EP 139: Matt Brown (NCAA Expert) on Athlete Pay Drama, Realignment of Power, and Transfer Portal Chaos

College sports are going through massive changes—from athlete pay drama to superconference realignment and transfer portal chaos, not to mention the giant class action lawsuit playing out now. Matt Brown, the publisher behind Extra Points and one of the top experts on the business of college athletics, joined the show to break it all down. We walked through the full history of college sports, the current money dynamics, and where things could be headed. (00:00) Meet Matt Brown: Expert in College Sports Business (03:09) The Origins of College Sports (06:31) The Evolution of College Sports Broadcasting (14:53) Title IX and Its Impact on College Athletics (17:53) The 1984 Supreme Court Decision and Its Aftermath (20:03) The SMU Death Penalty Scandal (22:19) Conference Realignment and the BCS Era (28:22) The Rise of Conference Television Networks (30:23) The Arms Race in College Sports Facilities (34:41) The Role of Boosters in College Sports (36:03) Financial Breakdown of Major College Sports Programs (37:04) Understanding Nonprofit Accounting in College Athletics (38:20) Revenue Generation in College Sports (40:34) Athletics as Enrollment Management (42:04) The Flutie Effect and University Applications (44:37) Conference Realignment and Financial Instability (48:58) The O'Bannon Case and Video Game Licensing (53:59) The Northwestern Unionization Attempt (58:19) The Alston Case and Educational Awards (01:02:11) Name, Image, and Likeness (NIL) Marketplaces (01:05:51) The Role of Collectives in College Sports (01:12:08) Dependability of Young Campaign Partners (01:13:03) Transfer Portal and Its Impact (01:15:56) Rise of NIL Agents and Handlers (01:17:40) Economic Incentives and Transfer Market (01:20:37) Challenges in NIL Enforcement (01:22:48) House Settlement and Future Implications (01:25:38) Allocation of NIL Funds by Universities (01:44:26) Potential Super Leagues and Investment Challenges (01:48:07) Concluding Thoughts on College Sports Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast/the-logan-bartlett-show/id1606770839 Spotify: https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 🐦 Twitter - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  The dirty little secret in this industry is that it's really boosters who have overwhelming influence in who gets hired as a coach. You also have a different NIL market that I like to colloquially call it the bagman market, which is essentially money laundering, a talent acquisition or retention fee.

• 0:13Logan Bartlett?

  This bagman incentive structure that play.

• 0:15Speaker 00

  Get people to transfer as much as possible because they probably can't legally represent them in the pros, but they could get paid every time someone hits the portal. As agents, they could say, we gotta give you 20%.

• 0:24Logan Bartlett?

  Do you have like a swag of how those dollars kind of broke down?

• 0:28Speaker 00

  This goes to court and the NCAA loses, it will literally bankrupt the NCAA.

• 0:32Logan Bartlett?

  Welcome to the Logan Bartlett Show. In this episode, what you're going to hear is a conversation I have with Matt Brown. Now, Matt is the author of the Extra Points newsletter, where he dives into the business of college sports. Matt is one of the preeminent experts of everything going on in the college sports landscape today. So he and I have a discussion about the history of college sports and how we got to where we are today with the transfer portal, with name, image and likeness, with revenue sharing, with major conference realignment, and all the implications for those things going forward. This is a conversation I've wanted to have for a long time, as one of my big passions is college sports, and in particular, college football and basketball. And so we dive into all the nitty gritty of the sport today and what it looks like going forward. This is a really fun conversation

• 1:16Logan Bartlett?

  with one of the preeminent experts in college sports and business, and you'll hear that discussion now.

• 1:26Logan Bartlett?

  Matt, thanks for doing this. So maybe, can you give quick background for people that don't, don't know you?

• 1:32Speaker 00

  Oh, sure, sure. So I run a newsletter called Extra Points. I've been doing this full time since 2020. It's a publication that covers business, policy, and off the field stories in the entire college athletics industry, from the largest SEC and Big Ten institutions down to Division III and NAIA. I did that after seven years of Vox Media, when I was helping to run college sports programming for SB Nation, and had to learn how to dig into stories that were different from the sorts of things that maybe ESPN or CBS was doing, because we didn't have rights and we were much smaller and learning to how to better understand the math and the finance. And and and the public public policy, education policy within everything.

• 2:14Speaker 00

  Uh, it really helped because there's so many local newspapers that have to be so focused on. Who's winning this Saturday? Who's starting? Who's who's the top recruit high school kid on the list? They don't have time to go through the budget or to talk to the A D about anything. And that's where we've been focusing these last several years.

• 2:29Logan Bartlett?

  Yeah, well, that's great. Uh, when I, when I asked, uh, uh, people on Twitter, like who I should talk to about college sports. You you were recommended by a few different people. And then when I said I was doing it, I got texts from people that were, uh, particularly excited about this. Uh, so so I appreciate your willingness to come on. So college sports is such a weird world, one that I'm, um. Fortunately or unfortunately, kind of obsessed with. And so I I would love for people to walk away from this discussion. A little bit of history, uh, you know, dating way back, then some of the more modern history. And then maybe we can go forward to where we are today and then maybe looking into the future, uh, where where we're headed. So we could start, like, how did college sports come to be?

• 3:14Speaker 00

  It's a great question because how we do things in the United States, both in kind of the Paleolithic era of college sports. And how we do things now are completely different from anybody else in the world, even though many, you many, uh, countries have, uh, you know, higher education, uh, athletic programs, nobody does it anywhere close to the level that we do. This system started in eighteen fifty-two, like all all the way back, football wasn't even invented yet. Baseball wasn't even really a thing. We had a collegiate boat race between Harvard and Yale. And to kind of set the stage for the same darn things that we've been arguing about since all the way back then. This was supposed to be a purely amateur exercise, but it was sponsored by, uh, a a tourism company.

• 3:59Speaker 00

  There were chartered trains, uh, to to get people, uh, you know, from campus up to the event. There were, there were prizes given away. And once there was an enormous crowd, uh, students at these institutions began to realize like, oh, this is kind of fun. We should maybe branch out into other things. This ties into, uh, what would have become a really popular ideology throughout. Elite white society in the Northeast, this idea of muscular Christianity that you would that that you would, you know, because we didn't, we weren't going to go off and fight in the Civil War anymore. And people weren't going into factories that we could prepare people for the next generation of civic leadership through vigorous and manly sport, whether that was boxing, or football, or baseball, or some of these other things. So everything started

• 4:44Speaker 00

  in the Northeast. And that's just where where the early college football games are invented. And then people who started Yale, or Harvard, or Princeton, end up moving and starting a graduate degree at Michigan. And they start programs, or people go to North Carolina or Georgia, and they start programs. And it catches fire in a world where professional sports wasn't really a thing, or was just barely becoming a thing, and wasn't accessible to everybody. But people loved it. And from the very, very beginning, though, there were a lot of concerns about, is there too much money coming into all of this? Is it detracting from the sacred academic enterprises? And we can go back and read all these serious think pieces from the late 1920s about, is this is this too professionalized? Are we have coaches who are making more money than professors?

• 5:28Speaker 00

  Oh, my God, we got to rein this whole thing in. And then, of course, we didn't.

• 5:33Logan Bartlett?

  There's a thing, I saw that there was a thing, 1929 called the Carnegie Report that found that one in seven athletes were subsidized, bordering on professionalism. It contended the growing commercialization of intercollegiate competition, which is, it's 1929, we could be reading that, you know, 10 years ago, five years ago.

• 5:51Speaker 00

  It's a shockingly modern document. I think you just have to add a couple of zeros for inflation. But is there's charges of, I think, I think the exact term is tramp athletes, you know, a pretty popular thing to do would be to go bring a couple of guys off the railroad to come play left tackle for you ahead of a game. And if they never took a standardized test, or a class, or enrolled, well, you know, who's checking, right?

• 6:10Logan Bartlett?

  Well, North Carolina has been doing that for the last couple of years, I think. So, so, so, fast forward, I guess, 1950s, what happened in between 1852, the Harvard Yale Boat Race, to the 1950s? The sport just kept growing and picking up and spreading across different geos?

• 6:30Speaker 00

  Major reason for right. We had popular mass communication technology that you first first radio which blows up everywhere and then as we're coming out of World War Two television is beginning to become accessible to to families throughout the country, not just in markets like Philadelphia or Boston. And it turns out a lot of sports, football in particular, looks great on TV. And and so this was already the the live sports as a center of of social activity and and and and especially for elites and people loved going and we use the Work Progress Administration and with these federal grants to build great big stadiums everywhere. But then television really began to supercharge everything. And we had in the early 1950s is the NCAA freaked out and a bunch of school presidents freaked out because the thought was if we can watch this game on TV,

• 7:15Speaker 00

  I'm not going to go to Michigan Stadium and where it's eight degrees with 105,000 other people and watch it. And we depend on that gate money. So the NCAA for for decades controlled all of the national television for college football and then later for college basketball. They decided who was on TV. You would get one game, two, if you're lucky, that second game might be Washington Elite. It might be Campbell, might be an HBCU. It's not Notre Dame is not going to be on the television year in and year out, which because the as a way of controlling the money, controlling the the travel and and trying to to slow down the economic growth of this entire enterprise, which then of course opened up a window for a little something called the NFL to come and take its place in America's hearts.

• 7:58Logan Bartlett?

  Yeah. And 1950, I guess, was the the time that the term student athlete actually came into national parlance, I guess. Was that I guess I'm curious, is that like a purposeful term that was actually branded by the NCAA and tried to use to warp perception in some way? Or was it accidental?

• 8:18Speaker 00

  No, it was extremely not accidental. And the truth is, I think, actually kind of depressing. A lot of people don't know about it. What happened is there was a college football player, a gentleman, I believe Ray Dennison, who was who was playing at would be considered a vision two institution now, who dies as a result of football related injuries. These things kind of happen. And his wife tries to file. A worker's compensation claim and which was originally approved. And then the NCAA created the term student athlete as a way of absolving itself from those damages. You can't give workers comp if somebody's not a worker. They're somebody who's who is involved in just a very elaborate extracurricular activity. That that we happen to have 30,000 people behind it here. Uh, and so, and so we can wash our hands from that.

• 9:04Speaker 00

  And then that term, uh, through aggressive publicity from the NCAA and its member institutions kind of wormed its way into popular lexicon and also into the judiciary, uh, cementing this, this amateur ideal, even though that became increasingly divorced from reality.

• 9:21Logan Bartlett?

  And then 56, uh, athletic scholarships, I guess, are, they start to be allowed purely on, on ability?

• 9:28Speaker 00

  Yeah. So this was also an interesting debate because you really had two schools of thought about the morality of an athletic scholarship. You primarily in the Southeast, uh, and it were large campuses tended to be in smaller cities with that were less economically developed. You would have administrators say the most honest thing to do is to give somebody an athletic scholarship. And then they will not be, uh, as predisposed to go chase under the table payments or to do things dishonestly. We know why they're here. And then you would have the Big 10 and the Pac 12 predominantly in more, uh, industrialized, larger population centers. That would say, no, to give an athletic scholarship would be to break amateurism. That makes you essentially a professional athlete. You should be, you should work your way to college like everybody else.

• 10:13Speaker 00

  But if you were in Columbus or Minneapolis or just outside of Chicago, there were lots of fake jobs that, that you could take to pay your way through everything. And so it was, it was, this was this, this constant debate about what was the actually the more moral thing to do. In the end, the South won and variations of that debate would continue really for the next 80 years about what's more honest, uh, keeping the money on top of the table or under the table. Uh, and, and generally the movement has gone continuously to put money more in the open.

• 10:43Logan Bartlett?

  And at that point, was there a limit to the number of scholarships that could be provided? Or what, how did the governing body that was, I guess, the NCAA handle this, this decision?

