The Wild West of NIL: Contracts, Collectives & the New College Sports Economy with Nik Erramilli

Welcome to the Sports & Torts Podcast. Your go-to podcast for entertaining conversations on sports, law and business. This podcast is powered by the J-Stein law firm, a personal injury law firm in Atlanta, Georgia. And now, here is your host, Joshua Stein. What's up everybody, welcome back to the Sports & Torts Podcast. I hope you are all doing well out there. As you all know, we have talked and talked and talked about the new world of College Football and NIL deals and transfer port, and we keep saying, wouldn't it be great to do an entire episode on the topics? Well today, we finally are. My guest today is Nick Aramilli, the founder of the Aramilli Law Group in Atlanta, Georgia, also with offices in California. Nick works right in the middle of the NIL world, representing student athletes, ages of the athletes, and companies operating in the space dealing with the collectives and the schools. Well this is happening under the backdrop of the recent NCAA House settlement, a new $20.5 million revenue sharing cap and a college sports landscape that looks more like professional free agency every single day. Nick, my man, thanks for being here. I'm really looking forward to this one. Appreciate you, glad to be here. Thanks for inviting me. Yeah, man, how you been doing, buddy? Been good. I just got back from the tropics. You're in Honduras at the North American Law Summit, right? The tropics of Veroton. Yeah, beautiful island. Brought you back some cigars. I appreciate that. Yeah, of course. Cheers. We're doing it right. That's it. One down there and had a beautiful time speaking about, speaking about this topic, shout out to my panelists down there, Alan Fertel, Greg Kertner, Shannon Ligan. Awesome. I know being the tropics must be awesome, but is getting me better than 1600 Parkwood Circle here at my office. I'm a cool one, man. Right next to the battery. Yeah. So it's funny because our friend and we have a friend, Common Alvar, of course, he's been on this podcast and he'd not be happy with the branding I've done because people think that I'm like a sports lawyer. They see sports and torts like, oh, you must be into sports law. You my friend actually are that person. Yeah, hard in NIL, going hard in the NIL space. Athletes representing agents who represent athletes and the entities that are adjacent to collectives and schools. Super fascinating. So talk about your background. I know we're both UJ grads, but how did you get into this sort of legal work? It's so unique. Yeah. Went to Georgia, graduated from there, went to Emory and actually started as an in-house council. Did a lot of business litigation kind of cut my teeth in the business dispute world and then started my firm as a business litigator and did that for a long time and started representing some folks who were adjacent to the sports industry. When they started to pivot in the NIL, they came to me. They said there's this new field. We want to get into it. We operate with athletes. We operate with fans. We need to find a way to connect them. That's how I got into that. I love it, man. You get opportunities to recline it. You say, I can do this. I'm good at this. I'm interested in this. Let's go. You get into a really what's in a new area of business of commerce and of the law. We throw NIL out because you not know what it's doing. Most people do, but people don't listen. Just give the definition before we get into the weeds. Make it simple for people what NIL is. NIL is short form for name, image, likeness. It basically means that amateur athletes can now get paid for their marketing rights, for themselves, for appearing in commercials, for showing up in ads. That's what NIL is. I remember back in the day, like Edo Bannon, that first lawsuit with the NCAA. To me, that's when it first started tipping the scales, where the NCAA was forced to reckon with this concept that we have these athletes and surely get scholarship, meal, money, and books, but how should they be properly compensated for everything they do with the university and their name, image, and likeness? Is that right? Is that when it first started? Bannon was a seminal case in Austin. Was the other case. Where the Supreme Court kind of took it up, Kavanaugh wrote a dissent where he said, "Look, we have serious questions on the Supreme Court about whether the NCAA is treating these individuals appropriately." That all in case a lot of people think they messed it up by saying, "Okay, about $6,000 is the value of a student's academic merits." School started to give students some stipends for their academic merits, but it was all out of whack because nobody knew what that meant. Nobody knew what that meant. Yeah, O'Bannon in Austin really kind of opened the door for athletes to say, "We're way more than just students." Which is true, right? I mean, as they are, they generate so much revenue for these universities. And so, look, I mean, I like the fact they're getting compensated now, but we got to be honest. It's a wild, wild west. I mean, no one knows what the hell's going on. There's no real guardrails, at least that I can see. And it's going to be fascinating. See how it all develops. You have a front row seat to all of this. It's crazy. In a lot of ways, it's a very unique time to walk into a space where it's like wide open. You're walking into an industry where there's not necessarily established key players. There's not necessarily established key rules for a litigator like yourself and me. I think it's really exciting to be in that kind of space because you really get to do real legal work. You get to try and think about, where is the law going? Yeah, you get to really shape the direction this all goes. Exactly. You can be one of the shortlist of people that can really take this in certain direction. You go to these summits down in Honduras, where you're at and think tank with other people. You're the man. I love it. Appreciate it. You know, this house settlement, which just recently came out, it creates this, this basically salary cap for what the universities can work with. Similar to NFL franchise or Atlanta Braves, they got this amount of money to go spend on players. Explain to people what this is, how it came to be in the key components. Yeah, it's hilarious because we deal with clients all the time that say it's not about the money. It's about the principle of something. Whoever says not about the money means it's all about the money to them. It's always about the point. It's just be honest. It's never about the principle. This guy, House, who brought this case, literally it was about the principle for him because he's a swimmer who says, "I'm going to start the class action lawsuit in the Northern District of California. And I'm going to take the NCAA and the Power Five to court to get back pay for all these years that different people didn't get paid for their respective sports." And the reason why it's about principle for this guy is because swimming is so far down the list of sports that are going to take a large share of this money that he made for everybody. So for him, he's barely getting anything, but he's like the most famous name in college sports. He's the most famous name forever too, right? And so this case gets litigated and then there's a settlement, right? There's not a trial that takes place where judges are ruling. The NCAA realizes that, "Hey, we've got to deal with this issue." And so they put together a framework to resolve the case. Is that accurate? 