NIL money and Scholarships?

[Alces Alces Gigas]

How important is the 9.9 cap when an athlete can get NIL money?     When can a committed HS athlete start negotiations for NIL money?  With some.of the numbers I hear being bandied about,  tuition and books ain't squat!

Edited June 18, 2023 by Alces Alces Gigas

[Idaho]

Still important to mid-lower level teams, but not as important to programs with a lot of money to hand out in NIL. 

[DJT]

At top schools, scholarship athletes will be the “room guys”.

[bnwtwg]

9 hours ago, DJT said:

At top schools, scholarship athletes will be the “room guys”.

An unintended positive consequence of NIL for olympic sports.

[Idaho]

I would be curious to see the numbers of guys per program that have an NIL that  covers the amount of a full-ride scholarship (and above). I doubt this information is accessible, but it would provide a number of "extra scholarships" per team as a result of NIL. 

Edited June 19, 2023 by Idaho

[Idaho]

 

10 hours ago, DJT said:

At top schools, scholarship athletes will be the “room guys”.

1 hour ago, bnwtwg said:

An unintended positive consequence of NIL for olympic sports.

At "top schools" yes - At other schools, no. 

A known struggle for many sports programs has and will be larger donors redirecting funds to NIL rather to the program in general.  It will also be interesting to see how the tax aspect will play a part in how a donor will donate. 

[DJT]

31 minutes ago, Idaho said:

At "top schools" yes - At other schools, no. 

I think it'll be something like this:

At "top schools"

1) Get recruited on scholarship --> make the starting lineup --> Get NIL

2) Get recruited on scholarship -> don't make starting lineup -> Be "room guy" on scholarship

3) Get recruited on scholarship -> don't make starting lineup -> Transfer to where can make starting lineup on scholarship

At "not top schools"

1) Get recruited on scholarship -> succeed -> transfer to top school for NIL

2) Get recruited on scholarship -> don't succeed -> pull scholarship to use on non-starter transfer from top school/ next recruiting class

31 minutes ago, Idaho said:

A known struggle for many sports programs has and will be larger donors redirecting funds to NIL rather to the program in general.  It will also be interesting to see how the tax aspect will play a part in how a donor will donate. 

This was basically what I was talking about on the tax thread.. making collectives not tax deductible was a gift to athletic departments.

Edited June 19, 2023 by DJT

[Idaho]

"non-big" schools are having to get creative in staying competitive. Obviously they have to be good at developing the talent they bring in as recruits. They have to find those non-starters on bigger teams that can come in and start and be developed as well. They also have to figure out how to bring in a grad guy who can improve your team (i.e. a returning NQ) that isn't going to cost a lot of money. It's definitely a lot harder work for 90% of the teams to stay in the picture than it is for the top 10% teams. 

[Wrestej]

Is it just speculation for what wrestlers are getting or is there actual documentation for what each wrestler receives.  Shoot, the highest international guys we have just started making decent money 5-10 years ago.  Find it hard to believe collegiate kids are knocking down major coin, outside of a handful or so guys.  Niche sports don’t usually rake in lots of cash.  A few universities come out ahead with their program but I would think only a few.

[DJT]

9 minutes ago, Idaho said:

"non-big" schools are having to get creative in staying competitive. Obviously they have to be good at developing the talent they bring in as recruits. They have to find those non-starters on bigger teams that can come in and start and be developed as well. They also have to figure out how to bring in a grad guy who can improve your team (i.e. a returning NQ) that isn't going to cost a lot of money. It's definitely a lot harder work for 90% of the teams to stay in the picture than it is for the top 10% teams. 

"Not top schools" might even start questioning the value of burning a scholarship on a HS kid and developing him, just to have him transfer away. It might make more sense to let kids develop at top schools for a couple of years, then pick them up on scholarship.

With that said, this is all speculation and thinking aloud. It'll be interesting to see how it all pans out over time. We're in the infancy of this new era, and it's going to take some trial and error by teams to figure out what works. 

[DJT]

17 minutes ago, Wrestej said:

Is it just speculation for what wrestlers are getting or is there actual documentation for what each wrestler receives.  Shoot, the highest international guys we have just started making decent money 5-10 years ago.  Find it hard to believe collegiate kids are knocking down major coin, outside of a handful or so guys.  Niche sports don’t usually rake in lots of cash.  A few universities come out ahead with their program but I would think only a few.