• 10:55Speaker 00

  Yeah, one thing I think that's important also for people to understand when we're talking about the NCAA, especially in the 1950s and the 1960s, the NCAA would have had like three employees in the beginning here, right? It is, it is a membership driven organization, even today. So if there's a thing that, that you and I think is dumb, or that we don't like, or a policy that seems confusing, it exists because membership, typically university presidents, voted for and asked for that particular thing. And the way things would work in the 50s and 60s, a lot of those rules would be specific by sport. And sometimes a conference might have a different rule. But especially in college football in the 1950s, 60s, and early 70s, you would have some schools, Nebraska was particularly famous for this, but they certainly

• 11:40Speaker 00

  weren't alone. Alabama and Texas followed this as well, where you might put 105, 110 people on scholarship. You'd sign 50 kids, a recruiting class, and you do that in part just to keep them away from other schools. And then you, you put them through hell and you'd recognize that half of them would quit because you're, you're, you're, you're blowing up their kidneys on the squat rack and everything, and then you move forward. Whereas in the Big Ten and Pac 12 and elsewhere in the Northeast, you would generally have smaller rosters. And that was the case until that limit became standardized. Now it's at 85, about to shift to 105 for next year.

• 12:12Logan Bartlett?

  And the, the payment, like, the concept of, you know, but whatever, someone local in town paying you for a touchdown or anything like that, was that happening then? Or was that something that came later as it got more and more professionalized and that the incentives were greater?

• 12:32Speaker 00

  So I, you know, what you're describing here, the colloquial $100 handshake, or, or a booster benefit for, for doing something well, that has existed about as long as football has existed. I wrote a book about this in 2017 that touched on a couple of chapters. There's a lot of contemporary stories of prep athletes at, you know, At the most elite boarding schools in the Northeast, having these conversations with boosters deciding between Princeton and Yale. There were even early NIL deals in this era where a one way to keep an athlete eligible or enrolled at a place like Yale would be to give that person the the unique rights to sell tobacco on campus or a particular brand of tobacco or a cut of particular football tickets, you know, just like,

• 13:18Speaker 00

  maybe not with tobacco specifically, but but very similar to how deals are structured right now. It was always banned. It was always something that you that you were not supposed to do, even a very small amount of money. But the idea of giving a little something, something, whether that's cash, a wedding gift, sometimes guns throughout the Southeast, sometimes other presents, that was going on since the 1910s.

• 13:42Logan Bartlett?

  And when did when did the policing of it sort of pick up in a way that, obviously, people know about SMU death penalty and all that. But like, at what point did the NCAA start hunting for this?

• 13:53Speaker 00

  This really became more of a thing once we started moving into the late 1950s as the NCAA as a centralized structure cemented control over television. In the early 1950s, that wasn't really that big of a deal because there weren't that many TVs. But once you had different national television deals sold to ABC or to NBC or DuPont or some of these other bigger companies, and then there becomes real money coming in. The one, the NCAA now has a sanction that actually matters. They could say, you don't get to be on TV, rather than things being controlled by conferences or at a lower level. Now, once you have more money coming in, now you have the opportunity to have the resources to hire a staff,

• 14:34Speaker 00

  including investigators, or including the the operation necessary to enforce some of these rules. And for a long time, you know, if the NCAA is basically running out of a cubicle out of the Big Ten and it's two people and a secretary, you have no cops. So it doesn't really matter. Once money started coming in, then you had a regulatory state.

• 14:52Logan Bartlett?

  In 1972, Title IX is passed. I think people probably know the name Title IX and maybe the implications, but can you give a little bit of a background on like how that came to be and what the implications were for athletic departments?

• 15:07Speaker 00

  You know, it's interesting. As I understand the story of Title IX in the US Senate, that was not crafted specifically with athletics in mind, even though that policy became interpreted to mean it's very significant changes for how sports run.

• 15:23Logan Bartlett?

  I think it was sex discrimination in education programs, I think was like the terminology of it, which athletics became one of the applications of it, but...

• 15:34Speaker 00

  And I do know that it took several years for that really to stick because a lot of administrators, including at the NCAA, said, "Oh, my God, this will bankrupt us if we have to start suddenly, you know, offering scholarships for these eight other sports or spending some level of parity between men's and women's sports." And, you know, really until the late 70s, early 80s, did this become more of a standardized thing. But what, in short, complying with Title IX for an athletic department means that you have to offer or be moving towards offering equivalent opportunities for men and women. So it doesn't necessarily mean you have to spend exactly the same amount of money, but you do need to offer proportionate scholarships. If your student body is 56% female, you can't offer 60% male scholarships

• 16:19Speaker 00

  and 40% women's scholarships. It means that not only do you have to offer more sports, you have to offer scholarship support for those sports and then backend support, things like trainers and academic support specialists and buses. Even now, most universities are not completely compliant with Title IX, whether on the scholarship side, on the publicity side, on the administrative side. It tends to only really be enforced when there's a lawsuit and that process takes a long time. But even this kind of baby compliance led to an explosion in opportunities for female sport participation at elite levels and is a major reason why America tends to do so well in international athletic and Olympic competitions. There's a middle bench developed there that doesn't exist in many other countries.

• 17:04Logan Bartlett?

  And so then, as we go through the 70s, popularity continues to grow. And then I guess the next point, I don't know if there's something else you would want to highlight through this period, but the next big one in my mind was 84 Supreme Court NCAA versus Board of Regents. Is there anything before that period that worth noting?

• 17:22Speaker 00

  I mean, I think the only other major trend, like, you know, transition from the 60s to 70s would be the begrudging, widespread integration of college athletics, which was a huge cultural flashpoint throughout the South and Intermountain West, led to protests all over the country. But eventually, whether it was by gunpoint from the US Marshals or because schools just wanted to be good at sports, this went away by the 80s. Just about everybody had moved away from exclusively white rosters.

• 17:52Logan Bartlett?

  Yeah.

• 17:53Speaker 00

  But you're right. Yeah, Board of Regents is, I would say, a massively important decision and really begins, I would say, like, the beginning of the truly modern era in college athletics. What's important to realize, right before this Supreme Court decision, again, all of television for college sports was controlled by the NCAA. They would have their one television contract, one preferred partner, and they decided who was going to be on TV and who wasn't. Now, we take this for granted because every single college sporting event from Division I to JuCo is televised or streamed in some capacity. And there were more and more companies that wanted to be involved. If you have a competitive bidding process, it stands to reason you're going to have a higher rights fee. And some of the larger

• 18:38Speaker 00

  schools in college athletics, Oklahoma and the University of Georgia being two of them, but certainly not the only ones, realized they were losing a lot of money and a lot of potential exposure by signing up for the NCAA deal where they had to share everything with Cal State Fullerton than doing their own deals. The NCAA said, no, the major schools said this was a violation of, this is unfair restriction of trade, this should be struck down on antitrust grounds, took it all the way to Supreme Court, and they won, which then deregulated the control of broadcast deals. This is what allowed the SEC or the Big Ten or anybody else To sign their own broadcast deal with ESPN or Fox or CBS.

• 19:19Speaker 00

  It took a couple of years, but by the early 90s, suddenly the amount of money that flooded into college athletics as from these major broadcast companies changed everything. In order of magnitude, tens of millions of dollars more to each university because of what's available now for major broadcast partners.

• 19:39Logan Bartlett?

  And March Madness is picking up around this time in a meaningful way. And obviously everyone knows the Jim Valvano and all those things that along with the mass broadcast rights. And I guess it's important to note that the NCAA does control March Madness in a way that they don't some of the other properties, which has some implications for as we look forward and how all this stuff's going to play out and think about some of the other stuff. One of the other things that happened in the 80s, obviously we alluded to it, but was the SMU death penalty in 87. What was the fallout in your mind from that and the implications that kind of trickled through over the course of the next decade?

• 20:17Speaker 00

  It's a banana scandal. There's a really good book on this. If anybody has some curiosity called A Payroll to Meet, written by some old Dallas Morning News reporters that kind of chronicled everything that was happening with SMU. SMU wasn't the only school in the old Southwest Conference that was breaking amateurism rules by giving money to football players under the table. That would have been literally everybody in that conference and virtually everybody that was trying to win. At SMU, it was particularly egregious. The scandal eventually involved the governor of Texas and involved this entire shadow business community and fake payrolls and trying to hide things from Methodist bishops. And it was enormous.

• 20:58Speaker 00

  And because the NCAA looked at SMU and said, you guys are habitual line steppers. You have been on probation or dinged or penalized in some capacity for like the last 10 years. And clearly docking you scholarships or fining you is not sufficient. We're going to do the most serious thing we could possibly think we can do, which is you don't get to play football next year. And it was ultimately extended for another season. They didn't have football at all for two years. And then what? Was a dominant team in the 70s and 80s was awful for really almost all of our lives, Logan, until very, very recently, SMU became a nationally competitive program again.

• 21:39Speaker 00

  And the fallout from that was so significant that NCAA membership began to think, we can't possibly do this to anybody else again, even though other schools have arguably done worse things than anything that SMU was accused of doing back in the 80s.

• 21:54Logan Bartlett?

  And so through the 90s, obviously, a lot of the trends that we've talked about are playing out. I guess the big things that start to happen, at least in my mind, are major conference realignment. Some of the initial signs of that start coming. And then the BCS in 98, that was, that came to be as well. Can you give a little background on those two things and how they came to be?

• 22:19Speaker 00

  Yeah, I think a realignment to me is the biggest one. So college athletic conferences back in the day used to be mostly centered around geography and shared institutional vision. You would build a league around schools that believed mostly the same things that you did about college sports, that were similar institutions. And it would be kind of nice because these are also the people that you're going to bump into on a regular basis. I live in Chicago. I'm a graduate of a Big Ten institution. People from Iowa, from Michigan State, from Michigan, Illinois, they're all circulating around here and you're going to bump into these people. What the, and mostly leagues that were established before World War I

• 23:01Speaker 00

  or after, right after World War II, were mostly, with a couple of exceptions, but mostly the same general groups that were existing as we came into the 90s. But as conferences were able to sell the rights for their own media rights packages, they began to realize we can earn more money. If we have more inventory to sell to Fox or CBS or Raycom or somebody, so being a bigger league gives you more opportunities to sell games. And if we are in areas that have our larger television markets, our games will be in front of more people and they'll be more valuable. We can make more money that way. The SCC kind of, you know, got this kicked off when they expanded to 12 teams and added a conference championship game. They struck out on the first couple of teams they tried to get. They wanted to get Texas and Texas

• 23:45Speaker 00

  A&M. That didn't work out. They couldn't get the, couldn't get Florida State. They ended up bringing in Arkansas and South Carolina. But that championship game as a made for TV event was extremely lucrative. Big Ten expands, grabs Penn State, longtime Eastern independent, and then now has exposure in Philadelphia television markets and across all of Pennsylvania. And you began, from beginning around 91, 92, all the way up until today, you have a game of chicken of leagues expanding further and further geographically, further and further away from any sense of historical rivalry in the name of trying to create better made for TV television inventory or market share, which now leads

• 24:27Speaker 00

  us to a world where Cal is in the Atlantic Coast Conference and UCLA, Nebraska, and Rutgers are all in the same league. And, and it's, it's really frustrating for a lot of consumers. We also had that with the BCS because in every other, almost every other sport that I'm aware of, professional, collegiate, anything else, if you want to know who's the champion, Logan, we have a playoff. We have a postseason. There's, there's a regulated prescribed pathway to determine who the best team is. We didn't do that in college football for 145 years. Part of that was, we didn't, you know, in the very beginning, it was too expensive to schlep everybody on trains, you know, across the country. There wasn't really enough intersectional play. It was done by these, these bowl games that were

• 25:11Speaker 00

  sponsored by civic booster groups and at least one case organized crime. Shout out the Orange Bowl. But, but there was, there was a lot of reticence to breaking this kind of tradition to build a playoff that would, would make sense. And the BCS was, was seen as kind of a compromise where. Rather than being forced to play in a bowl game that was tied to your conference based on a decision from 1940, you would have a very complicated computer system that took the combined coaches polls and reporter polls and SAGA and ratings and you know what what quants in graduate schools across the country would figure out to create a one versus two matchup for the first time.

• 25:49Logan Bartlett?