100%. Yeah. I mean, what's amazing. I tell people this all the time when I go meet them. Like I was just in Vegas for Somer League, NBA Somer League last summer. In all these agents I'm talking to them, like do you realize this is the first time that a multi-billion dollar industry is fully regulated by a single settlement agreement? And it just, when you think about it that way, it's kind of ridiculous. It's kind of ridiculous. That's nuts. Yeah. And how they came up with it. So 20.5 million dollars is what each university has to spend, basically on an IELDLs for players. Is that right? Yeah. So that to me sounds like a very round number that was a part of a negotiation. I understand that. That's actually a formula that they use to arrive at that figure. Talk about that. Yeah. Yeah. There's a lot of expert evidence that was brought before the judge in this class action. And she looked at all of it and she said, "Okay. The metric for trying to understand how much money we should allocate to this salary pool is based on revenue shares, bowl game shares, NCAA rev shares, media shares for bowl games, away games, royalties." And they picked these seven categories, six or seven categories. And they said, "Of the Power Five Schools plus Notre Dame." Because you got to throw Notre Dame in there. The one who gets the free pass into everything. Of those five schools, this is the aggregate of all of those categories. And then they took 22% of that, which that was based on basically experts saying, "This is the proper share." And is it part of it is like this is an amount that the university can afford. Is that come down to a little bit of a two? It's like we had to come up with a number that was based on these metrics, but also we have to have the ability to actually pay it. Is that part of it too? Yeah. Yeah. I mean, it's the top end. It's the top end for the biggest schools. And they took the average of what all these schools were making out of all those categories. And then they said, "22% of that, this is the number." So you can get up to that number. So I'm picking on schools here, but like, let's say UGA, both years might alma mater, plenty of cash, plenty of donations, plenty of endowments versus some very small school and Louisiana, Mississippi. Like how is it that the number is the same for both? And that, how can they both come back? How can someone from Mississippi, the small school, compete with Georgia? They can't. So it's going to have a full stop. Yeah. It creates just, I mean, what's going to happen with the creation of competition? What's going to be great, it's already happening because the market is being driven now by economic models versus just schools recruiting based on their prestige and their name, there's this huge new component coming into it. So the field is already becoming more competitive. If you're a regular D1 school, you can now start competing in a way you could never do before. If you're just, if you're D2 or your Juco, you still can't compete on that level because you're never even going to get close to get a player and pay him enough. But as you get into more extended contracts in this space, you're going to have buyouts of those contracts. For example, if a player comes in and says, "I want to go to Juco, I want to go to a D2 school," and then between freshmen and sophomore year, they grow, right? They get in the weight room. They start working. Now they're on all of these D1 schools radars, but they're in a two or three year lockup. Those contracts are going to be written soon. That's what me and my friends always talk about. It's like, okay, if I'm a five star quarterback and I'm going to give you Georgia and I'm going to sign a contract with an IL deal with Canes. There you go. And raising Canes is going to pay me making up numbers of a million dollars a year for four years. I'm going to be paid with the market rate for quarterbacks, but here I'm saying. And then after one year, I'm like, "Screw this. I'm throwing the depth shark. I'm leaving. I'm going to go get $2 million from Zaxbys at yours at Tennessee." What happens to those contracts? When does the money get paid out? Are they going to be getting sued and paying back for things that they violated? Where's it going? Everything is short term right now. And the reason is because nobody really knows how the full scale of regulation is going to come out. And everything right now is based on a few appearances, a few deals, a few months, maybe a year for the school. But yeah, I mean, for the market to normalize, you're going to need longer terms so that players aren't just jumping between competing brands and competing schools. And that case is coming, right? It hasn't been publicly litigated yet. There have been demand letters sent, but that case is coming and I want to litigate that case. Interesting and you and I have discussed this before, we're going to pick on George again. But if you're George and you get this five-star quarterback and you give him this an IL deal and then he leaves and then you sue him, what does that do to future recruits? Right? I mean, we both know. We both know. Like you said, George is like kind of stuck to rocking a heart place because they want to enforce their contract. They can't let this happen, but do they really want to ruin their reputation with prior recruits? I don't know how you square all that together. It'll probably be a, it'll be an interesting combination of two things. One will be, it'll probably be a school that you and I view as not as relevant in the sports landscape that is required by necessity because they have over leveraged themselves to a certain player and they will say, we need that money back if you're not coming back. And they will buy necessity, take that case forward and that case law, that law will kind of guide people. That's a great answer. So what's going to happen is it's going to be a smaller school on a smaller level scale, on a smaller sport with an unknown athlete. We might even hear this is going on and they're the ones are going to create the case law. The precedent, just like in one of our, you know, one of our trucking cases or dog by cases like a case goes to the Supreme Court, Supreme Court issues are ruling and that becomes a law of the land. So what you're saying makes total sense to me, it's going to be some swimmer and some small school in Montana that, that, that, that, that's actually, yes, I believe montains like screw this, we can't afford that. Yeah. They file the suit. It gets litigated and probably secretly Georgia and Tennessee are all written like help for some decision on this is. And that's the other thing as a, on a PR side, right? Like Georgia, if they lose $100,000, $200,000, they don't have the ability on the PR front to say we need to go and sue this kid over that school like whatever, take your example in Montana might, might be able to catch their whole case and the fact that we're going to be broke if we don't go get this choice. Yeah, we don't have a choice. So this salary cap, I mean, can we call it just that? I mean, it is a salary cap of what the university can spend as they choose on student athletes. Yeah, I mean, I think informally salary cap is fine. Yeah. And so then it's incumbent on university, whether it is, you know, Kirby Smartmaking Decisions or the school president, some of these places have hired GM specifically to run it to then decide amongst themselves like having an allocate, is that, was that what's happening? Yeah, I mean, it's a, it's a land grab within the schools for sure. So the athletic directors are having to make these decisions and, or they have associate athletic directors or business operations people within their, within their front office. So to speak. Now we're calling it the front office of college sports, right? And they have to allocate these things in the guy, you know, the 800 pound gorilla is always the football program. Those decisions are having to be made. I'm picturing Moneyball with Brad Pitt and, you know, he's playing Billy Bean and they got their chalkboard and like, we can't pay this guy this much money because it lead doesn't leave us enough for this guy. Yeah. And that's what's happening now, right? So it was not only within players, but also within the sport. So football, you know, we can't use 90% of this might in football because then basketball gets very little and baseball