The world of college athletics changed forever when the US supreme court ruled in a unanimous decision in 2021 that college athletes could not be restricted from earning income off of their own name, image and likeness. The ruling came after a 2019 district court ruled the same, meaning several states were prepared with varying laws of their own about just what is allowed.
It should have meant that the NCAA had two years to prepare their own set of rules and restrictions with guidance for universities and all sorts of guardrails in place to protect student athletes and institutions alike. Instead, there is none of that. The ruling body that is the NCAA has been so focused on trying to fight name, image and likeness (NIL) that it made virtually no efforts to be prepared for the reality we now have. The result has been the wild, wild west.
The only real rules that exist under the current framework nationally are that schools themselves cannot pay (or coordinate pay) to players and that players cannot have their pay tied to play. What, exactly, does that mean? Well, it's still very murky water, but the apparent jest of it is the NCAA views it as against the rules to pay a player in exchange for them committing to a school or for set metrics in terms of on field/court performance and that the schools themselves cannot be involved in any way shape or form with the payments.
In practicality, there are no rules. Almost instantaneously, we saw schools which have been rumored to be paying recruits and players for decades launching major collectives that were handing out six and seven figure paydays to the top high school prospects in the country, as well as top players already on campus.
“Y’all getting a lot of money from the people behind these suites if you decide to come play here”— RedditCFB (@RedditCFB) June 30, 2022
But Jimbo was highly offended when Saban said they bought their class pic.twitter.com/z456YcnNIS
The transfer portal, particularly for men's basketball, has been littered with athletes reportedly receiving upwards of $500,000 and a luxury car from groups in cities where the strings attached typically involve doing charity work or autograph signings, etc. in a specific college town.
And there's your first loophole. Players can't have their pay tied to attending a certain school, but if you are being paid $500,000 to sign autographs in College Station, Texas, you certainly aren't going to be attending Alabama or Iowa or Oregon while you do that. It's just not feasible.
The second major loophole of sorts is the general lack of clarity when it comes to university involvement. It's very clear schools are not allowed to share any of their revenues with players, which is both quite convenient for the schools and largely at odds with the intent of the court ruling. Schools in the Big Ten, for instance, are set to roughly double their annual media rights revenues on the back of its new deal beginning in 2024, but the players aren't allowed to see any of that. Ditto the big per seat donation requirements to go watch said players, or even to buy a university-issued jersey featuring their number.
But where is the line? Most of those collectives that sprinted out of the gate had little issue finding a nice lengthy list of high dollar donors willing to contribute to a newly minted collective. Did they print that list out of thin air or did the university and its decades old fundraising arm provide what they had? And what happens if some head coach raking in several million dollars a year decides to donate that $200,000 pay raise they received last year to the collective to help reel in the top recruit they want?
It's not clear.
What is clear is that college athletics has changed forever. Whether you like it or not, schools are going to have to be competitive in NIL if they want to be competitive on the field or court.
What it Means for Iowa
Whether the NCAA decides to actually impose some semblance of order and enforce the few clear rules that do exist, it’s not likely that Iowa comes even close to toeing the line. Not under any of the current administration.
But for the two major revenue sports, it’s not clear they need to. Iowa football, for example, has been competitive virtually every one of Kirk Ferentz’s 23 seasons in Iowa City. Rarely have the Hawkeyes achieved their on-field success with a roster full of high end recruits. Only twice have they even put together a top-25 recruiting class nationally according to Rivals. So missing out on 5-star QBs commanding $2M or more isn’t going to be anything new.
What is new is the talent the staff has always targeted now being wooed by other, sometimes less notable, programs willing to hand out NIL money for 3- and 4-star prospects they view as key. To fend off such threats, the Hawkeyes merely need to be competitive. That means having opportunities available to athletes that total in the tens of thousands of dollars a year range for most and a largely pool to tap for bigger names with real earning potential via sponsorships.
On the hardwood, things are a bit more cut throat. One player on a 120 person roster can have an impact in football, but one key player among 13 scholarship athletes is make or break in basketball. Perhaps that’s why we’ve seen what was already a burgeoning transfer portal transform into an online marketplace for some schools to buy the player they need to make the next step forward in the offseason.
If Iowa wants to get over the hump, they will need to be playing in that sand box. Historically, head coach Fran McCaffery has cooled quickly on prep prospects who have their hands out and has notoriously finished second to bigger name programs throughout his tenure. But recent success from National Player of the year Luka Garza and lottery pick Keegan Murray has seen Iowa’s profile among prospects jump forward.
Now McCaffery and his staff need to be able to compete in the portal. That means needing a minimum of $500,000 set aside by someone outside the program to offer big name transfer players if Iowa wants to take that next step and compete for a Big Ten regular season championship instead of a tournament championship.
Where the Hawkeyes Stand
The good news for Iowa fans is that despite a slow start compared to some programs, the Hawkeyes are off the ground and moving in the right direct. There are already two collectives in place, each offering something slightly different and each with a slightly different vision. Both have merit and a place in the new college athletics ecosystem.
Iowa City NIL Club
The first collective to launch for the Hawkeyes was the Iowa City NIL Club. What appeared at first to be a grassroots efforts by Iowa football players to start capitalizing on their names, images and likenesses amid a void of other options was actually part of a nationwide push by a company called YOKE.
YOKE has put together all the infrastructure to help athletes across the country begin making money in exchange for things like autograph signings, pre-recorded interviews and live video calls with fans. The look and feel of the websites across dozens of colleges around the country is the same. The framework is nearly identical and the fee taken by YOKE appears to be a consistent 25%.
