SI: SEC NIL ‘We’re All Money Laundering’

Jun 3, 2023, 12:17 PM

One SEC athletic director describes the situation in blunt terms: “Let’s be honest, we are all money laundering.”

https://www.si.com/college/2023/05/30/sec-meetings-nil-athlete-employment-collectives-hot-topics?utm_source=Iterable&utm_medium=email&utm_campaign=campaign_6967838

[excerpts from a longer article]

Within the 11-state footprint of the country’s most dominant college football league, fairness is fading, swallowed by the greed of competition from the conference’s very own members. Through lobbying efforts, schools have worked with their state lawmakers to feverishly rewrite statutes to give them an advantage over neighboring programs.

New state laws adopted in Arkansas, Missouri, Texas and Oklahoma clear a path for their schools to bring NIL programs more under their proverbial roof while also prohibiting enforcement from the NCAA and others. This new evolution of NIL collectives tests NCAA and SEC governorship, risks federal rules violations and, maybe most important, pushes college sports another step closer to what many believe is an eventuality: Schools paying athletes directly.

And yet, despite the obvious issues, the movement is sweeping across the Southeast footprint with SEC speed.

“It reminds me of a rigged marketplace,” says Julie Sommer, a lawyer and expert on NIL matters who works for the Drake Group, an organization whose mission is to defend academic integrity at universities. “Federally funded institutions running these enterprises for private gain? The first big question is, what’s the IRS going to do?”

The latest wave of state law amendments bring a school and collective the closest yet. Laws in Arkansas, Oklahoma and Missouri and a bill in Texas (it awaits the governor’s signature) feature language to permit a school’s nonprofit fundraising arm to provide NIL deals, and prohibits the NCAA or any other enforcement arm (i.e., the SEC) from penalizing a school in the state for following the law.

“What’s happening at our state level is exactly what I warned about,” Sankey said Monday from Destin. “Our states are making a mess of college athletics. Our states are adopting laws that are not helpful to conduct conference competition or national competition.”

The Texas law specifically notes that priority points and other perks are permitted to donors for NIL-based donations—a direct contradiction to NCAA rules.

“There is no enforcement, and everybody is breaking the rules,” says Peter Schoenthal, the CEO of Athliance, an NIL management and compliance software that works with college athletic programs and collectives. “Schools are saying, ‘How far can we push it?’”

Donations to the Plus Fund, like those to the 12th Man Foundation, are tax-deductible and earn benefits such as priority points. In satisfying the NCAA’s policy for a quid pro quo, athletes are paid by the Plus Fund to promote its parent company, the 12th Man Foundation, through social media posts and appearances.

In short, athletes are being paid to advertise for an entity whose primary goal is to fund their school’s athletic department.

Many foundations are not set up as separate nonprofit entities but are legally under the umbrella of an athletic department. They share employees with the school, even operate from on-campus buildings and answer directly to school leaders.

Such a close connection risks violating Title IX law and/or exposing a university to accusations of employment—right now, a word that scares leaders within college sports circles. For decades now, the NCAA and SEC have considered a school’s foundation as a representative of the school itself, no matter its separation. Foundations raise money from a pool of donors and then funnel that cash to the athletic department. Sound familiar?

Arthur Bryant, a lawyer specializing in Title IX violations, believes schools are violating the federal statute that prohibits gender-based discrimination. Male athletes are receiving more NIL cash than female athletes, he contends.

“Most colleges and universities in America are violating Title IX right now. What’s happening with NIL is just adding to that, sometimes massively,” he says. “It is impossible to know in some circumstances exactly how much the school is involved, but from public appearances, the schools are regularly involved and in some cases, they have to be involved.”

Belzer believes the foundation system and any non-profit collective is a “bad” business model that is certain to spell disaster in the end. “They are using it to get a tax writeoffs to pay student-athletes,” he says. “Unless you are OK with money laundering, you can’t pay athletes $20-30,000 a year through a non-profit.”

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This is happening across our society as we continue to abolish rules and laws put in place to control just this type of behavior in the name of the better good. There has never been a time when a rule or restriction was removed and someone, or some group, did not use the new freedom for their own profit.
When you hear people harping on about personal freedoms, of any sort, they are really asking for a removal of a responsibility to behave in a manner that is fair. The terms progressive and liberal have been hijacked.
NIL was never about helping poor, young, inner-city kids put a little money in their pockets, it was always about getting a competitive advantage. Dabo had this tagged from the very beginning and has been right from the start. The transfer portal is the same type of sham sold under the guise benefitting the athletes.
I say all of this not to be political, but because I hate to see the ruination of my favorite sport, college football.

SI: SEC NIL ‘We’re All Money Laundering’

Re: SI: SEC NIL ‘We’re All Money Laundering’

Re: SI: SEC NIL ‘We’re All Money Laundering’

Re: SI: SEC NIL ‘We’re All Money Laundering’

Re: SI: SEC NIL ‘We’re All Money Laundering’

No you're right. I think it's done.***

Re: SI: SEC NIL ‘We’re All Money Laundering’

And it's why college football is dying and is turning off

Dying, if not already dead is the greatest sport ever,

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