The Wild World of Money in College Football

from The New York Times this is the. daily I'm Natalie kro in for Sabrina. [Music]. tavernes tonight millions of Americans. will tune in to watch one of the biggest. sports events of the year college. football's National Championship Game on. the field the game will be determined by. the skill of the players and coaches but. behind the scenes secretive groups of.

donors are wielding enormous influence. over what fans will. see today my colleague David farenthold. on the shadowy industry up ending. college football and how it's brought. amateur Athletics even closer to the. world of professional. [Music]. [Applause]. [Music]. sports.

it's Monday January. [Music]. 8th David hi hi Natalie it's nice to be. here so you're an investigative reporter. at the New York Times and recently. you've been looking into the world of. college sports tell me why well college. sports is to me a fascinating subject. because there's so much money involved. here I think people have this sense that. college sports is amateur Athletics but. the amount of money brought into these.

college football programs particularly. are in the billions of dollars I'm an. investigative reporter covering. nonprofits obviously colleges are. nonprofits so it's one of the biggest. businesses that nonprofits carry out and. there's also a personal connection for. me I'm a huge college sports fan and the. team I follow is University of Texas. Longhorns I've been a fan of UT since I. was a little kid so the way I got into. this story was late 2021 I saw a press. release from a group at University of. Texas supporting Longhorns and it was a.

charity it was a nonprofit the topic. that I had just gotten interested in. writing about and this charity was doing. something really odd something I'd never. seen. before they were saying the reason our. charity exists is to pay offensive. lineman at the University of Texas to. pay football. players particularly they were saying. we're going to pay every offensive. lineman on the University of Texas team. $50,000 a year and all you have to do to. get the money is to be on the team to be. AC dally eligible to.

play now that struck me I mean as a UT. fan great I'm glad whatever it takes to. get better offensive lineman but as a. nonprofit reporter that struck me really. strangely because you know that's not. what charities do Charities don't pay. offensive linemen and I was struggling. to figure out how they're squaring their. mission of helping the public good with. their apparent goal of helping the. University of Texas when football. games so I started looking into this and. what I found was was that this.

University of Texas group was one of. more than a 100 groups uh that were. doing similar things at schools all. around the country using cash from. donors to pay athletes and to attract. athletes to their school to keep them. when they were already there and that. what I also found was that those. payments were kind of in a way that. maybe not be obvious to the average fan. and definitely not obvious to the Casual. fan were reshaping the power dynamics. the rules the very sort of essence of. big-time college. football.

how so tell me more about that well we. all know that college sports is an. amateur game you can't be paid for. playing the game that was the Hallmark. of college sports for decades and it was. strictly policed by the uh NCAA the. organization that sort of oversees Big. Time college sports the consequences for. paying players under the table could be. very high Southern Methodist University. famously got what they called the death. penalty their football team was shut. down for a year because their boosters.

were paying players back in the 80s and. it took them 30 years to recover so. officially even though many of these. schools were benefiting financially from. college sports there was this red line. that none of that money was supposed to. go to student athletes that's right. hundreds of millions of dollars billions. of dollars flowing into these schools. collectively from TV deals from ticket. sales and it finds all these other. channels coaches get paid tens of. millions of dollars a year.

and the money would get filtered to. players in a way and that they would get. scholarships and they would get a nice. dorm to live in very nice athletic. facilities but the players did not get. paid and that was both the rule and also. sort of the moral heart of college. sports for so long was this is an. amateur. game but then in 2021 it's being called. a game changer for college athletes that. system changed drastically you're going. to have quarterbacks and point guards. and pitchers making thousands if not.

hundreds of thousands if not millions of. dollars now this was a change that the. NCAA didn't want it was forced on the. NCAA in part by State legislatures. student athletes in Missouri are one. signature away from making a profit off. their name and likeness which had. started to pass laws saying that. athletes in their state should be able. to make endorsements to get paid today. the Supreme Court will hear arguments on. whether the NCAA has the authority there. was also a Supreme Court case the. schools are conspiring to pay no Aries.

