. NCAA Developments ?

There was a nuanced news break last week that will take a bit of brain power to understand, but bear with me because it could cause even great disruption in the collegiate space than the House settlement has already.

In a government building in Philadelphia last Thursday, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal of the NCAA’s motion to dismiss the Johnson v. NCAA case.

A dismissal of a dismiss request - double-negative here meaning that the NCAA and Power Conferences won't get out of the case quite like they had hoped.

Quick Cliff's Notes are that in 2019, a conglomerate of college athletes across several schools had personal experiences and convictions that led them to believe they ought to be paid for their contributions to their respective schools. Their lawsuit focused on their "work" at practices and games being considered under the Fair Labor Standards Act (FLSA) of 1938, a labor law that creates the right to a minimum wage, "time-and-a-half" overtime pay, among many other rules that govern a typical American's day-to-day work life. In other words, they are calling for minimum wage under the protection of the FLSA for their time spent representing their schools.

I read all 65-pages of the opinion and have some thoughts myself. The opinion read very mathematical in nature, almost like a proof where the table had to be set first. Here are some takeaways:

• The term "student-athlete" was put into question | The namesake of the case, Ex-Villanova and Pittsburgh Steelers DB Trey Johnson, in particular argued that athletics were the forced priority, not school. According to the opinion, "Johnson was allegedly required to spend weekdays from 5:45 AM to 11:30 AM practicing or engaging in other activities related to athletics. This commitment locked him out of hundreds of available classes, including prerequisites for certain academic degrees."
• A serious boiling down of the definitions of "work" and "play" | Mentioned twice, there is a struggle for the "striking breadth" to which FLSA could cover an athlete's current schedule. This struggle to pin down a definition is what appears to have sent it back for another courtroom.
• A lot of wild precedence was cited | At my count, there were previous court cases referenced ranging from forced labor and cults to coal miners and Enterprise Rent-A-Car. The American legal system builds itself on precedence, something the NCAA has benefitted from too. It was mentioned that "for over 65 years, courts across the country have determined that student-athletes do not qualify as employees" - but it may change. In fact, the case cited by the NCAA most often, NCAA v. Board of Regents of the University of Oklahoma (1984), was called out as unrelated to compensation rules.

So, what does this even do?

Right now, nothing besides pushes an outcome down the road. As mentioned in other reviews, it will likely take years to play out. However, this is another shot across the bow for the industry in advance of the "employment model" many anticipate to be coming.

What does this mean for NIL?

Similar to the above, nothing for now. As acknowledged by Opendorse 's own Katie Hoffman , "it is likely to be awhile before this case comes to conclusion, but it will be interesting to watch the developments, and how they may affect other things (like the House settlement) along the way."

Stay tuned!

2. The 12-Month Donor Point Bonanza ??

Last week, the University of Nebraska became the second school to publicly announce plans to give benefits to collective contributors. They are second to the University of Virginia who, back in April, announced their Sabre Society perks would extend to contributions to the Cav Futures Foundation for NIL. Both schools began awarding donor points the first week of the month and are reaping the benefit of amended state laws.

Is this a big deal? Ask a collective operator and they will say absolutely. For the better part of the past three years collectives have worked tirelessly to gift any sort of benefit in return for the money they've pooled together. Following the string of IRS communications, the 501(c)(3) setups are a dying breed. Many collectives get creative with programming and special content access. But the ability to give back to a contributor the same benefits that had previously received for scholarship or facility donations is big.

Can other schools do this? This is entirely school risk assessment. I spent a lot of my time with schools last week talking about this, and even for schools in the two states mentioned above there is concern of going against NCAA regulations. There are schools without legislative protection pushing for it and others with the legislative protection who are leary. It varies.

Another comment I heard was, "so what, aren't we all going to be doing this in a year anyway? Why do we need to get ahead of this now?" To the back half I don't disagree - revenue sharing and direct athlete compensation will open this up.