gets very little and the below the line sports get very little in the Olympics sports. So how are they navigating this? I mean, like who, who is coming up with, or is it every just school individual trying to decide like how we put these different buckets together? Yeah, there, there's huge opportunities, I think, for, and there's really smart people who are analyzing this, like I work closely with ex Georgia running back, Keith Marshall and he's constantly putting, he's going and talking to these people and putting out really smart stuff about this. But, you know, he and I were talking and it's like, there's a huge opportunity for a school like a, a seat in hall or a Xavier who doesn't even have a football program to say basketball is huge in the Northeast. We can actually get the best recruit in the country to come to seat in hall, to come to St. John's, you know. And so those decisions are being made here, right? But I also think it makes, it makes it really cool for other schools that want to focus on other sports. Yeah, they can say, okay, you win in football, but we're going to focus on basketball. You win in those two, we're going to go all in on baseball, we're going to go all in on a volleyball, something that, you know, a couple of schools in Nebraska, Purdue, Louisville, they can just say, we're going to own volleyball and all that comes with it. So, that's the decision every university can make. So, use a volleyball example, my daughter plays. What if a school is like, we're going all in on that. What are all the opportunities available? Well, we're in a, we're in a attention seeking, eyeballs, social media, content, world. That's what's running. The more, the more attention you can get from somebody, the more value you drive out of that, right? But most business models in the, in the athletic space and the live entertainment space are going after. So, if you have 365 D1 schools and you have 17 allocated, 17 allocations for volleyball, that is the actual number in the settlement. So, you have up to 17 people in volleyball who can have, who can get paid under the cap. 17 times 365, I can't do the math that quickly. But you have six to seven, six to seven million amateur volleyball players who are now going to be focused on the schools who say, we're going to win volleyball. And so, when you talk about attention, when you talk about eyeballs, there is a business model to apply there. I mean, I don't think, I think it's pretty easy to say, you know, when you have that many people focused on one sport, they're going to follow, they're going to watch. So, yeah. So, your example, we use my daughter. She's like, I want to be a college volleyball player. I want to go to all these 10 schools. I'm going to follow them on Instagram, I'm going to be on their YouTube channel. I'm going to subscribe to Big Ten Network to watch them, you know, at night. Yeah. And so, I think it's brilliant that these these schools can just focus on that one component and then just kind of build on top of it. And like you said, follow the eyeballs, get more followers, get more ad revenue. Yeah. It's really endless. And then you have, this is just, you know, the first iteration of all this, right? There's going to be a second iteration where they build out like you're saying. If they just own a sport and then they've capitalized it enough to take it beyond just amateur athletics and the professional athletics, there is a pipeline like women's golf is a perfect example of amateur golfers who want to go to the LPGA. And now there's money that never existed in the LPGA that can now exist on the amateur level. It just takes a mind who's going to say, I'm going to connect those two things and create a pipeline that's going to be evergreen. So we're kind of going off topic a little bit, but what you said reminds me of the Carson Beck example that every George of windows, which is he was starting to quarterback for two years, projected number one, you know, top, top pick in the first round or somewhere in the first round or talk up around, gets hurt. And then he has a decision, mate. Do I go to the draft, get chosen, maybe a third, fourth, fifth round? Who knows what that contract looks like? Or do I go to university, university, Miami on NIL deal? We heard four million dollars. Who knows if it's true or not? He's making more to go play one more year of college and he would signing it multi year professional contract. Yeah. I mean, is that right? I mean, that's what we all heard and say. Is that right? If you, yeah, I mean, unless you're a, you're a number one first round top 10 lottery pick. Yeah, I mean, if you're going to be the top paid NIL athlete in college sports or one of the top, you're going to make more than you would unless you're going to go be a lottery pick and your signing bonus is going to be in excess of that, right? There's perspective. You know, there's not more than five, six athletes in all of college sports whose valuations are high enough to forego that kind of professional money, right? And you have a shelf life, right? It's not like you walk in as a freshman and now you're commanding four million dollars. That may be your final year once you've proven yourself all American or you got a great last name like Manning, you know, one or the other. But most people are going to take the fact that, okay, I only have three or four years of this. I'm still going to go pro because that can be two, three, four, five contracts. So I can see why you're good at this because I'm visiting you, talking to a family and they're asking probably the same questions I'm asking you and you, and you give them that perspective to make that decision because God, it's overwhelming for these kids that they're 17, 18 years old. This is life changing money to a lot of them. They have these dreams of playing for you for Georgia or these dreams of playing for Texas. And now it's like, what do I take more money to go play for? I mean, was it the Travis Hunter that took all that money to go play for grambling, uh, stats and, uh, Jackson State, Jackson State and then Colorado versus Florida State and Georgia. It's like these decisions are being made and they don't know what to do. So at least the conversations you're having everyday with these kids and their families. Yeah. I mean, we're having it mostly with the agents on that level. If the kid is that level, he's already got an agent or she's already got an agent. And so they've gotten a fair amount of education, the smart agents, those people who are able to recruit a Travis Hunter or archmaning, you know, they're very good at what they do as well. I'm going to speak out of the other side of my mouth now and tell you a story about there's a big school in the southeast who is chasing down a recruit and they need to raise $750,000 for this recruit. Okay. They want him only to sit for two years. So on one hand, yeah, it's very select few, but as this market gets bigger and bigger, you're going to have people who are getting paid three quarters of a million to sit for two years to provide the depth that we all talk about is being lost or so that you don't go somewhere else. Somewhere else. Okay. I had to miss that part of it. So I'm paying you not to go to so to see you know, we know you're going to start next year at this school and we can't have that. We can't be. So you said raise that kind of money. Is that outside of the 20.5? They have allocated. There's a constant struggle right now within athletic departments all over the country where they're having to make the decisions you talked about. The money ball decisions. We can't pay the first basement this. I can only pay them this. So in football specifically, yeah, you can't pay the wide receiver that full amount. So you have to rely on your outside associated entities who are boosters, collectives, corporate entities to raise some amount of that, right? So you might say, I have 500 of it. I need guarantees on the remaining 250. So that's