to the workers who are making the. schools billions of dollars in which the. justices ruled unanimously against the. incaa against its ability to control. what athletes receive as compensation. name image and likeness it's. revolutionizing college sports student. athletes the result was something called. the nil name image and likeness rules. which the NCAA put in place again under. duress in the summer of. [Music]. 2021.

right this was a huge deal at the time. and if I remember correctly the. expectation was that the players the. students would be able to make money. from Brand sponsorships and things like. that capitalize on their Fame but they. couldn't be treated like employees who. were making a salary that's right that. was very very important of the NCAA both. because the schools don't want to part. with any of the huge amount of money. they were making off college sports but. also because if you treat them as. employees there's whole bunch of other.

things that Cascade from that the. control that universities have over. players in this current system where. they're just student athletes and not. employees would be eroded if they were. basically professional athletes think. how much more rights and power a. professional football player has than a. college football player has the NCAA did. not want to usher in that system so. David were there rules around this. sponsorship money yes most importantly. there was a rule that said nothing about.

the payments anybody makes to players. can be conditioned on them playing at. all or on them playing well and the. second thing was you can't use these. payments these nil payments to recruit. players either to recruit high schoolers. or to recruit people from other schools. to your school those were the guidelines. the NCAA set but almost immediately. after these rules come into effect. wealthy boosters Rich folks who support. these teams see a loophole they see an. opening for them.

else they start these things called. collectives which are groups that are. not legally affiliated with the schools. they support but they exist to support a. specific school's athletic. programs and what they do is pull money. from Rich donors and it can be millions. of dollars and they pay athletes for the. rights to their name in some cases for. the athletes to do charity work make an. appearance at the Boys and Girls Club to. appear at at another Charity's Gala to. post about charity on social social. media but often these Charities pay way.

more than an actual charity would pay. for this I talked to somebody who was a. at Michigan State and he paid somebody. $750,000 a year a football player and. the charity work that person did in. return was to make one social media post. a month whoa they're paying athletes. often who don't have much of an. endorsement value people who are really. valuable to their own team like an. offensive lineman or a fullback they're. paying that person according to their. value to the team not according to their.

endorsement value so this is not a. person you would ever buy Gatorade from. You' have never heard this person's name. but you know the team needs. them and a lot of these groups organize. themselves as tax exempt Charities they. get approval from the IRS so that means. that they are donations from donors are. tax deductible you it's a double benefit. you could get the linebacker you want. and you get a tax. [Music]. deduction wow so you have these.

collectives these outside groups that. are theoretically not attached to the. universities and they are ostensibly. paying for charitable work but really. this is all just a cover for recruitment. for these. teams that's the weird thing about this. system is that yes the things that they. are specifically prohibited from doing. paying players to play you know. coordinating with schools to make sure. they get the players the school want and.

recruiting players with money those. three things which you're not allowed to. do those are the reasons you have a. collective those are the things the. collective is built to do those are the. functions of a collective truly so all. the things that they are doing that. they're that they're designed to do that. they're Gathering money from donors to. do are the things that theoretically. they're not allowed to do and so you. have this weird flowering of a system. with a gigantic wink and a nod that is. doing for every school what the NCAA. says shouldn't happen in any school can. you give me an example of how this. actually works.

well a great example is that University. of Texas Collective I was talking about. horns with heart people who are not. University of Texas fans like me may not. know but 2021 was a bad year for the. Texas Longhorns they are a proud program. they've had some great national. championships but they were at a low E. at that point they had a losing season. which you know was rare for them they. lost six games in a row at one point for. the first time since the 50s the season. has ended they're not going to a bowl. game everybody in Austin is depressed. things were bad and the coach has an. answer he says we need linemen we need.