But to the first half, both the Cornhuskers and the Cavaliers can't wait to get started.

3. Campus-Level Innovation ??

Two brief shoutouts for some pioneering efforts:

• Oklahoma announced the preemptive hiring for their new "recruiting operations: Curtis Lofton (Football GM) and Jake Rosenberg (Partner, The Athlete Group). This duo puts the Sooners at the forefront of institutions looking to get ahead of the NIL/Rev Sharing future. Expect many, many more partnerships and hirings like these to follow.
• Hawaii announced a jersey patch collaboration with their collective. This is the first public example of a school utilizing the "required athletically related activities (e.g., practice)" language to their advantage from the May NCAA Ed. Columns. Anticipate more creative approaches to monetizing practice time both with collectives and brands.

4. House Settlement News ??

An article was published in Yahoo! on the marquee settlement shed some but not-as-much-as-we-hoped light on the case. The noteworthy details are:

• The long-form filing will be needing an extension, briefly slowing down the charted steps towards settlement
• The concept of a policing arm will likely not be enforcement officers and reinstatement committees as has been historically
• The rev share cap will continue to grow over the next decade, coming close to $20B shared among Power Conferences by the time the settlement's time is up
• The notion of "fair market value" and "true NIL" deals is persevering through the drafting process

Again, expect to see more on this in the next week to 10-days.

5. NIL: It's in the Game ??

Yep, throw some NIL in there -- and I'm not talking about the players'.

Kudos to resident EA College Football 25 expert, Jeff Harris , as he uncovered good detailing about the "brand" growth a gameplayer could expect in their Road to Glory mode:

Name, Image, and Likeness (NIL) deals are a significant aspect of your journey as a student-athlete, offering you opportunities to become an ambassador for various brands and earn rewards.

As part of the scenarios you encounter, you may be presented with NIL deals. To be offered an NIL deal, you must have an open NIL deal slot, which is determined by your brand level. The higher your brand level, the more NIL deal slots you will have available, increasing your opportunities for brand partnerships.

NIL deals come with a duration for which they will run and an energy cost associated with them, as they require some of your time. The energy cost can be either an upfront cost or a weekly cost over the course of the contract. Managing your energy and time effectively is crucial to balancing your commitments.

Accepting an NIL deal comes with rewards, which can be provided upfront, weekly, or at the conclusion of the deal. These rewards can be:

• Gameplay Bonuses: Improvements to your in-game attributes, such as enhanced catching ability, increased speed, or better stamina.
• Off-Field Bonuses: Enhancements to one of your meters, such as increasing your number of followers, boosting your coach trust, or improving your health.

When deciding whether to accept an NIL deal, consider the associated energy cost and the potential rewards. NIL deals provide valuable opportunities to enhance your brand and gain various benefits, both on and off the field. By strategically managing these deals, you can maximize your rewards and grow your influence as a student-athlete.

An example NIL deal you could earn is with a physical therapy center. As a part of their deal, they want you to participate in a regional commercial shoot that will air during the next month. While you won’t physically pose for the camera this year in Road to Glory, the deal will cost you two energy up front. In return, they will give you free physical therapy sessions which will give you immediate wear and tear recovery and improve your health. By taking the deal and getting the health recovery, this will enable you to do other things during your weekly agenda time management.Keeping your brand high ensures you will always have the best opportunity to secure more NIL deals. Don’t overlook the power of NIL deals and the flexibility they can provide to you in your weekly agenda as a result. Some opportunities and gains will only be possible via NIL deals.

Fun stuff!

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And with that, I am going to go hop on the sticks and play it like it's 2004 on the Gamecube.

Have an awesome week!

Thank you to the 900+ weekly subscribers to the NIL Blitz! I have a lot of fun writing this each week and it's fun to know there are active readers. If you enjoy the Blitz, have topics you'd like to see written about or burning questions, feel free to comment/share/reach out via DMs!