happening. All right. I use word collectives like I know what it means. Yeah. Tell me what it means. It means the group of people outside of the university who handle almost all of the fundraising that comes in to that university. Okay, it's made up of boosters, corporate entities. And they're, they're a collective of people outside of the, outside of the university who are handling the fundraising. Okay. So we go. And they're gatekeepers. We got to collect, we need 750 for this player. Here's why we need it. And then the collective, they had their own decision makers that decide, yes, we're going to pay this for this or is that what goes? They got to be making decisions too. This is really, this is really like the belly of the beast. In an ideal world, yes, what you're saying is exactly what would happen. But what is happening right now? It's so new. It's not efficient. It's not that efficient yet. So you have collectives or third parties who are, first of all, doing the same thing everyone else is doing, just trying to get, establish their position in this space. Okay. They have to broker their own deals with powerful agents. Okay. They have their own incentives. They also have this insecurity because other than the big behemoth entities like Learfield who are actually licensed the Georgia G or the Alabama A, none of these outside NIL deals without their permission can use the logos. Okay. So these collectives are also saying we need to, we need to establish our territory here. So they're not perfectly incentivized and aligned with what the school wants. So what that leads to is, hey, I'd rather have a relationship with this agent. Let me, I'll, I'll commit an NIL deal to a player that the school doesn't necessarily want me to commit to. Okay. So you're not on the same, you're not on the same page as the school that you're trying to help or you commit to a different sport altogether. Every, every topic brings on more questions, which is why you part where you step in there. So this is why I kind of, this is why I struggle with it with a collective. Let's say like I'm a part of a collective, right? And my law firm wants to provide NIL money to sponsor, we brought Bauer's computers ago. And you know, for my money, I'm going to put it, I'm going to put it in the right Bauer's. I want him on a billboard that says, "Jay Stein law firm and some catchy phrase and you know, I'm getting something back in exchange for my payment to brought Bauer's." To me, that seems like the way it should go. But that's not necessarily what's happening, right? I mean, these players aren't necessarily providing services for an individual person like me that's paying up the money, is that right? The big, big gatekeeper is you got to have a roster spot at the school. Okay. So you got to make the team. So now you have the team that's going to, first got to decide, yeah, Brock can make our team. For him to then be relevant to you, a Georgia fan, to be on your Jay Stein law firm, billboard, right? So it's both parties have to be in lockstep that way. And so you're not going to put them on a billboard if he goes to your rival school. So Georgia has to still say, yeah, you got to spot on a roster, Brock. What about from year to year? So Brock's there first year. He's freshman of the year. We can tell his generational guy. And then Florida calls and says, "Hey, we sure would love to have Brock Bauer's our team next year. Here's $3 million. So you start the process all over again. And that's why the transfer portal is going crazy right now. But there are, there are measured rules, amendments to the NCAA bylaws that are coming in that I think are pretty smart to try that are trying to curtail some of these problems." Quote-unquote, probably. They got, I think they do need to figure it out. Like, I feel bad for these coaches. I feel bad for these coaches that every year they seemingly have to re-recruit these same players. It just doesn't seem right to me. But the same token, I appreciate the player's ability to go and get what they can get. And like I said, I'm a capitalist at heart. So like, I respect that part as well. But I feel like there's got to be some sort of mutual ground that doesn't make it so crazy every single year. I don't know. There will be. And that's what we're trying to create, right? Eventually we will have somebody come in and stop treating this brand new problem. This is really a, like you said, capitalism problem. Like a, these operations should be run like private equity models, hedge fund models. Somebody who is just, you know, wolf of Wall Street mindset, I don't care. I'm getting everybody in shape and we're making money out of this thing because this is a billion dollar enterprise if we leverage it correctly. We have legacy solutions to this right now. We have people who came up through the ranks just, hey, he paid his dues. So he's the, he makes the business decisions in the athletic department. It's like, no, that, that guy doesn't want to make these kind of calls, right? He don't want to trim the fat. Just we're going for, yeah. So it will happen. We will get that kind of alignment. But it's going to take some, some dollars behind it. Yeah. Yeah. I mean, it's, I think we all have to just come to grips with this kind of new dynamic that's going on in the, in the, in the sport. I'm focusing on cultural ball specifically. I mean, you and I both came up with an era where it's like, you kind of see the quarterback get recruited. You're excited. He's on the team. He's going to sit for two years. He's going to be like, starter when he's a junior, you know, like you know his name. Let's you graduate. He's on the, you know, the radio show with the locals, you know, sports talk radio. Yeah. He becomes like a legend within the school, right? 100%. And I guess that's still important to some kids. Gunner Stockton to me seems like that's important to him. Yeah. But that's not what we're seeing now. I mean, like we're seeing these, these, these players that aren't, I mean, it's, it's the, it's the exception when you get somebody who stays in the school for the full three or four years. Yeah. You know, it is, um, they're also, I think, they're still the outliers because those numbers get so big for the top end that, yeah, I mean, you can't blame them, right? You can't blame them for going and taking the bag. You just can't. But, um, you're going to start seeing longer contracts, longer lockups. Once the school and these third party entities can get their proverbial, you know, what together, you'll see longer contracts because now they can guarantee, hey, we can raise this kind of money for three straight years. I think that's the key, right? It's like you get the longer contract, they're enforced on both ends so that you're, you're locked in and that that creates some stability, right? Um, it's funny. Like go get the bag. You say we used to be like, oh my God, I can't believe that that kid left Georgia to go play at Texas. Like I can't believe you do it. And he said back and like, of course you can believe it. And, and you do the same thing if you were him. Like you're full of crap. If you're throwing shade of this 19 year old kid, it's going to go get $5 million or whatever it is going somewhere else. Like you do the same thing. You would do the exact same thing, especially because you have a limited window, right? Not, not many of them, even the ones who are getting the full bag are going to go pro and have a second contract, a third contract, right? I think they all want to, right? I think they all want to, but ultimately you have a five year window, six year window. If you, you know, get an extra and it's like, yeah, do it. Do it. But on the other side, they're going to come back with the longer term deals and they're going to say, you got to lock it up. You got to stay here for a certain amount of time. And if not, there's going to be some sort of buyout, which I think is going to be a really cool mechanism that comes