It doesn't really matter that wrestling doesn't make money... the money is coming from donors, not the school, so the balance sheet doesn't factor into the equation. It's more of a hobby for people with money to be able to have power/influence over something they otherwise would not... sort of like John DuPont and Foxcatcher.

Top collegiate wrestlers have a higher earning potential than top international wrestlers (with some exceptions). The college wrestlers are attached to a school and its fanbase/alumni/donors... some international wrestlers are as well but not to the same level. Sure, an alumni would like to see a former wrestler win an Olympic Gold, but he probably cares more about the college team winning an NCAA title. Strange to think, but it is what it is.

[Alces Alces Gigas]

Will high profile HS kids negotiate to get NIL $$ as soon as they arrive on campus?  

[DJT]

19 minutes ago, Alces Alces Gigas said:

Will high profile HS kids negotiate to get NIL $$ as soon as they arrive on campus?  

Already happening on football and basketball, and I’m sure to some extent in wrestling.
 

With NIL not being allowed to be tied to an athlete’s attendance at a specific school, it gets murky really fast. Obviously, if Nike signs an athlete to a contract, they’d want that athlete to be on a Nike sponsored team, not an Adidas team. Maybe that’s a loophole that they can go to any Nike school, not a specific one. Not sure.

This might be able to be bypassed in wrestling by, say, the Swarm Collective promising a recruit $X if they train at the Hawkeye Wrestling Club/RTC. Again, not sure. 

[wrestling fan]

 Can someone explain how scholarships work for instate versus out of state? Regardless of what school my kid wants to go to the instate school is a cheater ticket price than any out of state school. So won't most kids tend to stay in their own state? if a scholarship is only covering 1/3 of tuition?

Edited June 21, 2023 by wrestling fan

[Idaho]

22 hours ago, wrestling fan said:

 Can someone explain how scholarships work for instate versus out of state? Regardless of what school my kid wants to go to the instate school is a cheater ticket price than any out of state school. So won't most kids tend to stay in their own state? if a scholarship is only covering 1/3 of tuition?

Based on my experience with both attending school myself and now putting my own kids through school, this is what I have found: 

* Many states have scholarships that are only for their in state residents  going to an in state school.  

*Some states have grants that are only for in state residents going to in state schools (ie. California Grant)

* All schools have what I would describe as generic academic scholarships for all students. Some of these are need based. Some are based on GPA and/or SAT scores. 

* All schools have department scholarships that are for kids that have a  certain major in that department. Some of this scholarship money usually comes from donors or trusts set up for the department from someone who has left money for the school/ department. 

* Some schools participate in what is called an "out of state tuition exchange." This is where a student can apply for their out of state tuition to be waved. This scholarship is only available for schools that participate in that program. A lot of schools do not allow "stacking" of scholarships, which means if you get your out of state tuition waved, you do not qualify for other scholarships to stack on top of your out of state tuition being waved. 

* There are always local scholarships that can be earned as wall as national scholarships. 

I haven't covered everything, but that's a basic rundown. I am sure others can also chime in with what they have experienced. 

[gimpeltf]

22 hours ago, wrestling fan said:

 Can someone explain how scholarships work for instate versus out of state? Regardless of what school my kid wants to go to the instate school is a cheater ticket price than any out of state school. So won't most kids tend to stay in their own state? if a scholarship is only covering 1/3 of tuition?

Not sure I understand the question but someone trying to attend somewhere out-of-state might be offered a higher percentage amount than someone in-state to try to balance or beat the out-of-pocket total for that wrestler. 

[WrestlingRasta]

On 6/19/2023 at 10:33 AM, Wrestej said:

Find it hard to believe collegiate kids are knocking down major coin, outside of a handful or so guys.  Niche sports don’t usually rake in lots of cash.  A few universities come out ahead with their program but I would think only a few.

The donations are coming because of the school and its alumni.  Very little to do with actual wrestling and more to do with wanting your school to be on top no matter the endevour.  Universities have lifelong support from their alumni, an international wrestler not so much.

[Lipdrag]

NIL Salary caps are on the way - probably 5 years or so away.  Just like scholarship caps came along to stop certain football programs from putting all their own guys and then all of the possible credible competition on scholarship.  We already have free agency (transfer portal) in college athletics.  A salary cap will soon follow to help competitive balance.  It is not in the interest of any single team/program to conserve competitive balance because they are properly incentivized to "just win, baby".  The central organization must make the rules necessary to avoid the social Darwinism that ultimately leads to extinction when there are no more lesser critters to eat.

