Yuma Sun e-Edition

College athletics sees a surge in nonprofits paying players

BY JIM VERTUNO AND PAT EATON-ROBB

The new world of college athletes getting paid for endorsements has created a rapidly expanding popup industry: Brand new nonprofit “collectives” that pay athletes to promote charities.

The collectives are pitched as feel-good partnerships, but they also raise questions. Is their mission to support charities and their communities or do they exist primarily to funnel money to athletes – in some cases tens of thousands of dollars – and give a school’s donors a tasty tax break?

“That’s the ultimate question,” said Brian Mittendorf, an Ohio State accounting professor with a focus on nonprofits. His school is one of dozens across the country with affiliated nonprofit collectives setting up athletes with deals to work with charities.

“We are certainly in gray areas about it. Is this existing to benefit the public through a charity, or is it existing to benefit the athletes?” Mittendorf said. “My default on this is skepticism.”

There’s enough skepticism that a bipartisan effort in Congress has been started to try to limit the tax deductions that would be available to those bankrolling nonprofit NIL collectives. A bill filed this week by Sens. John Thune, a South Dakota Republican, and Ben Cardin, a Maryland Democrat, would eliminate the tax deduction for individuals and for specific contributions that are then paid to athletes for name, image and likeness deals.

Thune and Cardin said they don’t want to prevent athletes from signing socalled NIL deals.

“We also have an obligation to protect taxpayer funds, which means that charitable deductions should be reserved for charitable activities,” Cardin said. “Purposefully blurring the line between private expenses and charitable contributions dilutes both these efforts.”

The new entities often exist right next to for-profit collectives that pool money to align athletes with business deals and offer contributor perks such as VIP-level access to athletes.

The number of nonprofits supporting athletes appears to growing, with at least two dozen in place and more launching on an almost weekly basis. They were born out of the massive change that hit college sports in 2021 when athletes were allowed to earn money in ways that had been prohibited for decades.

Among the first was Horns With Heart, a nonprofit set up for offensive linemen at the University of Texas. It launched in December 2021 just before the national signing day for football recruits as coach Steve Sarkisian was trying to land a highly-rated recruiting class.

Horns With Heart caused an immediate uproar with a promise of $50,000 per year for each scholarship offensive lineman. Critics said it pushed the boundaries of the NCAA’s ban on “play for pay” deals, but it was just the start. By April, Texas rival Oklahoma had the 1Oklahoma nonprofit promising Sooners football players up to $50,000 a year for work supporting charities. Horns With Heart founder Rob Blair said there’s no gray area about the mission at his organization: Help players cash in and help charities tap into local star power to raise their profile.

“Our intention throughout,” Blair said, “was to accomplish both tasks.”

Horns With Heart now has every Longhorns offensive lineman signed to their first $50,000, Blair said. The work they’re expected to do for charities can include social media promotions, in-person appearances at events and public service announcements.

The group has announced partnerships with a children’s hospital, a support group for active military and veterans, football camps and a foundation run by former Longhorns and NFL linebacker Derrick Johnson to remodel and update school libraries.

“In life, everyone is searching for win-win scenarios,” Blair said. “We want to show the world that NIL can be utilized to make a true positive impact for everyone.”

Blake Lawrence, chief executive of Opendorse, a company that partners with dozens of schools to help initiate, track and monitor NIL deals, noted that boosters are used to getting tax dedications for their donations to athletic department foundations. Many, he said, have made it clear they won’t be switching that money to NIL collectives without a similar return on investment.

Sun Sport

en-us

2022-10-02T07:00:00.0000000Z

2022-10-02T07:00:00.0000000Z

https://yumasun.pressreader.com/article/281951726701950

Alberta Newspaper Group