into this market. So we all speculate as to what these contracts look like. I said we thought Carson Beck got $4 million. I don't know who the hell came up with that. Maybe you know the exact number. Never mind. Don't care. But how do those numbers get floated? And at what point in time will they start becoming reliable in the figures? We know that MLB, you know, the contract they give to my retirement is exactly what it is. We have a contract for the quarterback, you know what exactly what it is. But with this, no one seems to know. Yeah. It's, it's not adequately reported on yet. Okay. And part of that is because the, the framework on top of all these rules is run by the College Sports Commission and then a clearinghouse called NIL Go. NIL Go is in charge of looking at every single deal NIL deal worth more than $600. Okay. But they are sitting behind a curtain, an opaque curtain. We can't see into what those deals specifically are. So now there's some people who have insider information that publish it. It's still, it's still unverifiable. But what will happen is at the end of this year in June and July, the schools will have to report their payrolls, so to speak. Okay. And then system that's abbreviated as CAHPS. And this is the system where every school has to go and say, here are the NIL deals. Here are, here's our salary cap allocation. So next year, we have a year of data to see what did all these schools allocate really to all these programs, all these different things. So, so you have a little bit of, a little bit of, you know, clarity around that. The other piece you asked about is what are these deals actually look like? Right now it's wild because right now what schools are doing is, because they can't necessarily foresee how much money is coming in the door from the third parties, they'll say, hey, we'll guarantee, we'll give you this allocation. Let's say your deal is worth 500 K. Some of the money that is allocated to that deal is like appearances. And some of it is like brand sponsorships. If the student says, you know what, I don't want to be affiliated with that brand. Okay, I'm not doing that deal. That comes off of your cat. So your deal just went from 500. So it just went from 500 and his valuation just went down by whatever that deal was. He turned down. So we're advising people, turn that around. Don't make the school your exclusive licensing agent. Okay. Make the school show you at the beginning how that entire valuation is going to be fulfilled. Okay. Which is not happening because they're deducting against the valuation. So you're saying like project in two years what it's going to, somebody who got to appear it's for a company you're going to need to want to see names. I want to see contracts. Yeah. Right. And now the contracts also have to specifically spell out what are the appearances that this money is for? And that's what you have to submit to NIL go. Because I know you write a lot about trying to avoid any ambiguity in these contracts. They're full of vague and ambiguous terms. Yeah. I was about to say that. Now we have a player like who is actually following this guy around and like did you make that appearance? Did you go to that party? Like did you? Are people doing that? Nobody's doing that. Who is doing that? Yeah. So we're still just like, okay. They are checking it with some loose metric of like, okay, if you are going to get a million dollars like on excess money, right? This is all this is all excess money. You don't have to have this the cap within the school. We should have said this is not NIL money. That's literally just you're on the roster. You get a check under the cap, all the above the cap money, which, you know, Ohio State wants to go raise another 20 or 30 on top of their 20. So yes. I've been going about this the wrong way presenting it to you like that 20.5. That's there. We're talking about the money on top of that on top of that because to really because the valuations are such that to really fill out a roster like a like a number one playoff seed team in college football. You need you need more than that, right? There are numbers being floored out there before this season started. Some of the people I work with were saying we're being tasked with trying to find an extra 20 just for football on top of the cap. Well, we heard last year, Ohio State had a $50 million, you know, salary, not salary cap, but they had a $50 million roster. You know, and that very old might be true again. I don't know how those numbers going verifiable where they come from. I'm really interested in this in this concept that these numbers are going to be shared in the thing being out there, almost like a cop and buying a house or when a base player hits a free agent is like a shortstop at this age with this sort of metrics and this kind of production is worth this kind of deal. That's what's going to start happening. It's going to start happening. I don't think it's going to start happening on an individual player to player deal yet. Overall, the reporting is going to be again, first year probably, hey, we did this much for baseball as a whole. Oh, then I can get to the specific players. They're not yet. Okay. Eventually, I think that'll start becoming reported as well, right? As the industry kind of flushes itself out, but the rules right now don't say you have to break it down player to player to player, right? You just have to show your allocation right now in caps, which is still really valuable data. You know, like if you are a baseball player, you know, you're saying this school is really going in on baseball. You know, these are the schools that I want to follow. These are the schools that I want to be recruited by. Gives you a lot of direction. So I keep going back and forth. Like if I'm 19 years old, my son's 14, my daughter's 17. So like I'm thinking about this through their eyes. Like when they're 19 years old and they step on, you know, 18 step on college and they get a $1 million deal and it's out there for the whole world to see. That's a lot of pressure for a kid walking onto a campus and all this peers are like, this dude's getting paid a million bucks to play shortstop on the baseball team. Like we're going to be brought eyes on him and that brings different, put him in different spotlight. I don't know, man. I don't have the answers. I don't know if he's a, there's definitely a pressure, but you're also the coolest kid on campus. You are that guy or girl on campus. Like can you imagine? Yeah, there's pressure, but you also are like known as the million dollar kid. Like you walk into a bar downtown or to some party. It's like records crashed. Yeah. So and so is here. Like, I guess you suck and then like this guy sucks and but but your point is well made. I mean, you can you can own campus if you're an out as a guy. You're going to suck but as a as a million dollar kid. Yeah, it's better to suck without the million dollar. Yeah, sorry. It's it's better to suck with the million dollar. Yeah, here it is. So, you know, I think that what I'm hearing is that the highest rates of the world, the Georgia world held Texas tech is raising a ton of money right now. Like the schools that have those deep pockets with boosters and collectives and building raising IL money, they're going to be able to to buy, you know, the better players. And so do you see the competitive balance shifting to where the teams that have the most money and the ones that make the playoffs every year and compete for championships? Well, they also ran. It's just can't keep up. No, I think it's going to be an equalization more so first. It's already happening. I mean, you there's no easy game in the SEC. Kirby says that every week, you know, every every school is is dealing with that. I mean, SEC is always going to be the the the van guards in the space because football just matters more in the South, you know, but I think even the lesser known D one schools, they're especially in college. You can