  And by the way, before this, the way the national champion was declared was you would go to your regional bowl game or wherever you were signed up. If you were in the Pac 10, you would go to you would go to the Rose Bowl or whatever it was.

• 26:01Speaker 00

  Yeah.

• 26:01Logan Bartlett?

  I mean, you wouldn't play the number two team. If you were the number one team, you would have some reciprocal rights with another conference and then they would play. And then ultimately, some group of people, be it the coaches or athletic or journalists would would vote on declaring who the national champion was, but you'd end up with two, three undefeated teams or a lot of controversy or shared national titles. I think Alan Damask will do this day claims like 40 national titles. And so it was very opaque and you'd have multiple people sort of claiming some share of a national title.

• 26:38Speaker 00

  Yeah, there would be multiple trophies and there would be bribery and there would be scandal and vote trading for all of these things. And some university president said you couldn't go to a bowl game two years in a row. So you might go undefeated and you don't get that postseason game. And sometimes you'd be you'd be one game over 500 and you wouldn't get a bowl game. It was none, none of it was standardized in the least.

• 26:57Logan Bartlett?

  So for me as a kid growing up, BCS was a welcome addition to the world because at least there were some, I mean, we didn't know what the black box algorithm was at the time, but at least there were some bureaucratic system that then would have the two teams play each other. Number one and number two would actually go on the field and play one game against one another, which felt a little more fair.

• 27:19Speaker 00

  It was, I think unquestionably superior to the previous system where it would be very rare that you get a number one versus number two game. It would usually require both of them to be independent and you would need a little bit of luck. Now, of course, what we found out is that it can be difficult to figure out who the two best teams are in the country when you only. Play 10, 11 games. There's not a lot of intersectional play. Having beat writers vote on this stuff is difficult because if you're a beat writer in Lincoln, Nebraska, why are you watching a game that kicks off at 11 o'clock at night? You have to file copy tomorrow. You're just, you're going off of vibes essentially. And they kept tweaking the formula for the BCS. Like, oh, everyone hates the team that popped out this year. Let's change the math. So Virginia Tech never gets this invitation ever again. Or now we need to change it to make the strength

• 28:04Speaker 00

  of victory matter more. Get rid of the coaches less. It took a long time before we were able to actually create an on the field playoff, which is something everybody else has figured out in the 1930s. But for the greatest and dumbest sport there is. It was a much more modern invention.

• 28:21Logan Bartlett?

  That's a great way of describing it. Well, like, as this is happening, people start launching, conferences start launching their own television networks, right? And so the SEC Network comes to be, the Big Ten Network comes to be, which is kind of tied into all this media licensing rights and all that. But who was the pioneer of making that happen?

• 28:40Speaker 00

  I want to say that technically, the Mountain West Conference was the first to actually put something to market. But in the industry, it's common, the Big Ten is just typically referred to as the real pioneer in this space. The Big Ten Commissioner Jim Delany, who previously has a deal with ESPN, doesn't like the deal that ESPN offers, decides, screw it, we'll do it ourselves. And we'll roll the dice. We'll do a partnership where Fox will have some stake of the enterprise and we'll build our own studios and we'll control some of this inventory for what we would call tier three rights. So not the Ohio State Michigan football game, or the Purdue Indiana basketball game that might be on CBS or ESPN or Fox, but all these other sports.

• 29:24Speaker 00

  And all this other inventory that might not be on linear TV, it might be on local television or something else, we'll put that on our own channel. And the Big Ten Network struggled in the very beginning with distribution. I'll never forget it. Like, I was living in Columbus at the time, the very first football game that was on BTN. Was Appalachian State at Michigan in 2007, which you're smiling here. I'll always smile. I think in case you didn't know about this Appalachian State at the time was a one double A FCS school. Michigan was ranked top five Appalachian State won. I'll tell you in Columbus, that was very funny. You could buy Appalachian State shirts on High Street for for three years after that. But most places didn't have the game. It was it wasn't part of the standard, the standard

• 30:06Speaker 00

  collection. We had to go to a bar that had like a fancy satellite dish that had it. But in a year or two, distribution was was standardized almost nationwide and the Big Ten made so much money that everyone, almost everyone else tried to emulate that particular model to to varying degrees of success.

• 30:23Logan Bartlett?

  In the late 90s and 2000s, at least in my memory, it also starts to be when we start having a little bit of this arms race of facilities. And so, big projects and the lifting of college, the coaches' salaries as well. And then there start to be more and more of booster involvement and sponsorships, be it, I think this is around the time Phil Knight started getting more and more involved with with Oregon specifically and their football department and the facilities and all of that stuff. But am I fair in sort of placing this around that time for the for the arms race that started to happen?

• 31:01Speaker 00

  You know, I would say on some level, this this dynamic existed early even in the 1950s. But once we get into the 90s, you have all this more money coming in. And this is, I think, another, just from a business perspective, a major difference between this and pro sports. Right? Like, my favorite basketball team is the Cleveland Cavaliers. I grew up in Ohio. And if the Cavaliers have a really good year, and they make a bunch more money from television, and they sell a bunch of of Donovan Mitchell jerseys, that money gets to go to Dan Gilbert, and it gets to go to the Cavaliers' ownership group, and they can take profits. In college, you can't really do that, but you, because you're not a for-profit enterprise. And you also can't directly pay your labor, because if you were to give some of that money to the

• 31:44Speaker 00

  football players, that would be an NCAA violation, and you'd be sanctioned to the moon. But so if you wanted to compete and get the best athletes possible, which you needed to do in order to win games and get all of this money, you had to spend money on them, but you couldn't do it directly like you would do for literally any other job. So then a lot of that money began to, because you had to spend it, would get spent on and still, you know, things around athletes. And so that would be facilities. It would go to coaches because quality coaching does matter a lot more at this level than it does with the pros. And so coaching salaries began to explode. And not just head coaches, but assistants and strength coaches and administrators began to make a lot more money in the 90s

• 32:29Speaker 00

  and early 2000s. And then also additional services. So if you walk into a locker room or a football complex in a place like Clemson or Tennessee or Ohio State now, it's not uncommon for there to be a barber shop in that facility, for there to be lots of video games for you where you can get virtually every meal and indefinite snacks within this area. It's kind of like, you know, what the tech era used to be during the heyday of tech companies where Google would do everything from do your laundry to be your personal chef, the one to keep the best engineers and two to keep the best engineers forever going home so that you're comfortable continuing to do stuff. You would see that a lot for elite college athletics as well. The travel and side perks that you would get for Duke

• 33:12Speaker 00

  basketball or Michigan football in many ways are better than you'd get in the pros. And that's even, that's even true now.

• 33:18Logan Bartlett?

  I think Clemson famously has like a slime from one floor down.

• 33:21Speaker 00

  I've run down that slide before.

• 33:23Logan Bartlett?

  Yeah, there are mini golf thing or something.

• 33:26Speaker 00

  Just outside, yeah.

• 33:27Logan Bartlett?

  It just starts to be like never ending arms race of one upping each other. And I guess, I mean, I think implicitly people listening hopefully know this, but there's, there's a union that exists in the pros and these are workers. And at this point in time, these are amateurs that that can't be paid. And there's all the litigation that could come after you from the NCAA disbaring you from, you know, being able to participate if you take this money. And so all these dollars are flowing around. And then there's also this, this weird element of because they're not professionals and they're not unionized in any way, there's still people that care very deeply about the winnings. And so there's people hanging around the program that for

• 34:12Logan Bartlett?

  Modest sums of money can influence where the kids go to school or whether or not the, you know, the kid gets rewarded for swearing the touchdown and they're going to stay around. And so there ends up being these hanger-ons that don't really exist in pro sports in the same way, both because I guess the unions, because the quantum of dollars that the people are making, because there's actually an ownership structure in place and there's not the tampering and all this stuff that happens behind the scenes in college sports.

• 34:41Speaker 00

  There's very much that, and I would add, there's a third dynamic that's very unique. When we look at, particularly for the biggest schools, where they actually get the money to run the department, television money is very, very important. For a top-line Big Ten or SEC school, that's usually the single biggest line item. But it's not the only one. And the Tennessees and Ohio States and Alabama's, they depend on ticket revenue, absolutely. They depend increasingly on licensing and corporate sponsorships and intellectual property, but they also need donations. They have to have their hand out to go fund the salaries and the scholarships and the administrative superstructure to run everything. So it's

• 35:23Speaker 00

  not just these boosters that are kind of hanging around to influence decisions for athletes. The dirty little secret in this industry is that it's really boosters who have an overwhelming influence in who gets hired as a coach, who gets hired as an athletic director, who gets this kind of parking, what sports do we sponsor. A lot of, the level of influence that you might expect maybe some minority stakeholders or owners to have for larger professional sports franchises. When you have to depend on extra people to fund the operation, those people aren't just doing it out of the goodness of their heart or for the tax dodge. They want some influence as well, and that manifests itself all over college athletics.

• 36:03Logan Bartlett?

  I think it's important to note maybe here, as we kind of move into the other element of the conversation, the rough profit that comes from the different sports and like the split. If you're looking at a pie, I think these numbers are pretty publicly released, but my understanding today, the, you know, the major universities in the SEC or ACC or Big Ten or whatever it is, I think the major ones, you might be able to correct me on this, are like generating 200, maybe 225, maybe up to 250 a year in revenue roughly.

• 36:35Speaker 00

  Yeah.

• 36:36Logan Bartlett?

  Is that right? In the rough splits of profit that come from, and it's a little hard to disindiguate because you know, the donations, as you, as you highlighted, cutting, I think, go into a big bucket rather than be, maybe each school is different on this, but discretionarily called out. But roughly in my mind, I, I guess you have breakdown of like what the different splits tend to be for revenues.

• 37:02Speaker 00

  I do. Yeah, this is a major part of the coverage that we do. And one thing which, which might sound pandemic, but I feel like I'm obligated to say this out loud every time I get this opportunity, is that it's really difficult to conclusively state who's making a profit and who isn't, because these are nonprofits, which means that they do their, their auditing and their accounting differently than many of the tech companies that you might talk about, or the companies where many of you folks listening might invest. We can't get a P and L statement from Ohio State Athletics. What they do, they're required by federal law and by the NCAA to produce a, like a membership financial report, which, which is standardized and you have a couple auditing firms that do it. But there's a lot of expenses that show up on paper that are maybe not necessarily real expenses, particularly

• 37:46Speaker 00

  for scholarships. And, and I say that because it's a common talking point that a lot of major schools will use to Congress, or to judges, or to regulators to get out of paying for stuff, saying, but I, you know, I'm just a humble farmer that, that barely breaks even for everything. And like, well, if you had to show a profit, or if you were incentivized to show a profit, you would. What I could tell you is like, in Division One, we've got about around 350 or so institutions. I would say that if we make an, we acknowledge the kind of goofy accounting that you're incentivized to do, I would say the overwhelming majority of power conference institutions are generating more revenue than they're spending. Rutgers probably isn't. When Rutgers is pleading poverty, I believe them. Like

• 38:30Speaker 00

  that's, that they've, they've got their own problems. There's, there's a few of those. And then you have some schools at the bottom, your Wright States, your Maryland Eastern Shores, your Utah Techs, that are hilariously in the red, you know, might be generating, actually generating $4 million and spending $26 million. And they might say, well, we're not here to turn a profit. Nobody asks if the English department's turning a profit, right? Like, we're here for marketing and student opportunities. And that's fine. As far as sports, what I could, what I could, what I could tell you is, it is pretty uncommon. For a sport outside of football, men's or women's basketball and baseball to generate close to the revenue it takes to be self-sufficient. There are a few examples of this. Utah's gymnastics

• 39:15Speaker 00

  program, there are the Oklahoma softball program is close. There are some college baseball programs that generate north of six figures from media rights and ticketing. But that's not the norm. The norm is football, some men's basketball, handful of women's basketball, and then a few exceptions. Everything else generally costs more than it brings in.

• 39:39Logan Bartlett?