the big blockers up front who will give. the quarterback time to throw who give. the running back room to run we need. bigger humans and so that's when this. Collective comes in with its promise to. pay $50,000 to any lineman who plays at. the University of Texas and it works I. talked uh recently to a number of. linemen who are at the University of. Texas now one example this guy Cameron. Williams so he is a 6'5 370 lb huge. Prospect coming out of high school in. Dallas he had committed already to a.

different school he committed to Oregon. to play for the Oregon Ducks This. Promise comes out he decommits from. Oregon and commits to University of. Texas a week later and what he told me. was look I come from a family without. much money you know this was a chance. for me to get $50,000 and help my family. right away I don't have to wait four. years and hope I make the NFL draft I. can help my family right now so why. wouldn't I do it so that offseason Texas. had wanted five good offensive linemen. they got seven with the help of this. Collective with help of this offer.

$50,000 and it starts a rebuilding. program that takes Texas from that. really low E to where they were this. year which is they had a spot in the. college football semifinals they were. one of the last four teams standing now. they lost to Washington at the very end. of the a great game but that Collective. the promise they made the linemen they. brought in took them from a pretty low E. back to almost the top of college. football so that's a sign of the. potential these collectives have for. even well established programs like. Texas it's kind of amazing David in this.

example you're giving you see in real. time how this money affects the makeup. of college sports you have a kid openly. you know switching schools because of. the offer I mean you see these. collectives at work recruiting players. that teams are specifically saying they. need to win that's right I don't want to. be naive obviously in the past there. were times when boosters would pay off.

players maybe to switch schools or maybe. to come to their school but there's a. difference here it's in a press release. this is above the board and so the. potential number of people who could be. swayed by this is so much bigger and so. what Texas does sets a model that other. people immediately start to follow they. look around and say Hey you know we need. linemen and we got rich donors let's put. those two together so you start to see. this proliferation of collectives all. over the country we've now counted more. than 140 at all kinds of different. schools that start following Texas's.

model and that they're raising tons of. money and offering it to players many of. them also copying Texas's model and that. they're doing it through a tax exempt. charity and you start to see that bull. workk of college sports amateurism the. idea that players do it because they. love to play or they do it because of. the academics not because they're. getting paid that starts to crumble. almost immediately uh after the nil. system came into place how is all of. this affecting the players I mean they. must be pretty happy about all this.

extremely us having nil now is such a. great thing I mean it just benefits guys. especially guys that might not do as. well on the next level or you know have. like career injuries cuz this game you. can be hurt your career could be over at. any given time you know so it's a. blessing for all of us to be in this. time where we're able to get paid when. we talk to players they're very happy to. get you know a little tiny piece and. let's face it it is still a little tiny. piece piece of the huge amount of money.

that their labor generates nil's really. helped me you know put me in a position. to where I can take care of my family. and where I can help out and stretch my. hand out when I'm able to when we talked. to players we were asking them in the. lead up to the semi-final games last. week you know what did you use this. money for and the answers we heard were. often take care of my daughter pay for. daycare every every week be able to buy. her the nice things for Christmas be. able to help out when she needs a flight.

to come see me you know I paid for my. family to come up and see a game I paid. my family's bills Like Me growing up I. really didn't have money so like the. 50,000 it was just like amazing it just. like shocked me so Cameron Williams. University of Texas lineman that came to. Texas after seeing that offer $50,000. she says send my mom some money whenever. she needs it really feel good what say I. got her bought her a cell phone she must. have been like so I mean so happy her. first iPhone really yeah wow and she so. these players were often thrilled to be.

able to provide something for their. families that they wouldn't have unless. they'd gone pro and you know for a lot. of these guys even the good ones that's. still an if and not a. wi so it sounds like the schools are. obviously benefiting from this system. the donors are also benefiting because. they can take credit for rebuilding. their team of choice and the players are. too everyone is kind of winning. yeah on the surface it does sound like a.

lot of people are benefiting but you. have to remember what we're talking. about here is basically an unregulated. black market for labor and there's a lot. of downsides that come with that. including that this system may be. unsustainable and parts of it may be. [Music]. illegal we'll be right. back David you've walked us through how. these collectives have sort of.