have one player who's just a game record who's like suddenly were just upsetting. Like last year, Vanderbilt just beat Taliban and they tear down the goal post, take it all the way down Broadway and throw it in the river. Like because they got pavya. Now he's on all these podcasts, all these platforms. And I mean, you know, it's about that. You just why about that? So if you're Vanderbilt and I don't know they paid for pavya, but they got the right guy and they're trying him with good guys, they spent some money on their football program, they're the right coach. That is made their brand as university so much better. And it was already great. Obviously, but now I was reading about their admission statistics and just applications. It's just through the roof because people now like Vanderbilt that much more because they have a good football program. So all these kids in New York and Boston, Chicago that used to want to go to Harvard or Columbia or Yale, like no, no, no, we're going to go to Vanderbilt and we're going to have this great university in Nashville, in Nashville and go play Alabama and go beat Alabama. So universities are being smart seeing that if they invest their money in the athletic program, it's going to pay huge dividends academically as well. Georgia's seeing it too. I mean, ever since, you know, the last five years with our success, you know this, like the amount of applications is through the roof, the admission criteria is through the roof. And it's out. And we got in what we got in. Dude, I went to Tuscaloosa last year and if I told you every single thing there is brand damn beautiful, you know why? Because in X-Aven, I mean, it's amazing how this athletic money and athletic success can drive an entire university. Drive a whole town. I mean, my wife is from Lubbock. You know, they, you go to their facilities, they're brand spanking new and I just went there last year and they're building more. You got them a homes money. You know, you got people investing in the infrastructure. They have a billionaire state representative who's really big in their NIL space and they just paid them a million dollars to their softball picture, then reupped and renewed her for another million this year. So then when you're representing these two athletes in the ages and you're like positioning yourself with the collectives or with the schools, I guess it's probably the conversation and it's like, hey look guys, while this might be expensive, it might be hard for you to pay like, think about the dividends it's going to pay down the road outside of just winning football games. We're definitely making those points, definitely. And it's working to it and it will work more as there's more proof of concept with it, like the Vanderbilt say you're talking about. And that's really good data to go into a table with. I'm going to steal that idea of you like, look at how many more people want to apply to your school after this. So we're just going to see more and more of it. Well, it's like you can apply it to what we do in personal under cases. Like if we know a jury is awarding this kind of money for this kind of injury, this kind of case, we use that to say, hey insurance company, this is evaluation. So you should pay. It's the same concept, right? I mean, you can take proof of something's going on in other place and then you do your advantage over here. And I don't think they can argue against you. I really don't think they can. Because they also are in the unfortunate position of being the bad guys this whole time. It's like, oh, this case finally punished the bad guys, you know, this house settlement finally punished the NCAA, the schools who were taking advantage of these student athletes. So everyone is willing is now there's if it's a no here, it's a yes over here, right? Because everybody it's easy to punish somebody who's been the bad guy this whole time. It's interesting to say who's wearing the white hat, who's wearing the black hat here. I think in the beginning of all this, the players that really put their neck out and went and took the bag to go somewhere else, they were the bad guys. And now that's kind of shifted. It's like no, no, no, no, no, no, like the NCAA, they've been very greedy for a very long time. Yeah. It's time that they, yeah, they now take their responsibility for what's going on and properly come and say these kids, um, these are a play. I mean, what is their position at the moment? Like what kind of power do they have? For a long time now they have been beholden to the SEC in big 10, right? And they don't have much power. They do control eligibility, right? That's their big stick is they get to write the bylaws, write the manual that controls eligibility. Right. But at the same time, because of the way the law is going, what's to say, it's like the PGA tour and live. You know, what's to say? The SEC is like, you know what? We're just going to do our own thing. And we're going to join with the big 10 and we're going to create this new thing. It's going to be funded by the top five companies in America. And we're just going to play football and all our schools are going to be over here too. We don't really need the NCAA. So there is a, there's a bit of like a cat and mouse game happening there too. So you make that argument on behalf of the big 10, the SEC. What is the NCAA response back to that? Like what, what is the care they can then give back? But no, no, guys, don't do that. T.B.D. man. We always say like with the NCAA, like they used to, you know, they used to give out sanctions with punishments for recruiting violations or giving people money and properly. Now they can't do that because that thing is, you know, nothing is illegal. Yeah. Some of them do. You know, I think they're, they're big thing is look, if you, if you just break off, you're going to kill, you're going to kill the rest of the market, right? And that's not entirely in these conferences, best interest either, right? They need the rest of the market to exist because like they need players, right? They need people to play football. They need people to play all these sports so they can recruit the best ones. If the market just dies around them, it's like, okay, at the end of the day, nobody is going to play a college sport and put their bodies and their minds through hell, like to be a varsity college sports athlete for no return, right? So they need the larger market to exist. They really do. Yeah. Do you get involved in any of the discussions of commentary alignment or conferences negotiating contract deals with CBS and ESPN and ABC and bowl games? That thing that you do? The media right stuff has popped up a little bit, you know, because like the big 10 is, is trying to value themselves based on what the, so this, this, how settlement is a 10 year settlement, you know, for this, how the salary cap is going to be allocated, all this stuff. They're trying to, they're thinking 10 years from now, the cap will go from 20 to 34 million, all right? And so everything is going to be renegotiated. Literally, this whole thing is going to be unwound and we're going to renegotiate the whole thing in 10 years. So those valuations are cropping up a little bit in terms of, we're using them to say, look at what your, your program is going to be valued at that point and it's going to be built off the effort of these students, using it in that sense, you know, to our advantages. And of course, the schools will turn around and be like, well, we can't overextend ourselves because then the deal won't be as good because they'll see that it's not a money making enterprise. So it's that cat and mouse. Yeah, that's a concept that we want. Yeah. So another kind of offshoot to all this and you maybe you can't speak as maybe you can't. It's these high school seniors that are juniors that are very good at their real sports, 10 years ago, they'd be going to Georgia, Georgia Tech, Clemson, whatever. Now because of the transfer portal and