  Yeah, and I guess one of the concepts that we'll get into, but most of those profitable businesses, at least as I think how the universities account for it, profitable sports, at least how they account for it, are conceptually funding some of the other ones, given the arrangement. I guess, is that a technical thing that they're actually literally funding, or is that just a conceptual thing at the NCAA that the university thinks about?

• 40:09Speaker 00

  Well, I mean, if you've got a general athletic department bucket for that word you're going to use to pay out everything else, and 80% of your revenues are tied to media rights or ticket sales or corporate sponsorship surrounding your football program, whether you want to conceptually or technically or explicitly, I think that might be a distinction without a difference. Like, the money's coming in from football. There's one other quick wrinkle. I think I want to, we're talking about profits and revenue and everything, for the university, I think, support to point out, which is athletics as enrollment management. What the athletics and finance world looks like for Ohio State or Tennessee, it's one thing. But there aren't

• 40:50Speaker 00

  very many Ohio States or Tennessees, right? We've got 350 or so of these institutions. A pretty common thing everywhere across Division III, very common in Division II, common across a lot of smaller Division I institutions, is to have large athletics programs that mostly exist to generate tuition rather than ticket sales or television. Nobody is going to pay to watch Youngstown State swim team and this I say this out of love, right? But there's a lot of people who are on the Youngstown State swim team who wouldn't be at Youngstown State if they weren't swimming and if they're collegiate swimmer, chances are they're probably not a Pell Grant kid. That's probably somebody who's paying closer to full tuition. And if you're an under enrolled school, if you're facing demographic headwinds or you're

• 41:33Speaker 00

  you're struggling to recruit or retain students, then athletics can can be a great tool for that. And so Youngstown, as an example here, might say, yeah, on paper, our swim team loses hundreds of thousands of dollars a year. But if we step outside the athletic department, it's profitable. And that that calculus is the reason why a lot of smaller schools have stunt programs or rowing teams or 50 people on their track roster.

• 41:57Logan Bartlett?

  And that's that's their that's the direct enrollment for the sport itself. Then there's, I think what people call the Flutie effect after Doug Flutie in Boston College back in the 80s. But I think Nick Saban at Alabama is a great example of it. I pulled the numbers when Nick Saban was hired in 2007, Alabama received 14,000 applications a year. By the mid to late 2010s, that had grown to over 40,000 applications a year. It tripled in a decade. And even more striking in 2007, about 26% of students were from out of state. Today, that number is over 60% as well. And I think people probably understand that out of state, when you're a state university, you pay lower when you're in state than when you're out of state.

• 42:40Logan Bartlett?

  And so if 60% of your students are coming from out of state, you're not just getting a better caliber of student because of the application, but you're getting one that's willing to pay far more than the in-state one as well.

• 42:52Speaker 00

  Yeah, yeah. In a place like Alabama, that's mission critical because Alabama high schools don't produce enough high level graduates to support seven, you know, public institutions like they have. Auburn and Alabama have to recruit out of state, just like West Virginia does, just like the Montana schools do or Delaware. Like there's, there's, there's, there's not enough people to make it work. I will say like, we've written a lot about the Flutie effect on extra points. Nick Saban's Alabama is a great example of this working. There's, there's academic literature to suggest that this was a real thing for Joe Paterno at Ten State before that story reached its, its, its, its, uh, different ending. Um, and Gonzaga with men's basketball is an example here. Well, all of those put together is

• 43:34Speaker 00

  they hired one of the very best coaches in the history of the sport and they kicked ass for 15 years in a row. There is a temporary spike that happens if you are unexpectedly successful in a high profile sport for one year. But then it goes away. Right? Like St. Peters is not continuing to dine out on, on beating Kentucky. Um, you know, they, they enjoy a huge spike and then it goes away. Fairleigh Dickinson, when they beat Purdue and they were the 16 seed. Spike and I've, I've interviewed people at the school. It goes away. And, and this is something that sometimes university administrators. You know, used to justify athletic spending. They say this is the front porch for our university. This is our best chance for earned marketing. But you only get that if you win. And when you're a low major and you win, your coach leaves and all your players hit the transfer portal and it's very difficult to sustain it.

• 44:19Speaker 00

  For every Nick Saban in Alabama, there's a whole lot of people that are paying money like they hired Nick Saban and are hoping that they hired Nick Saban. But there's only so many Nick Sabans out there.

• 44:29Logan Bartlett?

  Makes sense. Yeah. Uh, so, so to the 2010s, we're seeing, uh, increased, I guess, um, uh, conference realignment to the point that it starts to make less and less, uh, regional sense. You see, uh, A and M and Missouri end up joining the, the SEC as well. You see some more conference realignment happening. I guess anything to call out in your mind through that period?

• 44:53Speaker 00

  Uh, I, yeah, this, I, if I'm, if I'm getting the years right, this is where you begin to see the cracks of, of the big east. Which was a made for television conference at first centered around urban Catholic institutions in the Northeast with a focus on men's basketball. Uh, and, and then they tried to build a dual identity where you would have your Georgetown's and, and your providences and your St. John's. I mean, these basketball institutions, but you'd also try to bring in schools. That cared about this and football where you'd have West Virginia and Syracuse and, and Connecticut. And Miami, Florida, who is a, you know, southern, South Florida school that recruits very heavily in the Northeast for their, for their student body. And that, that began

• 45:35Speaker 00

  to split as the football schools began to join the ACC or to pursue other competitive options. And the, the financial needs and interests of those schools were different, were harder and harder to square. And this is something that you began to see a lot at the tail end of the 2010s and is now a major issue now. If your conference isn't built around shared geography or shared institutional ties, shared religiosity, shared budgets, if you had, there's less in common there, you have to make a whole lot of money to paper over those differences. And the second somebody thinks they can make more money somewhere else, they'll do that and it'll fall apart and it's highly correlated with instability. And, and you began to see this here and it's even more hilarious when you look at some of the smaller conferences. I think over that decade, it feels like every

• 46:20Speaker 00

  third school played at least one season in either Conference USA or the WAC. Like it, it was blown up. Nobody had any idea what kind of geography that was. It's just a, a bunch of musical chairs.

• 46:30Logan Bartlett?

  Hey, but we talked about at the conference level of their poaching, but it does also start to play out that Texas is saying, well, I'm bringing all this value to the Big 12 and I have my own television network. Why am I carrying water for some of these other programs that don't have beer, the national recognition and they were splitting this pie and that doesn't feel stare in terms of how it's being allocated because we're, we're this big independent brand. And I, I think that's always been kind of Notre Dame sentiment of why they stayed independent all the, all this time as well.

• 47:00Speaker 00

  Sure. For them, USC was threatening to leave the Pac 12 since well before either of us were born, but before they, they finally ended up doing it because turns out there's a lot more economic opportunity in Los Angeles than Corvallis. And, and there were tensions existing in the 50s, they would only get worse, uh, moving on. What we have in pro sports, is every pro sports team equally valuable? No. Like the Dallas Cowboys are a bigger deal and worth more money and bringing more eyeballs than the Jaguars, um, or the, the Browns or, or some of these other places. But you have an almost socialized system of revenue. Sharing and a shared media contract and some some universality to to prevent you know the Cowboys from saying actually we're going to go join the Premier League

• 47:45Speaker 00

  or we're going to start our own you know NFL with just the NFC East or something. That doesn't exist in college sports and when you add that dynamic to the provincialism and elitism that's part of higher education, you end up with I think some pretty explosive and personal results.

• 48:02Logan Bartlett?

  Yeah, so 2014, we had college football playoff finally gets to be a thing. I think it was rumored at the time. What I have here, contract was reportedly about $7 billion over over 12 years. So we're starting to get significant money being passed around. And I see also was it 2014 that O'Bannon case popped up?

• 48:26Speaker 00

  I think I think that's right. You've got two two two dynamics happening during this decade. They but we've been trying to get a college football playoff going since you know 1950. Finally happens. It's four teams. And there's you know, we had a bunch of a bunch of fighting about who those four teams should be from the very beginning. An improvement over two, but but still lots of arguing. And then you began to see more lawsuits puncturing the the like the historical protection that the NCAA had had had enjoyed. So we could talk about O'Bannon here for a second. Ed O'Bannon was a former excellent basketball player at UCLA. And throughout the the 2000s and 2010s,

• 49:12Speaker 00

  you could buy video games for that where you could play college basketball and college football. The the most popular series for college football was the NCAA series produced by Electronic Arts. There are a few different basketball series produced by 2K Interactive, by EA, by by Sega Studios and a couple other places. And those video game companies would pay licensing fees for the intellectual property of the universities. And sometimes with ESPN or broadcast partners or to the NCAA itself to use their marks and everything. So because it's a lot more fun to play a video game as the university. Washington than Seattle that just happens to be purple. Uh, you know, I think I have a Sega Genesis game here in my office in the beginning.

• 49:52Speaker 00

  Or you could play college football without those licenses and it's just like, you're now playing Columbus and it's red and gray and it's a coincidence. So you could do all of that, but you would, you, they didn't have the real players. You play Madden, you could play as Patrick Mahomes and that, that there's his haircut and there's his number and everything. Uh, but when you would play a college football game, it would be like QB number seven. Because you couldn't pay the athletes for use of their IP in these games. That would break amateurism. But Ed O'Bannon happened to notice that when you would play one of these college basketball games and there'd be like the old UCLA teams in there, that there'd be a gentleman. Who was the exact same height and weight as Ed O'Bannon and was as, you know, the, the same handedness as Ed O'Bannon. Played like Ed O'Bannon and even looked like Ed O'Bannon and it's

• 50:33Logan Bartlett?

  Number two.

• 50:34Speaker 00

  Same number, same haircut. Um, and, but it wasn't Ed O'Bannon and his kid was like, look dad, you're in the game. And that, and I was thinking like, well, but if I'm in the game, I should be paid for being in the game, right?

• 50:44Logan Bartlett?

  And be clear, at this time, Ed O'Bannon was an early nineties, uh, maybe late eighties basketball player. And this was, they were doing legacy teams, right? And so he was appearing in the game as a, as an adult now, but it was a version of himself way back when.

• 50:59Speaker 00

  Yeah, you know, a, a, an actual basketball game made when Ed O'Bannon was in college would have been like on the, uh, the Commodore sixty-four and it would have sucked, I bet. Like, it's just one pixel. So it's, and then he, he leaves the suit. And then over the course of discovery, turns out that, I mean, of course it was based on Ed O'Bannon and like people at EA were saying, yeah. In order for us to kind of make sense of the variables during development, like we would call Tim Tebow, Tim Tebow. And we would change him to, you know, Florida QB seven right before launch. Of course it's based after him.

• 51:29Logan Bartlett?

  And at the same time, uh, you start to be able to connect your, your computer, your, uh, system to the internet, the console. You could go on and download updated rosters that actually had the names themselves. So it also gave you the ability, day one, you plug it in, uh, you go online, you download the updated rosters and you have all the players' names in the game for you.

• 51:51Speaker 00

  Yeah. I mean, I don't, I don't know if you did this. I, I was a sicko in college. But before I got an Xbox 360 that could connect to the internet, when I was just playing on the PlayStation 2 era, what you used to be able to do is take your little memory card that you paid 25 bucks for at EB Games or whatever, and you can mail it somewhere, where somebody would manually change all the names on your memory card to the real players.

• 52:16Logan Bartlett?

  I used to hear it on eBay was where I would go do it.

• 52:18Speaker 00

  Yeah, and they'd send it back. And we would do this. And this was a cottage industry, and it became way easier, you know, come 2012, 2013, 2014 with DLC and internet capability. And that also led to the growth and the profitability of these titles. You know, you might sell 200,000 units in 2007 of a PlayStation 2 game. Now that the consoles became more developed, they became bigger, more flexible, and you could now have DLC, they might sell 1.3, 1.2. So there's a lot of money out there. And if you look and say, "Well, they're getting a lot of money to be a Madden, they're getting a lot of money to be a FIFA and NBA 2K, why am I not getting anything?" And the court system eventually

• 53:00Speaker 00

  would say, "We agree." And, you know, in my world, this is a major story. EA said, "Okay, we'll pay. That seems fair. If anything, we'll probably sell more copies if we can use the real names, if we can dispense with this ridiculous pretend." And the NCAA said, "No. If you pay them, they'll lose their eligibility." And then multiple schools, including my alma mater, Ohio State, Notre Dame, Washington, a few of the places, said, "Not only that, we don't want to be sued. We're going to pull our license." And that led to the death of the college football franchise, college basketball games, that, and that they weren't especially profitable. But we went a decade without any of those games. And that O'Bannon

• 53:41Speaker 00

  case, and the appeals afterwards, began to chip away at some of the benefit of the doubt that the NCAA enjoyed from the court system.

