New NIL Collective for MBB and WBB

[MU62]

How long does it take for the IRS to approve 501c3 status?
If you file Form 1023, the average IRS processing time is 3-6 months. Processing times of 9 or 12 months are not unheard of. The IRS closely scrutinizes these applications, as the applicants are typically large or complex organizations.

[The Equalizer]

How long does it take for the IRS to approve 501c3 status?
If you file Form 1023, the average IRS processing time is 3-6 months. Processing times of 9 or 12 months are not unheard of. The IRS closely scrutinizes these applications, as the applicants are typically large or complex organizations.

If you file 1023-EZ, the processing time is only 2-4 weeks.
https://www.boardeffect.com/blog/how-long-does-it-take-to-get-501c3-status-from-the-irs/#:~:text=The%20average%20processing%20time%20for,take%20up%20to%20a%20year.

"Also, nonprofits that choose to file Form 1023-EZ may put themselves at a disadvantage when it comes to fundraising. Major donors are often familiar with the difference between Form 1023 and Form 1023-EZ. Some donors are looking for assurance that the nonprofits they support have been thoroughly vetted by the IRS."

My guess is that the type of individual who would donate to an MU NIL fund isn't the type that will be looking for assurances that it has been thoroughly vetted by the IRS.

[MU62]

This group is calling themselves a Wisconsin 501(c)(3).  They probably have filed with Wisconsin as a non profit but that does not mean they are a 501(c)3).  As to the short EZ I doubt very much that has been approved if it was ever filed.  Lots of people who think they have this all figured out.  I hope they are right but it looks like a major stretch. 

[The Sultan]

Just because an organization files and was granted a 501(c)(3) exempt status, doesn't mean that they are beyond reproach afterwards.  If "Be the Difference" rakes in a bunch of money and distributes it to the players, BUT then only does a couple of events where the players actually show, the IRS could most certainly audit the organization and declare that it is in violation of their exempt status.  That its primary purpose is not charitable in nature, but to enrich its employees.  The IRS tends to look with scrutiny at emerging types of organizations to make sure they indeed charitable.  I would expect them to do so in the case of NIL collectives.

[MU82]

This has been my point all along. No professional team sport's league would allow the top players to enter as free agents let alone become free agents again after one season.

Actually, "free agency" after one year takes place in every professional league for every athlete who has a 1-year contract -- which is exactly what a National Letter of Intent is.

It is quite common for NFL, NBA, MLB and NHL teams to sign all but the top free agents to 1-year contracts ... after which the athletes become free agents again.

Edit:

Lenny, although my point stands about it being common for many pros to be on 1-year contracts, I somehow didn't see your reference to "top players." And no, most aren't on 1-year contracts, you're right about that.

Still, the NFL has many, many high-level players on 1-year contracts. And Michael Jordan and Dennis Rodman each played his last two seasons with the Bulls on 1-year contracts.

[PBRme]

Typically not the Top Players on one year deals

[lawdog77]

Actually, "free agency" after one year takes place in every professional league for every athlete who has a 1-year contract -- which is exactly what a National Letter of Intent is.

It is quite common for NFL, NBA, MLB and NHL teams to sign all but the top free agents to 1-year contracts ... after which the athletes become free agents again.

I think that's the point. EVERYONE being on a one year contract, with no salary cap, and being tampered with by other teams/agents/players is not a sustainable model.

[The Sultan]

I think that's the point. EVERYONE being on a one year contract, with no salary cap, and being tampered with by other teams/agents/players is not a sustainable model.

Everyone isn't on a one year contract.  Players can only transfer without sitting out a year once.

[lawdog77]

Everyone isn't on a one year contract.  Players can only transfer without sitting out a year once.

1. They can still transfer
2. Those that have already transferred can still apply for an arbitrary waiver (see Garcia, Dawson)

Everyone is on a one year contract (as MU82 indicated)

[The Sultan]

1. They can still transfer
2. Those that have already transferred can still apply for an arbitrary waiver (see Garcia, Dawson)

Everyone is on a one year contract (as MU82 indicated)

1. Sure they can still transfer, but sitting out a year makes them both less valuable for NIL reasons and less apt to wanting to do so.
2. Not terribly likely.

[MU82]

I think that's the point. EVERYONE being on a one year contract, with no salary cap, and being tampered with by other teams/agents/players is not a sustainable model.

You saying it's not sustainable repeatedly doesn't make it true, dog. Nor would it be true if I claimed it was sustainable (which I haven't; I've said I don't know). The only truth today is that we don't know if it's a sustainable model or not yet. We'll see!

[TAMU, Knower of Ball]

I think that's the point. EVERYONE being on a one year contract, with no salary cap, and being tampered with by other teams/agents/players is not a sustainable model.

I asked earlier but you may have missed it. Why do you think it is not a sustainable model?

[lawdog77]

You saying it's not sustainable repeatedly doesn't make it true, dog. Nor would it be true if I claimed it was sustainable (which I haven't; I've said I don't know). The only truth today is that we don't know if it's a sustainable model or not yet. We'll see!

If you could name me any successful professional sports league where everyone is on one year contracts, I'm all years.

[The Sultan]

If you could name me any successful professional sports league where everyone is on one year contracts, I'm all years.