the way that schools are stacking the roster, now they're going to Juco or D2 being there for a year or two and then trying to transfer them a little bit older. Is that something that you deal with the families, talk about options and what makes the most sense because a lot of my daughter's friends are going through that process right now and trying to figure out like where they fit in the landscape. Yeah. So first of all, we always tell, and yeah, to answer your question, yes, we do talk to those families, talk to those agents. First of all, we always tell them, this is a year by year thing. Okay. What's happening right now? Even if you take a deal, it's got to be kept at a year for sure. The play to go elsewhere is a good one because you can improve your valuation in the short term and not take and not go and commit as a four year scholarship athlete. You don't call them scholarships anymore, but as a four year athlete at any school and you can build your valuation and enter the market at a different time. That's an explanation for why that's happening more. I think it's a wait and see thing. So I totally get it from the university perspective, Signal and Baseball. If I am trying to find a new pitcher or find five pitchers, I'd probably rather have a twenty one year old that's got two years pitching somewhere else in college. It's got a good track record that now is two years older grown. I know I'm going to get a little more than a kid that's 17 and there's a lot more guesswork. And I don't know this kid's going to be like in two years and maybe his arm blows out the first year. So I get it from the school's perspective and it makes a ton of sense. Well, the other piece is there's more money to go play at colleges so less people are going to the minors. So there's not as much matriculation. There's not as much just, I'm going to skip college, just put my name in the draft. You used to see that all the time. High schoolers just go to minor league, single league, double A. Yeah. And in like with COVID kind of building on that, it kept giving kids like extra years of eligibility. That's too for sure. And so now you have a 17 year old kid that's competing against a 23 year old grown man that's been a college for like six years. So is that going to like time itself out or do we now have a situation where people just have more potential eligibility? It is timing itself out now. So I think the last draft class and maybe this one will be the last one where you're just seeing like 23 year old being graduated into as quarterbacks and stuff like that because of those extra years of eligibility. So these are the last last few. Okay. I think that the eight year senior is coming to a conclusion. Because with COVID, what they were just all blankedly given that year back and then was there some other exclusions or exceptions or? You know, the COVID thing, they did get that year and then for the ones who applied for it, I think they tacked on an extra year. But like I said, it doesn't appear. It's not coming into my work too much because this is the, these are the last few who are graduating through that. What's interesting right now is I saw, I was reading recently that Juju Watkins, the USC basketball player, she just invested in a professional sports team and it got me thinking about how cool it would be if you were the first player to say, I will lock in a four year deal. And right now everybody's thinking, that's not to my advantage. I want to keep my valuation high. I want to keep this thing rolling as long as I can't keep doubling down, tripling down. But what if you leveraged four years of cash flows as a player and borrowed against it, raised capital against it? Because these are not, these are just roster, you know, if you're on the roster, you're getting the check, right? And then now, because schools can't guarantee personally NIL deals, the outside entities have to guarantee them. So if you can put that deal together and then leverage against it, I think as a student athlete, you're in like such, you're in rarefied air, like your 4x, 5xing that valuation over four years. And now you can invest in a professional sports team. So you're somebody they could talk to, what's, what's, what's my ideas? Like, hey, what could I do with this money to go invest in a professional sports team or some other opportunity that we have? Buy some land. Buy some land. You set your set, go on to like chapter two of your life. Like this is chapter one when you're 18 or 19. So like there's a, there's a, I think there is a real incentive for athletes to lock in for multiple years. Because that's how anything is capitalized in America is like you have to, you have to collateralize cash flows or assets. And if the, if the players are viewing themselves as an asset and appreciating asset, which is why they're moving through the transfer portal, double down. It's amazing. It's amazing. So for as much as I've talked about and thought about this stuff, like I never thought about that angle of it. But damn, I mean, you sit down and talk to a family about that and their heads just start spinning even more. And like, what can we do here? What can we, and because like you said, it goes, to me, it goes back to like the shelf life. That there's a finite amount of time that these kids had the opportunity to take advantage of the skills they have and they've worked their whole damn life to get. Right. And so they don't cash in now. There's no guarantee that the next contract next deal is going to come. No percentage of kids actually get drafted professionally. You might know what top you have, but it's small percentage. That's right. Less than five. Yeah. So, you know, they've got, they've got to get it while they can, especially like we talked a little about volleyball and what I'm calling below the line sports, but I think it's the right way to describe it. You know, some of these Olympic sports swimming, gymnastics. I mean, how are those athletes viewing, you know, their role in all of this? When those sports aren't, let's be honest, aren't bringing the same revenue that football is or basketball is or baseball is, but yeah, there's already some schools who are being smart about wanting to own the below the line sports, like the volleyball example we talked about earlier. Like wrestling. Okay. Wrestling is a good example. We're in the South, so we don't see it as much. Wrestling is huge in the Midwest, like Penn State, Ohio State, even Alabama, to some degree, they want to own wrestling. And it's just, they're just, they've just concluded that that's worth it. And they're offering six figure deals to wrestlers. So is that because a collective group or an individual person is like, I love this sport, I'm going to make sure my money goes there or is it in combination with the universe? It says we're going to focus on wrestling or both. It's definitely in combination. It has to be in combination because the, the athlete is still going to need a roster spot, right? So that's the first thing that starts the whole, whole conversation. But it is people waking up to the fact that I think the big 10 is quicker and smarter than the SEC and the, in some of this stuff. And where they're saying, let's go own these sports. Like we have millions of eyeballs that'll be, and then think about the economies of scale. If you own wrestling volleyball and gymnastics, you're just like, we're just going to do that. And then now you're at like 20 million people, amateurs, high schoolers, middle schoolers, who are looking to your school to as this, you know, the shining example where you want to go. Everything you do is amazing. But just that, that throws off so many positive things to the rest of your athletic program, to your football program. I mean, it's just, then your head starts to really think about like, how, what is that? More important than football? Is that, does that, you know, can it compete with football on some level? Yeah. If you own like the next, you