• 53:51Logan Bartlett?

  And I don't know if this was the first time, but in 2014 as well, Northwestern's football players tried to unionize. And so now there's more of these cracks showing up. I think ultimately that case wasn't successful, but I think more and more people are starting to recognize, like, we're essentially employees that aren't being paid.

• 54:11Speaker 00

  Yeah, the Northwestern case, it didn't work. That vote failed. And part of that was because of a huge effort from the Northwestern business community to stamp that out.

• 54:25Speaker 00

  I would say in 2014, the idea that a college football player should be an employee and treated as such was probably still considered a little radical. That was at the beginning of my reporting career and a lot of sports writers who tend to be more progressive like, I don't know if I'm ready for that. But it is clear they're being economically exploited. But that was, I think, an example of the over to window shifting dramatically between video game licensing, between that aborted situation, between rights fees for conferences exploding. And if coaches are making four and five million, which they were around this period, now they're making some of them in excess of nine and 10. It became harder to justify not paying people laundry money.

• 55:09Logan Bartlett?

  Is there anything that happens between kind of the O'Bannon case that's of note or that you would call out all the way up to Alston?

• 55:17Speaker 00

  I think in this terms, the biggest thing is you're beginning to see an awareness of athlete activism on campus. And sometimes that activism wasn't just about employment, right? Shabazz Napier, a former basketball player for UConn, the year that UConn wins the national title, go on to have a nice career in the NBA, had this viral quote talking about how he went to bed hungry, even though he was a star basketball player at a star basketball program. People are like, what are you talking about, Shabazz? You get a full athletic scholarship. He's like, yeah, but the dining hall closes at 9pm and like I get back at midnight or 1 o'clock in the morning from some of these things. And I still have to use my money to fly home to go

• 56:01Speaker 00

  see my family or all these out of pocket expenses. And yeah, there are times where we go hungry. Shortly after that, the NCAA says, all right, we're going to approve unlimited snacks. And we're going to, because enough athletes were saying, Shabazz has a point. I know that you guys may not want to believe that, but there are some real holes in what we're getting right now.

• 56:21Logan Bartlett?

  And speaking to the Overton window, I remember Arian Foster came out in 2013 and said something similar. Arian Foster, the future Texans running back, or maybe at the time, I guess Texans running back and Tennessee grad said he used to, you know, he was contemplating stealing something because he didn't have money for food in college. And I just remember the backlash from the Tennessee fan base to him saying that, what are you talking about? Why are you spitting on your school? You know, like you're now making millions, billions, the fellow, why are you calling attention to this? And makes the university look bad and all that. And I think what he said at the time, the Overton window shifted so much that flash forward six or seven years and everyone's like, yeah, well, of course, that's crazy.

• 57:04Logan Bartlett?

  Like he's generating, you know, tens and tens of millions of dollars for the school for his performance. But at the time, it was a little, you know, he's attacking something that was sacrosanct.

• 57:13Speaker 00

  You're right. And, and I think we would be neglectful if we didn't point out that in many of these cases, there's a racialized dynamic, right? With there's, there's white fan resentment. Like you already get all this social capital. You're already famous. You know, I had to pay to go to college. How dare you be so ungrateful. And, and I also, I, you know, I think a misunderstanding of what the college athletic experience is like. And, and if you are playing division one football or basketball at a premier institution, you don't have the same college experience that you and I did. You can't tell your coach, A, I'm going to go study in Italy this summer. I'll, I'll see you later. No. You, you, you have to be on campus and you have to be practicing and lifting with your team. You don't get to pick what you major in. You don't get, you have very little autonomy. You don't

• 57:58Speaker 00

  get to join the same clubs or, or work the same jobs that, that maybe we had. And, and I think a lot of the athlete advocacy during these couple of years to, to, to put that in a more human touch, eventually shifted some, some minds among reporters, among some fans, and then ultimately to the activists and lawmakers that pushed for some pretty meaningful changes.

• 58:19Logan Bartlett?

  So 2021 Alston case, can you give a little bit of a history of how this came to be? And then ultimately what the ruling was?

• 58:26Speaker 00

  Yeah, so there are beyond a scholarship and beyond some other very limited cash disbursements. There was a movement to allow universities to pay the full cost of attendance, which it might include laundry money or some other incidentals or books that might not fall under an athletic scholarship. And then there was a policy of being able to provide a level of educational awards, right? Like can we buy somebody a laptop? Or if they get really good grades, can we pay lab fees or something like this? And you had an antitrust case in Austin about whether you could, the NCAA could impose a cap on what those educational awards might be.

• 59:11Speaker 00

  And there was a judge in California said like, we can't cap it at zero, let's cap it at like 5,600 or something. And the NCAA said, no, no, no, we're going to appeal to the Supreme Court. We've won in court before talking about the student athlete experience and our ability to impose limits on athlete compensation. This will be our tool to defeat activist judges and everything, especially as the conservatives begin to take on more of the Supreme Court. And of course, in Austin, they lose nine, nothing. You have Brett Kavanaugh's famous like concurring opinion where he basically says that the entire NCAA model right now would be illegal.

• 59:49Logan Bartlett?

  I pulled it up here as we were talking, the NCAA's business model would be flatly illegal in almost any other industry in America. Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.

• 1:00:06Speaker 00

  Yep, yep.

• 1:00:07Logan Bartlett?

  Pretty scathing. And not in zero, not many, I don't know. I mean, you don't hear about too many Supreme Court cases that has such consensus these days especially.

• 1:00:19Speaker 00

  It was, it demolished everything. And it's a misnomer that this is what led to NIL. Like NIL and paying athletes for recruiting compensation or athletic labor was not part of this case, did not change the NCAA's immediate ability to regulate like other kinds of compensation. But when they got destroyed that thoroughly. One, this opened up precedent for other lower courts to consider additional antitrust claims against the NCAA, many of which went against them. And it completely changed how activists and state lawmakers looked at athlete compensation, too. And that, once they got smashed that thoroughly, stopping NIL, stopping a lot of the things

• 1:01:04Speaker 00

  that are happening now became impossible.

• 1:01:07Logan Bartlett?

  Narrowly, I guess I didn't appreciate that point. So narrowly, what did Alston allow if not name, image, and likeness? I thought it led directly to it.

• 1:01:14Speaker 00

  It really was just about the limits of educational bonus awards. Like, this allowed schools to buy laptops for people or to cut checks that are tax-free for really good grades if they wanted to opt into all of that. But once people saw that, then they realized, well, if they can't stop me from doing this, they probably can't stop me from prohibiting NIL. And then state lawmakers in California and in Florida, in particular, put enormous pressure

• 1:01:44Speaker 00

  to force the NCAA's hand, realizing that if you lost this badly in Alston, you don't want to pick another legal fight over this principle. It's better to abdicate ahead of time.

• 1:01:53Logan Bartlett?

  So name, image, and likeness really came to be, I think of it as July 21. I don't know if that's the right timing.

• 1:02:01Speaker 00

  Officially.

• 1:02:02Logan Bartlett?

  Officially, July 21. And so what did that then entail? What ultimately changed, at least by the letter of the law at that moment in time?

• 1:02:11Speaker 00

  Yeah, so it's funny. When you talk about NIL, even in the 2021 era, I would say there's really two different NIL marketplaces. By the letter of the law, we're talking about publicity rights, something that you and I enjoyed in college and that everybody, like, outside of the armed forces and some other very specific circumstances, everyone else has presumed to enjoy. You can do an endorsement deal. You can profit from somebody using your own IP for something else. Previously in college, like we talked about, you couldn't do that. You'd lose eligibility, even if that had nothing to do with your identity or performance as an athlete. So if you were, as an example, a cross-country Runner and you had a YouTube channel about gardening and you wanted to turn on monetization

• 1:02:56Speaker 00

  for that YouTube channel in 2020, you could not do that before you would lose your track. You're running eligibility, even though those two things really don't have much to do with each other. So by permitting athletes to take advantage of these deals, it allowed athletes to, you know, play guitar at a bar for money, to hold other jobs and then to sign endorsement deals to give paid instruction at camps and to participate in group licensing or individual licensing. You also have a different NIL market that I like to colloquially call the bagman market, which is essentially money laundering through corporate or partnerships or nonprofits or charities, a talent acquisition or retention fee where somebody might say, you know, this left tackle

• 1:03:41Speaker 00

  was very important to us athletically. He might have 60 Instagram followers and his posts are terrible, but we're going to pay him $100,000 to go speak at the Boys and Girls Club here. It's not because he's famous. It's not because he actually has name, image and likeness marketability rights. It's because you want to pay him to play left tackle for us. And that was something the NCAA would look at and go, whoa, whoa, whoa, whoa, whoa, that's pay for play. And the agents and economists and, and, and collectives and fans would say, try and stop me. And, and it really, they couldn't legally speaking, they've lost a couple of those fights. So you have, you have both markets.

• 1:04:18Logan Bartlett?

  Who are you to say, I'm Walmart or Tyson's Chicken and I'm in Arkansas and who are you to say what I'm paying him for? Maybe I think him doing this commercial or him stopping by the local Walmart and shaking hands. Maybe I think fair market for that, for this running back who happens to be a five star and, you know, I think can be a stud. Maybe I think that that's worth $100,000 and, and you would say, well, are you paying anyone else to shake hands to, you know, sit outside of Walmart for $100,000? And you're like, well, who are you to meddle in my business? I control marketing and I want to pay them that. And rightfully so, in some ways,

• 1:04:59Logan Bartlett?

  there's not a lot of industries outside of collective, you know, collectively bargaining. There's not a lot of industries that you could limit what people actually are able to make. If someone wants to pay him that.

• 1:05:12Speaker 00

  Yeah, there's a lot of public sector employees that do have some of these restrictions and you have to document and report outside income. But the key word there is that they're employees. As of right now, and certainly as of 2021, college athletes were not employees. And so to have a document that would have that kind of restriction would, in many cases, trigger an employment test. As we go back to what the courts have said previously, you designate somebody as an employee, which is a thing that the universities have desperately not wanted and have fought against since Dennison way back in the 50s. And that's one of the major legal tensions we have here still today.

• 1:05:51Logan Bartlett?

  And you mentioned this in passing, but the concept of collectives come to be around this time. What is a collective? What are they doing? What role are they playing?

• 1:05:58Speaker 00

  So let's go back to that Arkansas example, right? You know, in Arkansas, you could theoretically have Tyson's Chicken, or Walmart, or Dillards, or a couple of other companies that have lots of money do marketing spends to go to pay athletes.

• 1:06:12Logan Bartlett?

  No, you do it directly. The BTA marketing, brand partnerships at Walmart is saying, okay, I'll go call up this running back and say, you know, here's $100,000.

• 1:06:23Speaker 00

  Sure. Or I'll call up the associate athletic director at Arkansas, and you tell me who you need, and we'll do a deal with them. But in Arkansas, not blessed with the gigantic corporate culture, you've got five or six really big companies and some resource extraction and not a lot else. What if I am a partner at a law firm, or if I'm a dentist for a hospital, or I don't own a string of car rental places, but I'm highly employed, make a lot of money in this space, and I can't hire somebody to individually do marketing for me? Well, I can't just give somebody a check for 100 grand, but if I pay this new 501(c)(3) I established, $50,000, and I get 30 of my high-income buddies to do the same,

• 1:07:05Speaker 00

  well, then that group could sign an athlete to a marketing deal, or to set up some kind of charitable partnership or something. And that's called a collective. And I would say, think of it as a college sports super PAC. The comparisons between that and campaign finance loopholes are very apt. Is this what the spirit of the law says you should be able to do with the super PAC? No. But there's a letter of the law says you can. And so almost everybody began to do that.