supercharged paying players in college. sports but even though players are. getting windfalls of in some cases. lifechanging amounts of money there are. also downsides tell me about them yeah. the players are just really exposed. because as I said they're basically in. an unregulated Black Market they're. getting paid by people who are not. really their employers for doing a job. it's not really the job they're doing. there's not that many protections if. they get in Ed the collective could stop. paying them in some cases collectives.

have made promises to players signed. contracts and then not fulfilled them. there's a famous example of a player. from high school committed to the. University of Florida after its. Collective promised to pay him more than. $10 million then the collective didn't. have the money shut down and he didn't. get paid at all he transferred to. another school so there's no recourse to. rely on if these collectives leave you. high and dry so players are really. exposed in that way the second way is. that there's just no transparency here. there's no way for for players to gather. the information they need to know how.

much they should expect to be paid and. how much they're worth think about. professional leagues right we know how. much a good second baseman in Major. League Baseball ought to get we know how. much a good quarterback in the National. Football League ought to get because. there are unions there's minimum. contract but there's also a lot of. transparency about what other players at. those skill levels and those positions. are paid there's none of that here it's. all sort of rumors and misinformation so. if you're a player or player in his. family trying to navigate this Market. and find out really what you're worth.

it's almost impossible and the secrecy. goes so far that even within teams we. talked to a collective at SMU Southern. Methodist who said we tell our players. don't ask each other what we're paying. you because you know we don't want you. to find out that the guy next to you is. getting paid more and when I say there's. no transparency I've tried that I sent. public records requests to more than 40. public universities about what their nio. collectives are paying their students. and almost all of them said either that. they didn't know or they wouldn't tell. us in some cases they wouldn't tell us.

because basically the logic was we want. our football team to win and if we tell. you what our players get paid that might. result in a collective disadvantage for. us and so we're just not going to tell. you that's how hard it is to figure out. what the rules are and the standards are. in this market imagine trying to. navigate that as an 18 or 19 year old I. mean that is a truly extreme level of. secrecy that these collectives are. treating what are ostensibly charity. payments in some cases as a trade secret.

right and if you pull back there's a. really big Equity problem now college. sports are subject to something called. Title 9 which is federal legislation. that mandates equal opportunity for. female athletes and male athletes. obviously the decades that title n's. been in place it has caused a revolution. in women's sports not just in the. college level but the professional level. collectives are because they're third. parties they're not part of the. University they are not subject to Title. 9 and they do not follow it definitely. so I think the average salary for men's. basketball players from collectives is.

like 30,000 something the average salary. for women's basketball players is like. 9,000 so there's a huge imbalance toward. male athletes and the collectives say. you know that's what our donors want our. donors are you know people who like to. watch football so you know there's no. requirement that they share the wealth. with you know the rest of the sports. teams at the school the way there is for. money that comes through the. university the other big downside is. that a lot of what these groups are. doing may be illegal and that goes back. to the fact that a lot of them like the.

one at University of Texas are operating. as tax exempt Charities explain that we. talked before about sort of the rules. that tax exempt Charities have to follow. you know money in a tax exempt charity. is supposed to be used for the public. good and it can't be used to benefit the. private interests of a few people now. the IRS is effectively the regulator of. nonprofits in the US and it allowed a. lot of these nonprofits in it gave them. tax exempt status these collectives and. then in May of this year it seemed to.

reverse itself what the IRS did was put. out a memo saying the way that a lot of. these collectives operate shows that. what they really care about is helping. the athletes and helping the team win. not helping the public good and if. that's the case you can't really be a. charity you know you're not really tax. exempt if that's the case so it was a. warning to all the collectives out there. look you got to change in the future you. have to reorganize your operations so. that you really are helping the public. good first and paying the ass fleets. second so a lot of the collectives are.

