Amateur athletic's last veil falls

[Troyfan]

Someone needs to do a Ted Talk on what is happening in college sports. For me at least, it is close to impossible to fully understand or follow without dedicating a non-reasonable amount of time and energy.

Many of the athletes don't understand, either.  

https://apnews.com/article/ncaa-settlement-7aab7a3f3ee0a045b1cf1ce69e029b45

Football and basketball are the drivers of the whole thing, obviously.  Everything else and all of women's sports is up for grabs.

I don't expect colleges like Michigan to cut back on men's hockey.  But what about Alaska-Anchorage, Alabama-Birmingham?  Or even BC, which has big football and basketball aspirations?  What about Quinnipiac?  Can they be big in hockey and basketball?  What about lacrosse at Duke or Maryland or, more uncertainly, Penn St.?

All the edges I see look like they're cutting in Cornell's favor with regard to men's hockey and maybe lacrosse.  Football and basketball should maintain their current level of lack of success.  Cornell is committed to women's sports and will find a way.

From our perspective, nothing is going to change as a direct result of all of this. Cornell and the Ivies are not opting into the settlement.

But athletics is a zero sum game, so the question is whether the new rules help or hurt our opponents.  
1. Who is opting into the settlement? The power 4 schools, so all of the big 10, ASU, and BC, automatically opt in. Then a smattering of other schools like Denver. I'm not aware of any ECAC schools opting in?
2. How does opting in affect their ability to compete against us for recruits/transfers? This is the big question. I mean, if a school can offer money to a recruit, that gives them an advantage over us.
3. The other effect of opting in is that schools can offer more scholarships but are also bound by roster limits. In hockey, they can now give 26 scholarships (up from 18) but cannot have more than 26 players on a roster (though current players in excess of 26 are grandfathered in). If more scholarships get offered, that hurts us, because again that's a competitive advantage other schools have against us. But the roster limits benefit us, because we will be able to carry more players than the schools limited to 26. (This year we have a huge 31-player roster.)

(2) and (3) are uncertain because they're very expensive. The vast majority oTf schools can't afford to revenue share or to give out many more scholarships (which would likely be spread across many sports and have to include an equal number of additional women's scholarships per Title IX). For those big 10 schools with tons of athletic revenue, how much will they devote to hockey?

I don't quite understand the quoted post's "All the edges I see look like they're cutting in Cornell's favor with regard to men's hockey and maybe lacrosse." Is the idea that these new rules create so much chaos at other schools, or perhaps fewer resources going towards hockey, that it on net hurts other hockey programs relative to Cornell?

Yes.  stereax got it right and you do, too.  

To take you Michigan example:  Jason Milroe (Alabama) was making $10 million.  $20.8 million is not nearly enough to run even a Wisconsin football program let alone a Michigan or Ohio State.  Unless I'm way off base, this settlement is going to force some really difficult decisions upon these schools.  

Which makes me think I probably am way off base.

[adamw]

I'm also curious about BU and Northeastern, they're relatively serious academic schools with no football team. It seems like it would be very hard for them to find anything substantial to devote to hockey. (Are these schools opting in?)

Northeastern opted in. I don't think BU has decided yet

[adamw]

To take you Michigan example:  Jason Milroe (Alabama) was making $10 million.  $20.8 million is not nearly enough to run even a Wisconsin football program let alone a Michigan or Ohio State.  Unless I'm way off base, this settlement is going to force some really difficult decisions upon these schools.  

Which makes me think I probably am way off base.

the only part you got wrong, is that those schools (and/or their boosters) will continue to pay players under the table. It will be even more invisible than before, because $20.8 million will be "above board." But no one expects all the revenue to actually get reported to this cockamamie clearinghouse.

[BearLover]

To take you Michigan example:  Jason Milroe (Alabama) was making $10 million.  $20.8 million is not nearly enough to run even a Wisconsin football program let alone a Michigan or Ohio State.  Unless I'm way off base, this settlement is going to force some really difficult decisions upon these schools.  

Which makes me think I probably am way off base.

the only part you got wrong, is that those schools (and/or their boosters) will continue to pay players under the table. It will be even more invisible than before, because $20.8 million will be "above board." But no one expects all the revenue to actually get reported to this cockamamie clearinghouse.

I could be wrong, but I thought the clearinghouse was supposed to vet NIL payments, not the revenue sharing. All $600+ NIL payments must now be reported to the clearinghouse, which must approve them as being for a "valid business purpose." That should force things more above board than before, even if donors will still be looking for ways to skirt this requirement.