• 1:07:34Logan Bartlett?

  And that starts to be the the central entity that dollars are going in. But at the time, I guess, based on state laws, there has to be arms-length relationships between the university and the entity itself. And then that starts to break down. Certain states pass laws that you can actually coordinate together. And there's also laws that the concept of inducement, where you can't you can't monetarily incentivize someone to come to your university by giving, you know, for discussions ahead of their enrollment. That is a theoretical thing that's obviously happening in practice

• 1:08:17Logan Bartlett?

  across the the university landscape. But there's there's like these distinctions that get tested in court. Or NCAA keeps pushing on thin lines, trying to wield some power, and they keep losing.

• 1:08:31Speaker 00

  There I think, again, the comparison between this and super PACs is pretty apt, right? Like, for a super PAC, there is supposed to be some independence between who's running that group and the candidate. But you and I and God all know that these are coordinated spending campaigns that that happen hand in glove with the candidate and these associated PACs. And that would happen by and large with collectives. Not always, and sometimes you'd have tension between the guy running the collective and the school. They might not like each other. They might not trust each other. But they are fundamentally working for the same principles. And then state laws would change quite a bit, particularly in the South, where football recruiting is a civic religion of some sorts.

• 1:09:14Speaker 00

  And there is a long tradition of the state being willing to put its thumb on the scale to help out old state you. And so you would see a lot of regulations change. And if Georgia changes something, well, by God, Texas and Mississippi and Alabama have to as well, even if no one's really read the law yet. You know, for a lot of these part-time lawmakers didn't really understand, I think, what they were creating. But but you did have that dynamic. And so by 2024.

• 1:09:38Speaker 00

  The functional difference between school and collective was really broken down.

• 1:09:42Logan Bartlett?

  Were you analyzing through this, like what, what the buckets between the two, the bag man, as you described in actually the true sponsorships? Do you have like a swag of, of how those dollars kind of broke down for some of these programs?

• 1:09:55Speaker 00

  Yeah, we were able to get some of this information through some of the software companies that process these deals. But I don't mind telling you, like, part of what kind of shaped my, my thinking about this was my own experience. 2021 and 2022, I did a bunch of these NIL deals. I figured, well, I run a business. I'll pay some athletes to endorse extra points, or I'll pay some athletes to be interviewed or to just share their thoughts and stories here. And I did, I did that for a wider swath of institutions. I'm an Ohio State graduate. I did pay a couple of athletes at Notre Dame and Michigan. And it wasn't because I'm secretly a gigantic fan of Notre Dame pole vaulting, or BYU cross country, or Ohio football. I looked at this and thought, I think by participating in this market, I can report about it a little bit better. And maybe I'll stumble into somebody who's a good affiliate marketer.

• 1:10:39Speaker 00

  And what I found is that none of those deals came close to, to, to breaking even financially. And what I began to see as I would reach out to other brands that did larger ad spends or engage in this world is that the value you'd get would be from the earned media announcing the campaign, not from the campaign itself. And so when the campaign no longer had a novelty factor about it, and, and, and, and every, every university was, was announcing some of these deals, there was no point in renewing. Because if you want to get into influencer marketing, it's better to hire a mom blogger or a fashion influencer, or somebody who's been doing this for a while, who understands

• 1:11:23Speaker 00

  what CPM is and campaign deliverables and has owns a ring lights and knows how to track some of this data versus a 20 year old who just happens to be good at volleyball and knows more about Call of Duty than she knows about actually doing this work. And I began to kind of see that anecdotally through many of the other, you know, people on the university side or collectives or, or brands that I talked to. There are some exceptions. There are some legitimately marketable athletes and there's the Couple of industries I think did a good job spending into this. But the the people that work in university compliance, the people that work in compliance software that process these deals. They don't tell you the same thing that that the overwhelming majority of NIL activity was centered around.

• 1:12:03Speaker 00

  Talent acquisition or retention rather than marketability and that's because they're not good, they're not, they're not. Generally speaking, 20 year olds aren't really great then dependable campaign partners.

• 1:12:16Logan Bartlett?

  Do you think it, I mean, does that equate in your mind a 95 5 does that is that 90? I mean, it sounds like the ROI was low, but in terms of the dollars themselves. Where the intention behind them was, do you have any perspective on that?

• 1:12:29Speaker 00

  I think I think we're looking at 80 85 of the total marketplace. And it's different depending on the sport. For a lot of women's sports, it's probably closer to 70 40 or 70 30. In in line of marketing and that's just because there's not as much fan demands to bribe your way into a great volleyball program. And by and large, young women tend to be better at social media from a brand marketing perspective than young men are. But on the totality of the market, which is dominated by football and basketball money, yeah, 80 85. Perhaps more are concentrated in the bag man world.

• 1:13:03Logan Bartlett?

  And then there's also the the transfer portal comes to be a thing around this time, which exacerbates all the tension that. I think was kind of a powder keg here. Can you speak a little bit about that?

• 1:13:15Speaker 00

  Sure. So when you or I have worn an undergrad and we decide that we don't really like our program or where we're going to school. Generally speaking, we could transfer to any other school that will accept us and take our credits and go. We don't owe our previous institution anything and and our old school has limited opportunity to block us. As long as we can get into the other place. And in order to to defend itself against these employee accusations or classifications. NCAA and university leaders would constantly argue in court that college athletes are college students. And should be treated like college students. Well, if that's true, then they should be able to transfer. And what used to be the case for football and men's basketball and a lot of other major

• 1:13:58Speaker 00

  sports is if you decided to transfer, you were ineligible for a year before you could go play again, which was something that athletes and their advocates and some lawmakers thought was an unfair restraint of trade and clearly demonstrated that these are not like regular college students. So eventually that rule gets rescinded and so everybody then can transfer. You can't play for more than one school in one season, but you can leave at these designated times to go wherever you want if somebody will accept you. We had something called the transfer portal, which is essentially a gigantic spreadsheet that tracks people who are looking for a new school and schools who are then looking for somebody else to fill in these gaps. So when you mix that with this growing bagman

• 1:14:42Speaker 00

  market, what you have now created is perpetual free agency and a cottage industry of agents and agencies and marketers that will try to get somebody at one school to jump into the portal and go play somewhere else for potentially more money.

• 1:14:58Logan Bartlett?

  And there's tons of brokers around these people now that are popping up acting as middlemen of who knows what. I think famously there was the example of Cam Newton and his parents and what maybe his dad knew about potential payments that were offered for him to go to Auburn. So this has always been kind of a history of who knew what and the complicit nature of behavior and all of that. But now you actually have these people that can be doing the outreach on the behalf of the student saying, hey, you know, Mr. Head Coach, I would be interested. I'm finishing up my sophomore year and I'm going to enter

• 1:15:40Logan Bartlett?

  the portal potentially in a few weeks here. Would you be interested in me? And so all this stuff is going on both ways through social media, through handlers. And so it's perpetual tampering, I guess is the term that gets used a lot, but meddling in other people's rosters.

• 1:15:56Speaker 00

  Yes, and I think there's an important distinction and the example of Cam Newton, I think, is particularly apt, right? If we're talking about, say, the NFL. Just about everybody in the NFL has an agent who helps negotiate salaries, helps procure and negotiate and set up licensing deals and sponsorship opportunities and everything else. If you want to represent somebody in the NFL as an agent, you have to be certified by the NFL Players Association. And that generally requires you to have a graduate degree or a law degree, some element of professional experience with negotiations, passing an ethics exam, or in some way certifying that you are a competent professional. Same thing's true with

• 1:16:37Speaker 00

  the NBA, Major League Baseball, most other major sports. But there's no union in college athletics because they're not employees and they've never organized or sought for one of those things. And most of the laws on the books that regulate sports agencies at the state level or the federal level have no enforcement mechanism kicked in. So there's basically, there are not really any rules. So what that means in practice, Logan, is that you and I could hang up the phone when we're done with this conversation, change our LinkedIn bios and become college athlete NIL agents today. There's no form we have to fill out and I don't have to go register with any Secretary of State. I don't have to prove that my, you know, I know my butt from the hole in the ground. I can be that. Which means that the handlers that we talked about a lot in the 70s,

• 1:17:19Speaker 00

  80s, 90s, 2000s, they're sometimes referred to as uncles in the college sports world, right? Now they're agents. And now, as agents, they could say, you gotta give me 20% of what you're getting. And especially because in the pros, you might only get 3% of a salary. There's no salaries in this world. They're all marketing deals, even if they're actually salaries. So the agent could charge a much higher percentage. So now, you have an incentive from the handlers to get people to transfer as much as possible. Because they probably can't legally represent them in the pros, but they could get paid every time someone hits the portal. And so you have a lot of economic incentives to push for constant turnover.

• 1:17:58Logan Bartlett?

  And because these aren't contracts and they technically can't be paid a play in nature, I guess maybe they're contracts for their marketing contracts. There's no enforceability around, you can't have incentives for performance at all. There's no, hey, you must, you know, appear in these number of games or whatever to get this. And so you have this perverse incentive structure at. Play where people constantly want to renegotiate, constantly want to transfer. And there's not a ton of recruitment or capability that the people paying ultimately

• 1:18:40Logan Bartlett?

  have around if it's this bag man incentive structure that play. It's it's tough luck. If the, you know, whatever, the person doesn't want to do what you want them to do.

• 1:18:52Speaker 00

  There's, there's a lot of truth to that. There's a couple of ways that that more savvy organizations to try to protect themselves. They might say like, you still have to be a university, a student in good standing at this school or for your, your marketing make goods, they have to be done in this zip code. And so if you transfer to a different state, are you going to go drag your butt every July 1st to come here and go cut an ad even though you're, you're playing in Oklahoma or like probably not, but you can't really protect yourself if they suck or if they get hurt. Only if they get a DUI or if they somehow get suspended from the school. And so, and so that did, that did happen. And it was, that's part of the reason why there's some donor fatigue in, in this world.

• 1:19:32Speaker 00

  Because not only do you, our donors ask to pay more to support this, this, this, this, this ecosystem, there's a lot of dead money floating around.

• 1:19:44Logan Bartlett?

  It's kind of the heads I win, tails I lose thing where if you have a five star recruit coming in as a freshman and you gave them a certain amount in their first year, that's, and let's say it's a three year contract or whatever it is, that's the minimum you're paying them because if they perform really well, they're coming back and renegotiating with you for more money. If they don't perform well, then they're going to keep taking what they gave that you agreed to early on. And so it's this, it's this weird thing that the contract you sign in the NBA or the NFL or whatever other organization, there's some enforcement of fulfilling the job that you signed up for. And this, it's, it's, that's, that's a minimum you're sort of agreeing to.

• 1:20:29Logan Bartlett?

  And then if you outperform it, you better bet that they're coming back and ask you for more or going to a different school to try to get it. That's

• 1:20:36Speaker 00

  Definitely a part of it, but I would say that risk really does run both ways. Right. Because if you sign, if you sign up and say, okay, the collective is going to pay me X, Y, or Z. Then that collective goes bankrupt.

• 1:20:47Speaker 00

  You're often SOL. We've had a lot of examples publicly of people saying, I did not get what I was promised. Because the, you know, the organization folded with somebody else. I've had a couple of A Ds tell me, and I haven't publicized these examples that are like, our, our collective was funded by two guys since they found themselves not as liquid as they were before. And so all the payments came in late. This happens and you don't have a meaningful recourse. So over the last couple of years, I would say there is a meaningful consumer protection angle and a buyer protection angle. Because there's, you know, there's no FDIC of the bagman world, right? Like this, this is all existing outside of traditional support infrastructure.

• 1:21:26Logan Bartlett?

  The Messis example, I guess, was the Jaden Rashada example in Florida, where a high school senior enrolled at the University of Florida under, I guess, did he ever actually enroll?

• 1:21:38Speaker 00

  He was there for like three days.