sort of grappling with that do we just. keep doing what we're doing until the. IRS comes to us specifically and makes. us stop or is that too much of a risk. are we taking the risk that we're going. to lose our tax exemption have to pay. penalty taxes should we make some change. in the meantime are they making change. in the meantime as somebody who's talked. to many many of these groups I will say. no some of them have talked about making. changes the only groups we found making. a change are the ones that had not. actually gotten the IRS approved. approval before the IRS changed its mind.

so there's one at the University of. Michigan that was still in the queue for. approval when the IRS changed its mind. and they had to massively overhaul their. operations to get approval so where a. lot of collectives pay 100% of their. money to athletes they had the change so. they paid 70% of their money to other. Charities and only 30% of their money to. athletes so imagine if you have to. convert your Collective to run on that. model 70% of your money doesn't go to. the athletes you try telling that to. your donors and how much more money. would you have to raise to have the same.

impact on your. school it certainly seems as though this. system is flawed and it's drying. increasing criticism there are questions. about the legality of it so how is the. body that sets the rules for college. sports the NCAA. responding so far they've responded. really weakly in fact the only case we. know of where anyone's been punished for. nil being used in recruiting which again. is against the rules is a case where at.

the University of Miami a booster who. was paying a lot of nil money to players. sort of took pictures of himself live. tweeted himself recruiting two players. from another school to Miami wow in that. case where the proof was on the internet. the NCAA punished the Miami basketball. team LLY nobody else that we know of has. been punished in that way but the NCAA. sees what's happening and I think. realizes two things one that it's. encouraged huge widescale Disobedience. of its rules schs and also that it's. allowed a shift of power from the.

schools themselves to these donor run. collectives that the conferences the. schools and the NCA are alarmed by so. what they've done is proposed a a pretty. significant overhaul of the way these. rules work okay what is. it at the core of it the idea is that. schools would now be able to pay their. own players directly so the thing that. collectives do now paying the players. through this nil system nominally paying. them for their name image and likeness.

but really just paying them to play that. function would now be shifted to the. schools themselves so the school. athletic department could pay one of its. offensive linemen for his quote unquote. name image and likeness rights and the. collective wouldn't be necessary anymore. I think the floor would be $330,000 per. player and it could go up from there how. would that actually work in practice. because I I have to imagine then not. every school can afford to pay all of. their athletes at least 30,00. yeah that's right now obviously this is.

just a proposal it's a long way from. becoming a reality but it's interesting. to see how the NCAA imagines that if it. did become reality the world would. change and what it imagines is basically. a league of super teams you're going to. take the top 30 teams in college. football which are the ones that can. afford to pay their players and be in. this game and you're going to cleave. them off and make them into sort of like. a miniature NFL so that's bad for the. people who were on the outside of that. system looking in you know if you root. for Washington state or Minnesota or. rice or Vanderbilt one of these schools.

that probably isn't going to have the. money to compete or want to compete at. least now you have the sense that like. maybe if everything goes right you could. be a Cinderella team you know there's. still theoretically a chance for you to. be in the National Championship now you. know Cinderella is at home with a mice. there's no chance you're like legally. never going to compete for that. championship and you're playing for a. second class Crown maybe people are okay. with that but it changes what it means. to be a fan of those schools and under. this proposal in this theoretical super. league are the universities treating.

their players the students like. employees no so the schools would take. the function of paying the players from. the collectives and take it for. themselves but they would still want to. pursue this kind of like quirky logic to. make sure that the students are not. employees because the NCAA still doesn't. want to take on the employer employee. relationship with students and all the. other rights to collective bargaining. you know employment law protections. workers all the things that would come. with that relationship this is an effort.

to keep that out whilst taking the. function of paying the players in. hearing this proposal it seems like the. NCAA is really walking this tight rope. where it is proposing a change but not. fully embracing the idea that college. athletes should be treated like. professionals there's financial reasons. for that you know the schools want to. keep as much of this huge amount of. money for themselves and not share it. with players but there's also something.