[adamw]

To take you Michigan example:  Jason Milroe (Alabama) was making $10 million.  $20.8 million is not nearly enough to run even a Wisconsin football program let alone a Michigan or Ohio State.  Unless I'm way off base, this settlement is going to force some really difficult decisions upon these schools.  

Which makes me think I probably am way off base.

the only part you got wrong, is that those schools (and/or their boosters) will continue to pay players under the table. It will be even more invisible than before, because $20.8 million will be "above board." But no one expects all the revenue to actually get reported to this cockamamie clearinghouse.

I could be wrong, but I thought the clearinghouse was supposed to vet NIL payments, not the revenue sharing. All $600+ NIL payments must now be reported to the clearinghouse, which must approve them as being for a "valid business purpose." That should force things more above board than before, even if donors will still be looking for ways to skirt this requirement.

my understanding has been that the revenue share and NIL would be one and the same, since it would all come in house. could be wrong about that however.

either way, though, yeah, good luck on getting everyone (anyone?) to report the NIL payments. there's already been a few news articles about how ADs are calling the whole thing a joke, and no better than when things started.

[Troyfan]

Most of the people posting here are Cornell. A few Clarksons and RPI's.  That's a pretty smart bunch. (You're welcome.)

So, that there is such variety in the opinions expressed here on how this settlement will really work I'm sure is mirrored in the athletics offices of the effected universities. We can speculate all we want but even those whose business it is to know this stuff have different opinions.

But one thing is certain: donors will find a way to give money to athletes beyond what the settlement allows.  If you've ever had a leak in your roof, you know what I mean:  Water always wins.

[BearLover]

Does anybody here understand how NIL or revenue sharing gets taxed?

[abmarks]

Does anybody here understand how NIL or revenue sharing gets taxed?

its compensation.   why wouldnt it be taxed like any other ordinary income?

[David Harding]

Does anybody here understand how NIL or revenue sharing gets taxed?

its compensation.   why wouldnt it be taxed like any other ordinary income?

Depending on your biases, people tend to favor taxing various kinds of income differently.  Tips.  Overtime.  Capital gains.

[Swampy]

Does anybody here understand how NIL or revenue sharing gets taxed?

its compensation.   why wouldnt it be taxed like any other ordinary income?

Depending on your biases, people tend to favor taxing various kinds of income differently.  Tips.  Overtime.  Capital gains.

Not exactly "biases." Tips & Overtime because workers who are paid this way are thought to be lower paid, and therefore should not be taxed. OTOH, some people believe (and many economists claim) that "capital" (actually investment) is economically "productive"; therefore, they favor lower tax rates for gains from the sale of such "capital."

In other words, people have logical reasons for favoring certain tax policies regarding earnings. I'm not saying they're good reasons, but they're usually not arbitrary biases.

Now, what considerations would one consider to justify specific policies regarding NIL & revenue sharing? How about making tuition deductible because a college athlete must be enrolled as a "student" to be paid NIL & revenue sharing?

[Troyfan]

Does anybody here understand how NIL or revenue sharing gets taxed?

its compensation.   why wouldnt it be taxed like any other ordinary income?

Depending on your biases, people tend to favor taxing various kinds of income differently.  Tips.  Overtime.  Capital gains.

Not exactly "biases." Tips & Overtime because workers who are paid this way are thought to be lower paid, and therefore should not be taxed. OTOH, some people believe (and many economists claim) that "capital" (actually investment) is economically "productive"; therefore, they favor lower tax rates for gains from the sale of such "capital."

In other words, people have logical reasons for favoring certain tax policies regarding earnings. I'm not saying they're good reasons, but they're usually not arbitrary biases.

Now, what considerations would one consider to justify specific policies regarding NIL & revenue sharing? How about making tuition deductible because a college athlete must be enrolled as a "student" to be paid NIL & revenue sharing?

Some economists think labor, at least some labor, is productive too.  Yet people engage in it despite having to pay full fare on taxes.  (Some economists even feel a bit of moral squeamishness that capital should be taxed more less than labor.  Although PhD economists have usually received enough inoculatation to be immune to this humor.)

But I can definitely see tuition deductibility becoming a thing.  e.g., Cornell doesn't exempt its athletes from tuition.  If some were to get NIL,tuition could be a legitimate cost of doing business. Non-college expenses like travel, business meals,qualify.  Why not tuition?

But then, couldn't that be true for non-athletes?  Couldn't income from a summer job be offset by tuition paid for related course work?