• 1:21:39Logan Bartlett?

  Yeah. Okay. Showed up on campus under the pretense that he was going to get some amount of money. And there was a lot of finger pointing about who signed off on the amount of money and what the deal actually was. And so ultimately he withdrew from the school and, and with Arizona State subsequent to that. For, for, I think, I mean, the numbers that were reported was he signed a, I think a $13 million deal on the way into Florida. And then at Arizona State, I think he got a couple under grand at, at max. So it was.

• 1:22:10Speaker 00

  If, if that, and then he leaves Arizona State after one year for Georgia, he's left Georgia. He's currently still suing Florida. I want to say he's now, I think, like Western Kentucky.

• 1:22:18Logan Bartlett?

  Yeah.

• 1:22:19Speaker 00

  Or, or.

• 1:22:20Logan Bartlett?

  Just add story of, of, you know, I mean, some probably dad advice, some miscommunication and probably some malice on, you know, the participants side of things.

• 1:22:29Speaker 00

  This, this happens, I would, I would not say this is frequent, but it does happen. And it happens more than, than ultimately gets reported. Generally not, the numbers generally aren't as big as they were for Jaden Rashada, who is a top five quarterback recruit in that class, but it does happen every year.

• 1:22:48Logan Bartlett?

  And so as we move forward to today and start looking to this future, so we're coming up on universities themselves actually getting involved in paying student athletes. So how did that come to be? How is that playing out in Congress? And I guess what are the derivative implications for that?

• 1:23:11Speaker 00

  Yeah, so we should probably talk about the house settlement then here real quick. So over the last couple of years, there were multiple antitrust lawsuits filed among different classes of athletes against the NCAA. Some of them were wanting damages for missing out on NIL opportunities because they played before 2021. Some were complaining about missing out on abilities to monetize NIL associated with broadcast deals for playing on TV. And then for the NCAA continuing to artificially limit what they might be able to earn. And these cases were combined. It's called House v. NCAA after a swimmer at Arizona State, but there were lots of other athletes involved.

• 1:23:53Speaker 00

  And the power conferences and the NCAA negotiated a settlement that would have paid back damages north of $1 billion and would allow universities to pay up to, I think the cap is like $20.5 million for this year, will grow from there, directly to athletes to essentially say, I'm going to buy your NIL rights. I'm going to pay you $200,000 if you're playing basketball at my school and I can use you in billboards and I can use you in radio ads or something, but I'm going to pay you, rather than, you know, Bob Chevrolet in Mesa, Arizona necessarily going to pay you. Now, this settlement has not been completely finalized yet. There was a hearing on April 7th. It's likely to be finalized this month.

• 1:24:37Speaker 00

  Universities are acting like it's going to be finalized and they'll be paying outwards. They wanted to do it because if this goes to court. And the NCAA loses and they have to pay treble damages. It will literally bankrupt the NCAA. We will be looking at damages north of $5, $6 billion. Nobody can afford to pay that and that's, that's the end of the game. So the, the hope here is to let some steam, you know, uh, out of the kettle a little bit. We gain some control over this ecosystem, pay some back damages to previous athletes. And then the hope is from the NCAA and power conferences that they can get Congress to give them a limited antitrust exemption to allow this to function essentially as a collective bargaining agreement.

• 1:25:21Speaker 00

  Because if they don't, someone else is going to sue them three days after the settlement is approved and, and you're, you're right back at square one.

• 1:25:28Logan Bartlett?

  And so the implications for that then, there's, there's this $20 million that I think, is it in July that it's supposed to?

• 1:25:34Speaker 00

  July, July 1, assuming this is approved this month.

• 1:25:38Logan Bartlett?

  And, and, and so the way that that will play out is, uh, each school theoretically, but ultimately each conference gets their, uh, gets to decide how they're going to allocate those dollars. And it's 20 million, is it across, like, who does that include?

• 1:25:54Speaker 00

  It includes everybody, not just the football team. It's your whole athletic department.

• 1:25:59Logan Bartlett?

  Sure, but school lies. Is that just football programs or is it all 350 programs?

• 1:26:04Speaker 00

  No, well, it's so, everybody that's up in a, one of the power leagues is mandated to opt in. Everybody else in division one can opt in if they want to. And so what you're seeing from a lot of the schools that don't have football is they'll say, we're going to opt in. We don't have to pay $20 million. We could pay four and we're just going to, we're going to spread that smaller amount of money among a, a smaller amount of athletes.

• 1:26:25Logan Bartlett?

  There are some schools, yeah. We're going to opt in and we'll pay, we'll pay eight to basketball only, uh, which for the other schools that have a football program, there's kind of this allocation decision of how do you split the pie? And I, I guess as you think about like the revenue, we sort of talked about, uh, high level, the different components and the profit associated with it. But revenue generation, do you have a rough back of the envelope of how the school kind of break down?

• 1:26:53Speaker 00

  So, uh, actually I think this is a It's a fascinating conversation because the motivations really do vary a lot from school to school. There is a kind of rough back of the napkin formula that a lot of power schools are using, which is we're going to do roughly 75% for football, roughly 15% for men's basketball, roughly five for women's basketball, and five for everything else.

• 1:27:16Logan Bartlett?

  Which generally tracks, as I understand, directionally, that that's the revenue split-ish.

• 1:27:24Speaker 00

  Yeah, ish, yeah. But I'll give you an example, you know, not far from my neck of the woods, right? University of Wisconsin does not have a women's basketball tradition of note. And they're in a very, very competitive women's basketball conference. However, Wisconsin has a dynamite women's volleyball program. Will compete for national titles, sells 9,000 tickets plus, is, it will be on Fox, it will be on FS1, it'll be on linear television, very big deal. They're also the current defending national champions in women's hockey. And they've been a top two, top three program for the last five, six years. That's very important to Wisconsin as a school. So you look at this and think, maybe I give my women's

• 1:28:09Speaker 00

  team, my women's basketball team, almost nothing. Because I could give them 5% and they'll still get turned into hamburger by Iowa, Ohio State, Indiana, and UCLA. But I could take that money where it could go further towards my championship aspirations in volleyball or hockey. Iowa has a wrestling program that is, generates revenue, that's on pay-per-view, that's on linear television, wins national championships, and is a culturally very important thing there. Iowa's going to have to spend a million bucks on men's wrestling if they want to be successful. And I think another kind of, you know, Moneyball angle to all this would be some schools out in, say, the Big West. Your UC Urbines, your

• 1:28:50Speaker 00

  Riverside's, your Long Beach States. And these schools have basketball. And sometimes they're okay. Every once in a while, they win a tournament game, but you're not, you're not likely to make the Sweet 16 out of the Big West. But they have great college baseball. They host regionals. In our lifetime, Big West teams have won national titles in baseball. Do I expect Long Beach or Fullerton or Santa Barbara to have a bigger baseball budget than Penn State or Ohio State, whose baseball sucks ass because it's winter until like late May here in the Midwest? Yeah, so you have this written out in pencil, but every school has to then figure out beyond, do I have the infrastructure to pay this to the right people? But how do I move it around?

• 1:29:35Logan Bartlett?

  Yeah, the SEC is mandating, I think. I think they all agreed to a certain split as I understood it, but or maybe not, maybe I'm wrong.

• 1:29:44Speaker 00

  As I understood it, what the SEC said was, we're all going to offer the same number of football scholarships. You can offer up to 105. For this year, they're all going to stay at 85, and I expect very, very few schools to go to 105. But the SEC schools also offer different sports. And so some, like LSU, for example, might decide we're going to spend more on women's gymnastics. Arkansas will probably spend a little bit more on baseball. Who knows what Vanderbilt's going to do, right? And it'll move around a little bit, and there will be marketing dollars and stuff outside the cap to fill in some of those gaps. I don't think this is going to look exactly the same everywhere, but I can't imagine anybody, certainly in the Power Four, saying, we're only going to give 20% to football. There's just too many people on the roster.

• 1:30:28Speaker 00

  Like, you have to allocate a disproportionate amount of your salary cap because you got to pay 85 guys.

• 1:30:34Logan Bartlett?

  And how does the bagman world play into this as you sort of look forward? And there's the concept of an NCAA clearinghouse. Like, how do you think that world ends up evolving?

• 1:30:48Speaker 00

  Logan, it's a great question, and here's my honest to God answer. Anybody who tells you they know exactly how it's going to work is trying to sell you software. We don't really know. We know that there is a clearinghouse that's going to be administered by Deloitte, and that's empowered by the major conferences that's supposed to track every single NIL deal over $600, make sure it lines up with fair market value, and potentially invalidate deals that do not.

• 1:31:15Logan Bartlett?

  Give this specific example we talked about, there's a $20 million pool. That's getting broken up however we decide through the university directly. And university needs to come up with ways of paying that. Theoretically, they should be able to do it because they have television rights. And there are some people are putting logos on fields and whatever. There's a bunch of different ways to get that. Then there's this true marketing, but that's essentially a pay to play plus or minus. And I think at an individual level, the schools get to allocate that both within the sports, but then within the players as they.

• 1:31:43Speaker 00

  However, they want. There's no, no fair market value analysis for anything that comes directly from the school.

• 1:31:49Logan Bartlett?

  The quarterback will probably end up making, you know, whatever 50% or 30% or something akin to the NFL, maybe who knows how that's going to end up playing out, at least within the football. But though people will make different decisions there. Then there's still this concept of traditional name, image and likeness deals. And the actual marketing rights, if people have ever seen Heisman House or Dr. Pepper commercial or whatever those things are. And the enforcement of this is going through this Deloitte Clearinghouse entity, which theoretically will go back to Tyson's Chicken or Walmart and say, "Hey, you know, you signed here for $100,000 for this running back to show up and shake hands and kiss babies, and that's not fair market value based on his social media followers."

• 1:32:33Logan Bartlett?

  And we're sort of back to limiting the earning potential of an individual in some ways here.

• 1:32:41Speaker 00

  That's right. So here, so here's the question. On one hand, what you described, I imagine the second that Clearinghouse goes to Walmart and says, "Hey, couldn't help but notice you paid Bruno Mars $90,000 to give a concert, and you're paying $125,000 for this running back to sign autographs." Like, I call BS. As soon as they flag that deal, there's a lawsuit. And it's entirely possible that a judge will say, "Yeah, that is an unfair restraint of trade." Like, there's, there's no CBA here. Throw this whole thing out. Or Congress might say, "It's okay." And they might, they might basically turn that house settlement. Into federal law, Congress could pass a law that says, I don't care what the court

• 1:33:22Speaker 00

  system says, college athletes aren't employees and the NCAA doesn't enforce this stuff. Now the Federal Trade Commission does. And the NCAA has been asking for that for a couple of years. It wasn't possible in split Congress, but Republicans control everything now. And I don't think I'm being particularly partisan when I say this particular Congress, not big fans of organized labor, not big fans of parliamentary procedure. So if the White House says this is a priority, or if Ted Cruz says this is a priority, that could really happen. And then the clearinghouse is empowered somewhat by the federal regulatory state and it becomes a thing. We really don't know. I think that adds to some of the frustration of risk management here on behalf of schools or agents or anybody else. Whatever the rules

• 1:34:07Speaker 00

  are now might not necessarily be the rules in four or five months. It would be like trying to run a business where you're doing import and exporting out of Vietnam right now. I don't know what the rules are going to be.

• 1:34:16Logan Bartlett?

  And in looking forward to that, I mean, there's the decisions on how much the players are going to make. And you have, you still have examples of there's this $20 million pool, but XYZ person who makes, is worth a couple billion dollars. If they want to pay to have the best running mat on the team, it's still back to this concept of who is the NCAA from an enforcement body to limit this. And as you're making these decisions or recruiting these players, as we sit here in equal of 2025, you're, people are promising deals under some mix, some people are totally by the letter of the law saying, hey, we're

• 1:34:59Logan Bartlett?

  going to pay out exactly those $20 million and then what we can actually get to in terms of true marketing deals as well. And you know, some people, Phil Knight at Oregon, are saying, who are you to tell me what Nike can spend on these players? And they're

• 1:35:18Logan Bartlett?

