VEGAS NIL DEAL GONE AWRY IS JUST THE TIP OF THE ICEBERG
with Kalle Kizzier
Last week, the world of college football was stunned by the abrupt departure of Matthew Sluka, UNLV’s starting quarterback, who announced he would redshirt the rest of the season and enter the transfer portal due to an NIL dispute despite leading the Rebels to a 3-0 start. While NIL has fundamentally changed college athletics, an athlete opting out mid-season is a first. With the facts of the situation unclear, opinions flooded social media, some accusing Sluka of quitting on his team to chase the money that their strong start put on the table, others blaming the school for not upholding their end of an agreement. Sluka’s representatives claim there was a verbal agreement with an assistant coach on a $100,000 NIL deal to transfer from Holy Cross that was not honored. Meanwhile, UNLV’s Athletic Department and their NIL Collective, Friends of UNILV, stated no formal or finalized NIL offers were made to Sluka except for a community engagement event worth $3,000. After hearing of the situation, a local casino offered 100k to keep Sluka in Vegas, but the school turned it down, stating they are moving forward without him. Regardless of the ever-expanding blame game, it is a messy situation that came out of nowhere. Despite the drama, UNLV won 59-14 against Fresno State this past Saturday, moving to 4-0 and keeping their playoff hopes alive.
This situation has led us into uncharted territory for the billion-dollar-plus industry of college football, where athletes are now opting out mid-season due to not being paid. (Bear Alexander, DT at USC, also announced he is opting out of the season and redshirting hours later). Industry leaders, Athletic Directors, and others note the beginning of a potential serious trend. Last week, NCAA President Charlie Baker called for Congressional action to establish national guidelines for NIL agreements, calling the current system “dysfunctional.” As the industry hopefully focuses on long-term predictability and clarity, here are three steps to enhance that process:
1. Eliminate the “student-athlete” presumption. College football more closely resembles “professional sport” than ever before. The reality is Division I football recruits are now doing whatever they can to secure the most lucrative NIL deals. Many of the Athletic Directors that I have personally spoken with fear that this is now more important than the recruiting process itself. As former Ohio State quarterback Cardale Jones once infamously said, “We came here to play FOOTBALL, we ain’t come to play SCHOOL”. The U.S. Court of Appeals has left open the possibility that college athletes should be considered employees in Johnson vs. NCAA, which opens the potential door that athletes are even owed protections under the Fair Labor Standards Act. While federal circuits potentially disagree, look to the Supreme Court to become involved in the near future. At the same time, NIL payments are at an all-time high. According to On3 (a leader in the NIL space), the top 20 college players are making at least $1 million each, with even the 100th player making $523,000 (Colorado quarterback Shedeur Sanders reportedly making $4.7 million in NIL payments). The meaningful regulation and governance can move forward with more realistic results as the façade of amateurism is removed.
2. Require written contracts directly with the athletic programs. Agreements need to be verifiable and entered into with the understanding/approval/involvement of the respective athletic programs. While every major athletic program has an “NIL collective” supporting its efforts, the accountability should be measurable and direct. Many of the collectives pay the athletes directly, but it is clearly not standardized. In Sluka’s case, an employee of the school was alleged to have made a verbal agreement that the NIL Collective could secure $100,000 for his services. But the facts are cloudy and effectively unenforceable. A direct contractual requirement could bring some measure of stability to the chaos of the transfer portal, especially if the athlete agrees to other stability-oriented stipulations (such as staying in the program for a designated length of time, etc.). Most Athletic Directors that I have spoken with agree that the transfer portal combined with the NIL “Wild West space” is the most difficult issue they deal with on a regular basis.
3. Allow athletic departments to assume additional responsibility. The lack of standardization across all divisions, schools, and programs causes significant problems with recruiting, competitiveness, and “leveling the playing field.” The $2.8 billion House vs. NCAA antitrust settlement may, in fact, provide some long-term clarity. Ninth District Judge Claudia Wilken is reviewing the details of the groundbreaking settlement. While specific terms have not been finalized, schools may be given the option of funding up to 22 percent of their annual revenue (an average of about $23 million per school) to be set aside annually for the next 10 years to effectively “pay their players.” Once the final settlement takes effect, athletic departments will have more leverage than ever, whether NIL Collectives will be part of the solution or not. The revenue-sharing agreements should allow Athletic Directors to bring clear leadership on the university end and also to create a more structurally sound landscape for college athletics.
How and when will all this occur? Whether a new form of governance will be on the table, entirely separate from the NCAA, is possible. In fact, a professional-type league with a Commissioner, and all the regulations that come with it, may be just around the corner. No matter what, with the size of the business that college football has become, it is only a matter of time before the economics require an entirely new business model. Matthew Sluka’s case is just the tip of the iceberg for the changes that are coming to the tumultuous world of college football.