Edited June 23, 2023 by Lipdrag
Awesomeness.

[fishbane]

On 6/19/2023 at 9:35 AM, Idaho said:

I would be curious to see the numbers of guys per program that have an NIL that  covers the amount of a full-ride scholarship (and above). I doubt this information is accessible, but it would provide a number of "extra scholarships" per team as a result of NIL. 

An NIL agreement would need to provide above the $$ value of a full ride scholarship to replace it.  NIL deals are income and get taxed.  Scholarships generally are not taxable.  Tuition, fees, room, board, books, ext at a school like Iowa is probably $50k.  An NIL deal would need to be $65k+ to replace it.

[Idaho]

37 minutes ago, fishbane said:

An NIL agreement would need to provide above the $$ value of a full ride scholarship to replace it.  NIL deals are income and get taxed.  Scholarships generally are not taxable.  Tuition, fees, room, board, books, ext at a school like Iowa is probably $50k.  An NIL deal would need to be $65k+ to replace it.

Yep... depending on what other scholarships they earn... Iowa tuition is about 33k out of state  ....45-46 k w/room and board. However, if you get roommates and live off campus it's cheaper. Iowa has one of those progressive tax brackets for how much money is made. Unless there is a higher tax on NIL deals than normal income, I would say the number would be between 52-55k to cover it.   

[Wrestleknownothing]

2 hours ago, Lipdrag said:

NIL Salary caps are on the way - probably 5 years or so away.  Just like scholarship caps came along to stop certain football programs from putting all their own guys and then all of the possible credible competition on scholarship.  We already have free agency (transfer portal) in college athletics.  A salary cap will soon follow to help competitive balance.  It is not in the interest of any single team/program to conserve competitive balance because they are properly incentivized to "just win, baby".  The central organization must make the rules necessary to avoid the social Darwinism that ultimately leads to extinction when there are no more lesser critters to eat.

Who will impose a salary cap? And what payer(s) will they impose it upon? And how will it be legal in the absence of collective bargaining? And how will students unionize in order to collectively bargain if schools insist they are not employees? And how will it be enforceable?

[WrestlingRasta]

Can transfer all you want, but can only get NIL from school with which you signed original LOI. 

Never happen. But certainly gives more to think about. 

Edited June 24, 2023 by WrestlingRasta

[Paul158]

1 hour ago, Idaho said:

Yep... depending on what other scholarships they earn... Iowa tuition is about 33k out of state  ....45-46 k w/room and board. However, if you get roommates and live off campus it's cheaper. Iowa has one of those progressive tax brackets for how much money is made. Unless there is a higher tax on NIL deals than normal income, I would say the number would be between 52-55k to cover it.   

Wouldn't you have pay state and federal taxes on that income. Many times college students are claimed on their parents taxes so they would have zero deductions.

[fishbane]

1 hour ago, Idaho said:

Yep... depending on what other scholarships they earn... Iowa tuition is about 33k out of state  ....45-46 k w/room and board. However, if you get roommates and live off campus it's cheaper. Iowa has one of those progressive tax brackets for how much money is made. Unless there is a higher tax on NIL deals than normal income, I would say the number would be between 52-55k to cover it.   

1) Unless the athlete has planned in advance self employment tax (15.3%) would likely be due on NIL payments on top of normal federal and state income tax.

2) Other scholarships you speak of might be related to need.  Getting NIL money might put the student outside of need based criteria for certain scholarships, grants, and loans.  Before enrolling awards will be based on income that does not include NIL money. Some of that could go away if the students income spikes after receiving NIL $$$.  Students on an athletic scholarship would not have to deal with this risk.

Vito cited need based aid as a reason that he had not pursued NIL monies earlier.  Cornell being an Ivy does not award athletic scholarships.  They have a very large endowment (as do all Ivies) and they cover all of their students need by grants.  He was receiving significant amounts of need based aid (cost of attendance at Cornell is $88k) so if he made more money it would decrease his aid award.  Not sure what the actual numbers are but if he made $1 in NIL money he may owe $0.30 in taxes and it could have reduced his aid award from Cornell by another $0.30 or so removing some incentive to pursue it.  He said in his final season he will try and do more with NIL since his aid award is set before the start of the year and would not adjust based on his NIL income during the season.

[Wrestleknownothing]

50 minutes ago, WrestlingRasta said:

Can transfer all you want, but can only get NIL from school with which you signed original LOI. 

Never happen. But certainly gives more to think about. 

But NIL doesn't come from the school.