  Saying, well, that $20 million number is great, but here's another 10, 50, $20 million on top of this to, you know, fulfill the rest of the roster. And so we're sort of headed to this, and who knows on the playoff, maybe these players will be ruled ineligible, maybe there'll be stale payments that end up coming through. It's just, we're sort of back to, in some ways, the opacity of the grayness that we had over the last couple of years, at least, uh, the chaos was free market. And now we're sort of heading back to some more control, but there's going to be weird distortions that end up playing out.

• 1:35:54Speaker 00

  I think, I think that's exactly it. We, we've shifted to post Soviet economy, right? Where it's, there's some of it's planned, some of it, it depends what the state ends, ends up doing, uh, a lot, a lot of uncertainty. And, you know, I joke, I didn't have some of this gray hair when I started to go getting on this beat. And, and half of what I do is, I'm talking athletic directors or coaches, I joke that part of what I do is, is be as, serve as an unlicensed therapist. We all will turn off the recorder and if you don't, if you want to just yell for an hour because you're trying to make policy when you have no idea what the regulatory rules are going to be, it's very frustrating. And, and I think people that have covered other industries where that, that's been the case are frustrating. That, that's where we are in college sports right now.

• 1:36:33Logan Bartlett?

  Are we heading to a world of, um, athletes no longer being students in your mind?

• 1:36:42Speaker 00

  I don't think that's as likely, but I, I, I don't think it's an impossibility. You know, at, at some point, we all kind of have to sit and be really honest with ourselves about what are the red lines that make college sports, college sports and a fundamentally different product from, from the NFL. And for, and, and for a while, you would hear people say like, no, it's, it's because they're playing for the love of the game or for all state U rah rah, rather, rather than, than for money. And now they're playing for money and people still seem to like college football just fine. I don't know if, if they, if they're no longer students at any level, if that changes things. Or Florida State becomes, you know, the, the Florida State football club as part of this Black Rock sponsored super

• 1:37:27Speaker 00

  league that just pays a licensing fee to Florida State University for the IP and playing at Bill Campbell. I don't know. Maybe fans won't care. Maybe that becomes a, a red line. And if we evaluate the football and just like a pure quality of product, they'll find it inferior to the NFL and, and you, you have a decline. I don't think anybody knows the answer to these questions.

• 1:37:47Logan Bartlett?

  The other one that I mean is an obvious one that keeps coming up is like there's there's eligibility limitations or a number of years that you get to play on a given team. And traditionally it was four and then it became four plus one and then it became, yeah, some of the COVID years and then you end up with some injury exceptions and medical red shirts and all that stuff. And you can make a very easy intellectual argument that like, hey, Diego Pavia, the quarterback of Vanderbilt this past year is a probably objectively 85, 10 quarterback who happens to be a very good college quarterback, but has no potential to go in the pros. And so he can come back and make a million dollars

• 1:38:32Logan Bartlett?

  a year playing at Vanderbilt and running around and helping them win games. And who's to say that he shouldn't be allowed to play when he's 24, 25, 26, 27, 28, 29? Like, where is the bright line of what we're talking about here? Because you literally are limiting his earning potential by saying, hey, you can no longer play college football.

• 1:38:58Speaker 00

  Yeah. And, and, and the past, the courts would say that there's some pro competitive benefit for having some of these eligibility rules and would give the NCAA some deference. That's been shipped away a little bit. You know, part of Diego specifically, his argument is, you know, I played part of my career in Juco. That's not even an NCAA thing. Nothing else. Just don't count that year. Just like, you know, we wouldn't count playing at like Oak Park or like a military prep school or something necessarily.

• 1:39:25Logan Bartlett?

  Prep school or something like that, yeah.

• 1:39:26Speaker 00

  Yeah. And then it's okay, we're going to do that. What about Division two? Where, you know, I had to paint the lines on the baseball diamond before I got to go play. And that's, that's clearly not the same thing. I can't predict what a future judge would say, but, but what your argument here is not dissimilar from what many of those athletes are saying, where they, this is the peak of their earning potential and you might be missing out on hundreds of thousands of dollars. The way you solve this, or one way that I'm aware of that you can solve this, I'm a reporter, I'm not a labor attorney, but the, the most common way is through a CBA. Like the NBA has, the NFL has, that's why you have age limits and eligibility standards and everything, but then you need to be able to negotiate. And if you want to have that kind of protection and that antitrust exemption for college, you need federal legislation,

• 1:40:11Speaker 00

  either that allows them to unionize, or that doesn't allow them to unionize, but gives you the benefit of a CBA one way or the other. Whether they get that, or whether this particular crop of lawmakers are up to the task of doing that, I think is an open question, because I don't think I'm going to be accused of being too partisan here, if I admit this. The kind of people we have in the Senate right now are not typically the kind of people that live and die with Tennessee football. They are not single-issue voters that are responsive here. This is not an industry that by and large, with some exceptions, that they really care about that much, which can make for some bad policy.

• 1:40:49Logan Bartlett?

  And so, do you have any idea, I mean, does it feel like we're on the precipice of something in the next couple of years, we're moving to the more widespread antitrust exemption with CBA? Like, if you were forced to pick a timeline, in my mind at least, I don't know if you agree, like, that feels like the only solve for the sport to have some guardrails and some agreement. Otherwise, it's going to keep getting legislated in different state courts, and, you know, it's going to keep bubbling up with X, Y, Z thing. And ultimately, as I think people are well aware, there's 50 states who don't necessarily agree on different laws. And so now you have different

• 1:41:32Logan Bartlett?

  conferences across the country with different political leaders and different political environments. And so, it's pretty hard to keep everyone marching to the same drum. And so, I guess, one, do you have a timeline of thinking about when something like this could happen? And two, do you think that this is the only solve ultimately, and we're kind of putting a Band-Aid on the bullet hole until we get there?

• 1:41:53Speaker 00

  Yeah, I differ from some of my colleagues in that

• 1:41:58Speaker 00

  I actually think the single most likely outcome is in the next 18 months, Congress gives the NCAA a limited and conditional antitrust exemption. I actually don't think that's the best policy. I think that that will end up hurting economic prospects for a lot of elite athletes. But Ted Cruz is in charge and this is something that's really important to him. Ted Cruz is literally in charge? Ted Cruz is the ranking member of the Senate Commerce Committee that will be taking the lead on drafting this kind of legislation and getting it down to the House. And he has flat out said, I do not think athletes should be employees. I am using my intellectual gifts and energy to get very deeply involved in this issue,

• 1:42:41Speaker 00

  which he has and wants to provide the best, the most success for the highest number of people, which like in his view and his staff's view, is a conditional limited antitrust exemption. He has Republican lawmakers who would love to go back to 1983, probably in a lot of different ways, but particularly on college athletics, right? And you had a lot of Democratic lawmakers who were really adamant about allowing for employee status and that's softening a little bit. I could be wrong, right? The House is, has a, what, three seat Republican majority right now? And depending on who's dead or who's traveling or who's sick or something, or it's difficult to corral that group into doing anything.

• 1:43:24Speaker 00

  If that, if the House and Senate and this White House don't pass an antitrust exemption, then in the next 18 months, I believe we will see a federal court, probably in Pennsylvania and the Johnson v NCAA case rule, that some college athletes should be employees. And if not then, after this House settlement, when they're clearly getting million dollar checks from the universities to provide labor, it will be harder to say that they're contractors or that they are employees. So either, yeah, whether Congress is proactive one way or the other, or the courts make this decision for them, you can't keep kicking the can down the road forever. Like eventually somebody's going to force the issue. Do you think?

• 1:44:07Logan Bartlett?

  We head to a world of breaking off in some way at some point either with super conference for college football, maybe. I guess there's different considerations for NCAA basketball because of the tournament. But what's your perspective on that?

• 1:44:26Speaker 00

  You know, I think it's possible. I'm not ready to say it's inevitable or even the most likely outcome. And I think part of that is we've now had a couple of private equity groups and institutional investors kind of kick the tires on this. And I've listened to some of their pitches and I've foiled some of their pitches and read those. But part of the challenge is if you're going to make this kind of investment into a super league or to buy a chunk of the assets of an athletic department, you're doing this to make money. Unless you're the Saudis, when you're doing it for sports washing, and then it's pretty hard to buy a US state asset the same way. But if you're BlackRock or somebody, you're trying to make money doing this. And then when you look at the actual balance sheet of some of these athletic departments and you really look at the real numbers and you go, oh my God, this is worse than I thought.

• 1:45:12Speaker 00

  And then can I flip this? What's the liquidity of this kind of investment? Who can I sell this to? Because you can't buy 15% of Florida State football. You could buy 15% of a new LLC that Florida State spins off that contains its media and ticket and sponsorship assets. And that can get complicated. I think the intellectual idea of institutional investors fronting a super league and then actually doing it are two different things. If I was an institutional investor and I was interested in getting into the sports market, I would think that buying a fractional share of an NBA team or potentially doing this for the NFL, once that becomes allowed, or European soccer, where American investors have flooded over the past couple of years.

• 1:45:57Speaker 00

  I think that's an easier investment than trying to force the issue in college sports. Could it happen eventually? Sure, could happen eventually. I know the American Athletic has been very aggressive in trying to lock down institutional funding and splitting off a share of their assets. And maybe that's where things go. I think that that That raises a lot of operational concerns for college sports. But they've done dumb things before.

• 1:46:25Logan Bartlett?

  I found that what can be sold off and collateralized in some way ultimately will will find a way.

• 1:46:33Speaker 00

  At least once. Yeah.

• 1:46:35Logan Bartlett?

  Yeah. And it seems crazy to me that you would buy into the annuity that is, you know, Florida State's TV rights deals. But in some ways, they have a unique set of circumstances that they want out of their conference and, and, you know, they have a bunch of, it's not dissimilar to a SaaS contract in some ways. They have long-term locked-in contract. And if they can take 90 cents on the dollar, 80 cents on the dollar today versus waiting for it to pay out over the course of the next 10 years. They might be willing to do it.

• 1:47:09Speaker 00

  Yeah. And because the specific to Florida State, and which might be different from a SaaS investment, maybe not, you know that better than I would. But it might be a 40-year deal. In 40 years, the president of that school's gone. The athletic director is gone. All of the coaches are fired. Anybody that had any semblance of crafting the deal on the university side is gone. The people on the other end, they're still there. And you might get all the glory for cutting the ribbons and doing the SCC press conference. And then you bounce and then your predecessor sits in there and realizes like, oh my God, what have I done? And, you know, I think about this a lot because in Chicago, we did this with our parking meters where we sold everything for like a 99-year lease to the, to the UAE.

• 1:47:51Speaker 00

  And then once we spent the upfront money and now we're stuck forever. And, and, and you can't close down the street or if you do street parking, it goes to somebody in a foreign country. Or we have that with toll roads. Didn't stop the lawmakers in the beginning. Might not stop Florida State now.

• 1:48:07Logan Bartlett?

  Anything else that you're thinking about right now that we didn't hit on?

• 1:48:11Speaker 00

  Yeah. I think, I think we got to a lot over the, over the last two hours, right? Like this is, I would say it can be frustrating if you're in this industry or if you're reporting on it and covering it because things change so much. And because the financial and accounting rules are very different from some of the other industries that, that, that you might be familiar with, you might be covering. But. Like with anything else, when there's a lot of chaos or changes, there's also some potential opportunities. I think in the investing world, there's a lot of people that are now trying to create software to help schools navigate some of these specific problems. If you're an investor or a developer or a company that can help with revenue generation,

• 1:48:52Speaker 00

  that can help with customer data, that can help with front or back office player evaluation solutions, many of the kind of things that everybody in the NFL has been doing to make money for the last 20 years are still completely novel to the college world, which is kind of still run like a mom and pop shop. So it could be very frustrating to be an AD right now, but it might be a very good time to be in, say, the ticket sale software solution world. And maybe some people from outside of college sports can help fix some of these problems. Well, Matt, thanks for doing this. This was a lot of fun. It was my pleasure. Thanks for having me.