After pre-releasing their launch back in July, the Iowa City NIL Club blew through their initial 2000 memberships, which cost $199 each, and raised north of $400,000. For the dozens of players involved, it meant earning a chunk of that $300,000 in net proceeds and for YOKE, it meant a high margin $100,000 of revenue.
To-date, the message board set up for members has been relatively quiet, but there have indeed been interactions between players and fans. There have also been multiple video calls available with players and exclusive content for members to consume. There will also be a members-only tailgate for Saturday’s season-opener. All attendees are required to be members - no guests permitted.
The second collective is more in line with what we have seen and heard about at other schools. Launched later in July, SWARM has two separate legal entities designed to facilitate two different types of fundraising for Hawkeye football and men’s and women’s basketball.
The first is a 501(c)(3) tax-exempt organization which allows all athletes in the three aforementioned programs (Iowa City NIL Club is strictly football) to sign up to receive benefits. Those benefits will be paid out based on charitable work done by the athlete. Donations made to the collective by members are fully tax deductible (this is not tax advice, please consult an accountant).
Notably, SWARM was created and is run by former Hawkeye Brad Heinrichs who has put in more than $100,000 of his own funds to help get things started. The collective takes only what is required to keep the lights on, which at the moment isn’t much for it’s staff of two fundraising employees (who are both former Hawkeyes) who were hired away from the UI Center for Advancement and UI Athletics.
Beyond the tax deduction, members of SWARM receive varying degrees of perks for varying membership levels. Those range from a t-shirt to membership cards for 10-15% discounts at a number of local establishments in Iowa City, higher end merchandise (this writer can verify the Travis Matthew polo is excellent quality), members tailgates with access for one guest, and personalized interactions with athletes.
Unlike Iowa City NIL Club, it’s been a bit of a slower start for the 501(c)(3) arm of SWARM. That’s likely due in part to a launch that came on the heels of ICNC which quickly raised funds from Hawkeye fans looking for any way to get involved. As of this writing, SWARM membership is only around 170 strong. However, the collective has raised well north of half a million dollars in roughly six weeks of operation.
Where does that leave the collective to go? In speaking with Heinrichs, there is a lot of room for growth and high expectations both internally and from Iowa’s coaches.
“I think the coaches are hoping for us to be able to provide every player the opportunity to earn $1000-$1500 per month, whether they are the 13th player on the women’s basketball team, or the starting QB for the football team. Each kid will have the same opportunity and the same requirement for charitable work. My goal would be to double that amount in year 2, and hopefully ultimately the SWARM collective will allow these kids to earn quite a bit more than that….but remember, they will have to earn it. This is NOT pay to play.
I believe that NIL will ultimately become as important as the athletic department itself. It’s already becoming a huge component in recruitment and retention. It used to be that there was an arms race on facilities, which impacted everything. From here on out, I think success on the NIL front will have as great of an impact on our athletic programs’ success as our facilities.”
Doing the math, Heinrichs is hoping to raise close to $2M in the first year to make the numbers work for the $1000-2000 a month coaches are hoping to land for their players. But that doesn’t include those big sponsorship deals that fans typically think of when they think of name, image and likeness at its roots.
That’s where the other arm of SWARM comes in. The second, separate company is not tax deductible and you can’t simply make a donation or become a member. That is, unless you happen to be a business with plans for a sponsorship deal with an athlete. In that case, you can get in contact with SWARM and the company will take your funds to connect you with an athlete.
Heinrichs says that’s where the bigger dollars are expected to come from initially. And he’s been right so far. Almost immediately upon Iowa landing a certain 5-star offensive tackle from in the state, someone was on the horn with SWARM looking to pay six figures for a deal.
For Iowa football, that may not be the goal, but for head basketball coach Fran McCaffery it should be music to his ears. Upon hearing Brad was spearheading a new collective for Iowa, McCaffery was on the phone almost immediately thanking Heinrichs and providing input on the types of things he was seeing on the recruiting trail, including six figure NIL deals for some of his top priorities in the transfer portal. That wasn’t something the Hawkeyes had demonstrated they could get for their athletes once on campus. Yet.
That’s all changing now whether the Iowa athletic department, it’s athletic director (who has yet to provide any sort of assistance in identifying potential donors/members or coordination with I-Club groups, etc) or the NCAA want to admit it. College sports is forever different and the teams that will be competing going forward have put themselves on solid footing with an early entry into the next arms race. Iowa City NIL Club and SWARM weren’t early, but they weren’t irreversibly late either and now coaching staff across Iowa’s two revenue-generating sports, as well as women’s basketball (Heinrichs says head coach Lisa Bluder has been both appreciative and supportive, noting few collectives nationally are putting female athletes on equal footing with men), have the firepower they need to compete in this new world of NIL recruiting.
What Can You Do?
So what’s an every day Hawkeye fan to do? The easy answer is whatever you feel is right for you. There is no doubt a segment of the fanbase that views NIL as simply pay to play and wants no part of that.
But if you do feel inclined to put your money where your fandom is, you can join the Iowa City NIL Club for an annual pass at a rate of $199 by signing up here. You can also join SWARM at any of their five tiers (ranging from ($19.57-1,000 a month or $200-10,000 annually) or make a donation of any size by signing up here (it’s worth pointing out that similar to I-Club, your SWARM donations accumulate within a year so if you choose to make a one-time donation and later make another, they are added together to potentially achieve a higher membership level).