Maybe Herman Cain was on to something.

[BearLover]

Here is an idea for an NIL-like arrangement that Cornell hockey could offer:

The coaching staff works with the ample Cornell Hockey alumni holding prestigious jobs in finance to arrange for summer internships for current hockey players. During recruiting, the coaching staff could tell the recruits: we can't offer you any money directly, but we can set you up with an internship that will get you valuable experience in your field and pay you $[30,000].

I know Schafer was working on something like this a few years ago. And I'm sure this type of thing already happens a lot informally.

Of course, the best recruits just want to play hockey and make the NHL. But I think this would be valuable to the B+ recruits we tend to attract, and the coaches can make clear that the internship would afford the players plenty of time to concentrate on hockey. It should also be legal under the rules because the payout is associated with a legitimate job.

[scoop85]

Here is an idea for an NIL-like arrangement that Cornell hockey could offer:

The coaching staff works with the ample Cornell Hockey alumni holding prestigious jobs in finance to arrange for summer internships for current hockey players. During recruiting, the coaching staff could tell the recruits: we can't offer you any money directly, but we can set you up with an internship that will get you valuable experience in your field and pay you $[30,000].

I know Schafer was working on something like this a few years ago. And I'm sure this type of thing already happens a lot informally.

Of course, the best recruits just want to play hockey and make the NHL. But I think this would be valuable to the B+ recruits we tend to attract, and the coaches can make clear that the internship would afford the players plenty of time to concentrate on hockey. It should also be legal under the rules because the payout is associated with a legitimate job.

I believe the Penn basketball program is doing something along these lines.

[stereax]

Here is an idea for an NIL-like arrangement that Cornell hockey could offer:

The coaching staff works with the ample Cornell Hockey alumni holding prestigious jobs in finance to arrange for summer internships for current hockey players. During recruiting, the coaching staff could tell the recruits: we can't offer you any money directly, but we can set you up with an internship that will get you valuable experience in your field and pay you $[30,000].

I know Schafer was working on something like this a few years ago. And I'm sure this type of thing already happens a lot informally.

Of course, the best recruits just want to play hockey and make the NHL. But I think this would be valuable to the B+ recruits we tend to attract, and the coaches can make clear that the internship would afford the players plenty of time to concentrate on hockey. It should also be legal under the rules because the payout is associated with a legitimate job.

The one thing I'll mention is that even legal internships (as in, law-focused internships, where you need to have specific legal training and shit) aren't even paying that much, unless you're in a BigLaw position where I think the rate is like, $4000 a week over 10 weeks? But as someone who isn't doing that... I don't know if I can even find a paid internship for this summer, lmao.

So yeah - being paid to intern at some finance place is (probably, I'm not in the business of giving legal advice on eLynah) Technically Legal. But could run into issues with "why is X hockey player making Y amount of money to intern here while Z non-hockey player isn't making a dime" if you hit auditing or whatever the hell.

[BearLover]

Here is an idea for an NIL-like arrangement that Cornell hockey could offer:

The coaching staff works with the ample Cornell Hockey alumni holding prestigious jobs in finance to arrange for summer internships for current hockey players. During recruiting, the coaching staff could tell the recruits: we can't offer you any money directly, but we can set you up with an internship that will get you valuable experience in your field and pay you $[30,000].

I know Schafer was working on something like this a few years ago. And I'm sure this type of thing already happens a lot informally.

Of course, the best recruits just want to play hockey and make the NHL. But I think this would be valuable to the B+ recruits we tend to attract, and the coaches can make clear that the internship would afford the players plenty of time to concentrate on hockey. It should also be legal under the rules because the payout is associated with a legitimate job.

The one thing I'll mention is that even legal internships (as in, law-focused internships, where you need to have specific legal training and shit) aren't even paying that much, unless you're in a BigLaw position where I think the rate is like, $4000 a week over 10 weeks? But as someone who isn't doing that... I don't know if I can even find a paid internship for this summer, lmao.

So yeah - being paid to intern at some finance place is (probably, I'm not in the business of giving legal advice on eLynah) Technically Legal. But could run into issues with "why is X hockey player making Y amount of money to intern here while Z non-hockey player isn't making a dime" if you hit auditing or whatever the hell.

$150,000 salary prorated over 2.5 months is $31,250. Not sure what these financie internships typically pay though. Might be tough to iron out some of the wrinkles as you say.

In any case, the point still stands: we should be able market to recruits that they have a great chance of being set up with a lucrative internship and job after their hockey career.

I'm curious how Penn basketball does it.