I spoke to Penn State board trustee, Jay Paterno about the function of NILs and where it’s headed. It’s an eye opener for sure.
“It’s completely regulated. What deals are going on. There is no oversight,” Paterno explained. “There is nobody running the ship. No authority whatsoever. You have states all over the country passing their own laws and rules. It’s really chaotic right now.”
Then he continued to lay out the landscape.
“You have two tracks of NIL. Legitimate NIL where you have State Farm and JuJu Watkins a women’s basketball player at USC and they are going to put her in a commercial. And that’s the return of our investment for you playing a game that you star at. That’s what everyone likes to term ‘legit NIL’,” Paterno added. “The other track is collective, what everybody calls synthetic NIL and that’s essentially ‘pay to play’. It’s come to Penn State or Ohio State and this collective will pay you X amount of dollars. To Tweet or do something.”
Paterno wrote a book entitled “Blitzed” and he explains the tie-in.
“In the book I wrote. There is a fictional football coach. It’s non-fiction, fiction. It’s real but I have to write it as fiction so nobody blows up my house or my car. The head coach says to the people running the collective ‘Let me get this straight. You are going to play our players to promote your collective. To raise money to pay them to promote the collective. To raise money to pay for the collective,” then the coach responds with, ‘sounds like money laundering to me.’”
Collectives sound tricky.
“I was a part of the group that had the first collective at Penn State. We were paying players to go and work with charities like food banks. They couldn’t afford to have these players there,” Paterno stated. “That was a use of their name and their likeness to help raise awareness.”
This may explain why Universities are trying to act as a middleman.
“The reality is every school is in the sports/entertainment business. The Big-Ten television contract last year was for 1.1 billion dollars. This isn’t some nice extracurricular activity anymore. You have to own that,” Paterno emphasized. “With this settlement case there will be some things done in-house with the NILs. They will be able to negotiate or set up deals for some of their student athletes with some oversight and some transparency with some understanding of what fair market value is. Some kids can still make deals on the outside so it’s not solving everything.”
Paterno is excited about Penn State hockey and its future. He was at the regional win that sent the team to their first Frozen Four. And that night, Mike McMahon reported that there were more than 100 hockey players in the transfer portal.
“I don’t like the current structure of the transfer portal. Not because I don’t think kids should be able to transfer. Right now it’s all one sided, he explained. “If the, player wants to go. They go and there is no recognition of the school that recruited you. They give you a year or two of instruction, facilities, academic support, nutrition. They’ve invested a lot of time and money in you and they can just walk away. It doesn’t happen in the NHL or NFL because of the CBAs. What you need is antitrust or court protection from the federal government for college athletics.
“What you will need is collective bargaining to settle this down. Right now it’s all one-sided for the athletes. There should be some contractual obligations. It’s a two-way street.”
He said Guy Gadowski was on the phone with the transfer portal all day as Penn State gets ready to play in the Frozen Four. It’s a bit weird if you ask me.
Jay had more than this to say and I’ll post more when the settlement becomes finalized.