I can't name one professional sports league where everyone is on one year contracts. 

[MU82]

If you could name me any successful professional sports league where everyone is on one year contracts, I'm all years.

I didn't at first see Lenny's reference to top players, and I have amended what I said to him.

The NFL is the only of the major leagues where lots of very good players are on 1-year contracts every year.

[lawdog77]

I didn't at first see Lenny's reference to top players, and I have amended what I said to him.

The NFL is the only of the major leagues where lots of very good players are on 1-year contracts every year.

It's not that simple. Players with 3 years or less experience are Restricted Free Agents.

[lawdog77]

I asked earlier but you may have missed it. Why do you think it is not a sustainable model?

Complete free agency year after year, with no cap on spending is going to widen the already large gap between the haves and the have nots. Donors are going to decrease the money they give to schools, and donate to a collective. Most schools dont have enough donor cash to support both. I think you'll see it in football even more. Attendance  in football is decreasing. I don't think you can have both one year free agents and pay to play.

[Dr. Blackheart]

I can't name one professional sports league where everyone is on one year contracts.

Boxing, horse racing, auto racing, golf, bowling, swimming, bull fighting, tennis. They get paid for performance, just like the NIL.

[muguru]

https://www.ncaa.org/news/2022/5/9/media-center-di-board-of-directors-issues-name-image-and-likeness-guidance-to-schools.aspx

[Uncle Rico]

https://www.ncaa.org/news/2022/5/9/media-center-di-board-of-directors-issues-name-image-and-likeness-guidance-to-schools.aspx

Rearranging deck chairs on the Titanic.  Just hastening the eventual split

[lawdog77]

Boxing, horse racing, auto racing, golf, bowling, swimming, bull fighting, tennis. They get paid for performance, just like the NIL.

All boxers dont have one year deals-its usually based on a number of fights,
Horses or jockeys? Nope
Auto racing, nope, many have longer deals

Man, talk about apples to oranges. you've just named individual sports

Bullfighting? The bulls are on one fight terms

[MU82]

It's not that simple. Players with 3 years or less experience are Restricted Free Agents.

Good point.

[TAMU, Knower of Ball]

Complete free agency year after year, with no cap on spending is going to widen the already large gap between the haves and the have nots. Donors are going to decrease the money they give to schools, and donate to a collective. Most schools dont have enough donor cash to support both. I think you'll see it in football even more. Attendance  in football is decreasing. I don't think you can have both one year free agents and pay to play.

I agree it will widen the gap though would argue that the gap can only widen so much farther. I think we're well beyond the point of diminishing returns in football and are at that point in basketball. Throwing more and more money at a program can only help so much.

Donors may decrease how much they donate to the school, though I'm skeptical that it will be significant, but to me that was happening no matter what once NIL passed. I don't think "free agency" has anything to do with it.

I'm not sure the attendance decrease has anything to do with NIL or "free agency". I'm also not sure it's relevant as revenues seem to be going back up above pre-pandemic levels after the COVID dip.

We'll see. I think college sports will endure and thrive even if we have pay to play and "free agency".

[rocky_warrior]

All boxers dont have one year deals-its usually based on a number of fights,
Horses or jockeys? Nope
Auto racing, nope, many have longer deals

Man, talk about apples to oranges. you've just named individual sports

Bullfighting? The bulls are on one fight terms

The USFL?   

(I meant that as a joke, but looking it up, it appears they're really just paid per game played, so no contract whatsoever)

[MU82]

NC sportswriter Andrew Carter, looking ahead to the discussion of NIL at the ACC annual spring meeting:

For years and years the NCAA fought the inevitability that college athletes would win the right, one way or another, to profit off of their name, image and likeness. Instead of facing this issue head-on and preparing for a new reality, a defeated and beleaguered NCAA last summer more or less opened the floodgates, threw up its collective hands and said: "OK. You win. College athletes can now profit off of their NIL."

Who could've predicted — except absolutely everyone — we would've so quickly devolved into what's essentially become a pay-for-play model. Sure, there is the impossible-to-enforce, half-hearted legislation, both at the state level and nationally via the NCAA, that says, in effect, NIL cannot be used as a recruiting inducement; that schools and their boosters can't use prospective NIL deals to woo recruits. That'd be a no-no, according to the rules.

Of course, it's happening, and happening all over. Many a school these days have formed so-called NIL collectives, through which those schools are making sure their athletes, especially in football and men's basketball, are being taken care of. Which is smart. It'd be a competitive disadvantage in this environment not to have an NIL collective. But the question now has become how to control any of this.

Sports Illustrated last week reported that the NCAA intends to put a stop to boosters who're using NIL as a cover to pay athletes a lot of money to play for a particular school. Meanwhile, a prominent agent representing dozens of college athletes told The Athletic in a story published earlier on Monday: "I think it's adorable that the NCAA is acting as if they're going to crack down on anything."

You have to tend to believe the agent(s) here. The NCAA — which, remember, is nothing but a collection of the schools it represents — had a long time to come up with a workable framework for all of this. It didn't. And this is the result, with schools and coaches and others who are losing power bemoaning a perceived problem that none of them wanted to confront in the first place.

https://www.charlotteobserver.com/sports/college/article261246027.html#storylink=cpy