that's really fundamental about college. sports that I think they worry about. being lost and that is the magic of. college sports is that it's not. professional sports you know there's. this idea that the players play for the. fight song and the school spirit and the. the meaning of what it means to be a. Texas Longhorn or you know A&M Aggie or. whoever else so when you cheer in the. stands and they play in the field you're. all part of something that's bigger than. just money and if you make it money if. college sports becomes mercenaries going. from place to place you know for.

salaries I think they're worried that. they'll lose the thing that has made. college sports such as zillian dollar. industry that'll just become basically a. minor league and who cares about Minor. League. Sports I have to ask honestly as a. viewer of college. sports was there any of that amateurism. really left in football for example I. mean so much of it already feels like a. professional sport the money that comes. in not to the players but to the schools.

the number of viewers the stakes I mean. I'd imagine college football already has. more viewers than the NHL for example. yes I mean in so many ways this was. already professionalized the only thing. that seemed different before was that. the labor was. free I think of this is sort of like a. Santa Claus problem right if you want to. believe in Santa Claus you go looking. for reasons to believe that. and until you see the guy in the mall.

take off his beard and see that it's not. Santa Claus until you're forced to sort. of see that the illusion is an illusion. you know you're looking for reasons to. believe and that's the case with. football fans like. [Music]. me the illusion that's being perpetrated. here that that we want to believe in is. that those guys in the field are doing. it for me they're doing it because they. love the school that I love they're. doing it because they believe in the. fight song and the ethos and the the. lore of the school they're out there. playing hard because me and the stands. and them on the field were all.

supporting the same institution so what. these collectives have done it's sort of. ironic that they are such shadowy. secretive organizations their existence. and the way that they have sort of you. know brought the payment of players. normalized it brought it into the light. has sort of changed the Illusions made. it impossible to see that that's to. believe that's Santa Claus right and I. think that's going to change the way. that the college sports goes on in the. future it's certainly a benefit for. players the question is what does it. mean for fans and you know if our.

illusion goes away does that change the. popularity of the sport does it change. what draws people in it's certainly. going to be a big change that both. players and fans have to reckon. [Music]. with David thank you so much thank. [Music]. you. we'll be right.

back here's what else you need to know. today the Federal Aviation. Administration ordered US airlines to. temporarily stop Flying Boeing 737 max9. planes after a harrowing episode on. Friday in which an Alaska Airlines jet. was forced to make an emergency. landing after taking off from Portland. Oregon part of the body of the plane. blew out midair terrifying passengers.

and exposing them to howling winds. 16,000 ft above ground the plane landed. safely and no one was seriously injured. but the incident prompted us Regulators. to require immediate safety inspections. of all similar planes forcing Boeing to. again confront concerns over the max its. best-selling and most scrutinized plane. in. history and on Sunday Senate and house. leaders announced they had struck a. bipartisan agreement on 2024 Government.

funding in hopes of averting a looming. government. shutdown the deal which sets total. spending at around $1.6 trillion keeps. in place a compromise measure struck. last year by President Biden and former. house Speaker Kevin McCarthy but it. stopped short of steeper budget cuts. proposed by farri House. Republicans while calling it the best. spending deal Republicans had secured in. years. speaker Mike Johnson acknowledged the.

difficulty ahead in passing the deal. through the house Ultra conservatives in. the house have steadfastly refused to. support any spending deal that does not. also include new immigration. restrictions to stem the flow of. migrants to the United States lawmakers. have less than 2 weeks to pass the. measure and get it to President Biden's. desk without a deal funding for parts of. the government will start to expire. setting off a partial government. shutdown on January. [Music].

19th today's episode was produced by AA. chaturv and will Reed with help from. Carlos petto Rob zipco and Michael Simon. Johnson it was edited by Mark George. with help from Lisa Chow contains. original music by Chelsea Daniel Pat. mccusker Dan pal Marian Lozano and Corey. shle and was engineered by Chris Wood. our theme music is by Jim brunberg and. Ben lansberg of.

[Music]. wonderly that's it for the daily I'm. Natalie kroe see you. [Music]. tomorrow.