know, man, it changes every day. I mean, I remember reading the news last year when Andrew Luck got hired to be the general manager of Stanford. It's like, first off, like his background is the quarterback there, number one pick, great NFL quarterback. Like, I don't know what his business kind of life was, it led him to that position. But there he is, finding himself as a Germaner of this, you know, university that's got all the sports, right? Like Stanford forever has been great. I mean, their football team is what it is, but like, they've got all the other stuff. So is that going to start popping up more and more, you think these universities dedicating someone like Andrew Luck to be the general manager of the entire thing? Yeah, they took a swing at it because Andrew Luck has notoriety, right? He's maybe their most famous athletic graduate, Christian McCaffrey maybe now, but he's got the notoriety going these rooms and say, look, you come to Stanford, you're getting way more than, you know, he can make the pitch, the sales pitch, right? But as you get, as this market flourishes and all the external, the industries around the industry rise up, it's inevitable. Like you're going to have to shape up or you're going to get left behind. You're going to, it's not just Andrew Luck. We need a capitalist mindset at the top of this thing, running this thing, right? Like a front office. That's why the head coach of a professional team doesn't like the GM. Right. Head coach unfair for these coaches to be asked to do that. That's not what they're good at. They love their players. Yeah, they love their players, but the GM has to be like, we can't have that guy on the team. So it's interesting about like the Bill Belichack and Lamberti combo that came in North Carolina like at the same time, right? Like, Package deal. It's not really worked out. So far. And then there's a third one to that package. He's going to remain unnamed. Okay. I think Jordan. No, no, no, I'm talking about Belichack. Oh, oh, yeah, yeah. But like that's, that's been thinking about how do we do this structure this in a way that makes sense. Bill's good. I was supposed to be good at X's and X's and I was going to be getting it recruiting. We'll see. And then Lamberti is good numbers, guys. So let's pair these two. I don't know. Time will tell. Maybe we'll work out. But they, I think it'll work out because they're just in, you're one of the thing. Like, they didn't just go and cut all the players, right? And the AD is probably on his way out there, right? And so they'll shape it up, but they need, they need some time. Like brand new model being applied to this thing. Yeah. Let me ask you this if you can answer because we're about to wrap up in time. My son is a high school freshman. His friends are the same age. My daughter's a high school senior, like I said, they're all athletes. They all have aspirations of playing college sports. Some are realistic about it. Some are not as realistic. I want to play MLB some are realistic about it because you can be some are not. If you're advising someone that young, starting off high school, like what should they be thinking about? What's the parents be thinking about focusing on for the next, you know, several years as they start to look at, you know, playing past high school sports? Get your game right. You know, that's still number one. At the end of the day, you still got to produce on the field. So whenever we tell people this, like let us handle this stuff. We'll get you the details that matter and the important stuff. Still get your game right. Okay. In Georgia, high schoolers can now get paid under GSAA rules, right? But it's still not a real market because the collectives are outlawed, right? So while you're in high school, don't worry about it. You still got to get your game right to get the notoriety to even be approached by some of these schools. When they approach you, then you can start a bidding war, okay? Because they aren't talking to one another. And so what we tell them is the bidding war will come. But first, you got to get your game right to where they start coming to you. And it just takes one because they will come with a check. As we always say that they're going to find you. If you're good, they'll find you. They'll find you. They'll find you. And I think the question becomes when they find you, people freak out, they need to call somebody like you. Somebody like me, get an agent, you know? Because now when you approach, when you come to the table for any NIL conversation under the house settlement, you are entitled to have your lawyer there and your agent there. Which used to be, if you did that, you blew your own lawyer, you blew your amateur status. Correct. So to me, that was a huge, like, holy cow. Like, it used to be like, you can't do that. And now it's, you better do that. You better do that. I mean, can you imagine like an 18 year old kid in their family trying to negotiate one of these deals and they have no idea the parameters they'll live by? Which can eat an up a lot. Yeah. I mean, you get, you get a deal put in front of you and it's like, we're going to do a hundred grain. That's amazing. Life changing money for a lot of people in one year. And you say, you don't have the wherewithal to understand what it means. What if it's tied to 70 appearances over the next year, right? What if it's, what if every appearance you can't make because you have practice because you have class because you have other things is a thousand dollars off of that. So now like, where are your interests? Are you really setting yourself up to succeed for the next one, right? I mean, it's, it's still really important to have some good advice. That's such good stuff. I mean, I would just add to that, you know, here's a hundred thousand dollars and the ability to go to the school that you've always wanted to go to. Your dream? Your dream. So, hell, my dream is to play, you know, quarterback at Georgia. That's all everyone to do. And now they're going to pay me a million dollars to do it. And I don't care what all this other stuff says of them and to your point, like, you don't know what you're agreeing to or what you could get somewhere else. Yeah. How to make them the bit against one another. And so you can't go into this blind. You've got to have an open mind. You got to be viewing all the different, you know, permutations and speaking to my like you. So I think that your role will only continue to increase year every year, every year. But thank God the y'all are there. I truly mean that because no one knows what's going on and I want these players and these families to be properly represented. So keep doing it, man. I appreciate you. And we're having a great time doing it. I always say this space is going to be regulated through litigation. So you need somebody who knows how to litigate the cases, read the cases and chart your course. And what that means is we're probably at least five years away from that, right? Because by the time it makes its way through a court system, it takes about that long. So yeah. And then that's on one topic, right? That's one issue. We have all these other things that have to be filled in. So awesome, man. We'll look to cheers. Cheers to you. I appreciate you educating me on all this. It's a topic we've been wanting to talk about forever. You explained it really, really well. So I had a great time. I'm impressed your ability to kind of get up speed with all this so fast, being the forefront of it. And we'll be watching where this takes you, man. Yeah. Cheers. So I'm going to go to the athletic or college athlete that is in this sort of skill level. Oh my God. Reach out to him. Make sure that he helps you out, best you can because you need it. So thank you all for listening. I know you enjoyed listening to this. It was a little different. Something we wanted to do. Very educational. So I hope you enjoyed it. And I'll see you next time. Keep chopping. [MUSIC PLAYING]