Cottage industry springs to life for NIL issues, but whom can college athletes trust?
Texas athletics has partnered with Altius Sports Group, Opendorse for assistance but athletes can go it alone
July 1 has come and gone, and college athletes eager to profit from their name, image and likeness can dive in headfirst.
Now comes a new problem: Whom should the athletes trust?
The NCAA is no help. Texas is one of six states whose new NIL laws are now in effect, but most others are lagging. University officials across the country are still scrambling to build out compliance and financial education programs.
“We can’t be involved in any way in arranging or brokering those types of deals,” said Drew Martin, a Texas executive senior associate athletic director.
A small but fast-growing cottage industry of companies has sprung up to “help” athletes with their name, image and likeness issues. But do these companies provide any real help? Do the athletes even need their services?
In truth, because this is new territory, the answers could be yes, no or maybe. Over time, those answers will evolve.
“This market, one year ago, there was 10 to 15 companies dabbling in it. We’ve been in this since 2012,” said Adi Kunalic, president of Opendorse, a social media company based in Lincoln, Neb. “Now, there are more than 100 companies, and they’re popping up left and right.”
Kunalic was Nebraska’s kickoff specialist in 2007-10 and played against Texas in the 2009 Big 12 championship game. (“I think one second should not have been put on the clock,” the native Texan said with a laugh.) Now Kunalic and former Nebraska teammate Blake Lawrence are helping athletes, mostly the professionals up to this point, with profiting from social media.
Opendorse has partnered with Texas athletics, but by no means are Longhorns athletes forced to use Opendorse’s platform for social media posts. The company’s primary selling point is turnkey functionality — Opendorse pairs athletes with marketers, collects payments and reports everything to UT compliance personnel as required by state law.
If an athlete wants to make $100 on a certain social media post, Opendorse will pay the athlete $100 up front, then recover that fee plus a commission charge from the marketer, Kunalic explained. Over time, Opendorse will grow its database of marketing deals, allowing schools and athletes to judge for themselves whether they were paid correctly.
The athlete "can go about the day and go back to practice knowing they didn’t do this on the back of a napkin,” Kunalic said.
But Opendorse is one of a multitude of companies that will be coming after the athletes. The best ones might not even exist yet. They don’t have to be innovative, either. Garden variety law firms are now touting their services as marketing advisers, ready and eager to help athletes strike deals.
Parents might have thought the recruiting process was over, but it’s just begun.
Athletes, schools figuring out the rules
“The truth is there’s more incompetence than nefariousness,” said Casey Schwab, CEO and founder of Altius Sports Partners. His company is an official partner with Texas athletics through the school’s Leverage program for NIL issues.
Before starting his own company, Schwab was the vice president of business and legal affairs for the NFL Players Association. He’s been in the room when TV networks struck deals with the league worth billions.
Schwab’s company signed with Texas in September 2020 to build “a best-in-class NIL program for Texas student athletes,” according to the contract obtained through open records. Essentially, Altius agrees to make its staff available to UT athletes for questions about contracts, compensation and personal brand image.
The athletes have access to Altius for free. The school pays for the company’s advising services, and the state attorney general ruled that the fee does not have to be disclosed.
It’s still unclear whether the contractual information submitted by athletes to schools will be subject to open records laws. The marketplace might demand some level of transparency to avoid veering off into recruiting violations, Schwab said.
“I’m sure there are bad guys out there just looking to make a buck,” he said. “Bad guys are going to be bad guys. What I’m more concerned about are the people who have good intentions but have poor execution.”
Athletes are going to be offered marketing deals directly through their social media accounts or by some other means. How are they supposed to know whether it’s a good deal? How much should that company actually be paying an athlete for a tweet, an Instagram post or a TikTok video?
Schwab said his company is still working through the details of a hotline “that’s like a bat phone. Athletes can call and get direct response.”
Both Schwab and Kunalic have words of warning for athletic departments that aren’t prepared for all this.
Who is your point person within the department acting as sort of a traffic cop? At Texas, that’s Martin, one of athletic director Chris Del Conte’s trusted lieutenants. Arin Dunn, director of Texas’ student-athlete development, is also a key liaison, along with Caten Hyde and Kevin Richardson (creative development).
Athletes are not allowed to strike deals in direct conflict with existing school contracts, according to Texas state law. For example, if Texas had a contract with Coca-Cola, an athlete cannot have a marketing deal with Pepsi. But who steps in and stops those from happening if the school isn’t privy to the deal until it’s already agreed upon or even executed?
“How that’s really all going to play out, we’re still cobbling everything together in terms of the process,” Martin said. “Who reviews it? What are we going to say are conflicts? Is it just certain sponsor categories?”
This has created chaos within athletic departments, according to various reports around the country.
“Our whole existence has been to build technology that educates athletes to help them stay compliant, stay safe, stay informed,” Kunalic said. “There’s going to be some athletes who do it wrong or maybe get in trouble. It’s going to happen. There’s an inevitability to it.”
Said Schwab: “The NCAA can’t punish Subway or Verizon or the local pizza joint for doing something wrong. Who’s going to get the letter? Who’s going to get suspended? That’s where people who work for these companies are getting out over their skis, and they’re going to ultimately hurt the athletes.”
According to the law, no third-party company affiliated with UT can say whether an athlete should choose company A over company B and pick this deal over that one. All they can really do is guide athletes. Texas has no real responsibility and no liability.
If the deal goes bad, Martin said, “That onus ultimately lies on the individual.”
What's legal and what's not?
Do athletes even need to use a third-party company? Not really, at least not for simple things like getting paid for autographs or appearances.
In some respects, they just shouldn’t overthink it. Let’s say the UT football team decides to meet somewhere off campus, such as a park or a restaurant. Fans show up, form a line and pay $25 to get every player’s autograph. At the end of the night, the players split the pot.
Joe Schwartz was a walk-on for the Texas men’s basketball team in 2015-18. During his time on campus, he and other walk-ons created a Twitter account celebrating their end-of-the-bench status.
“What if we would’ve made T-shirts?” Schwartz said. “What if we had really been active on social media? But we weren’t allowed to. That’s why we weren’t as interested in blowing it up on Twitter.”
Now Schwartz is one of several former UT athletes who have shipped all their remaining Longhorns workout gear to The Players Trunk, a website started by former Michigan basketball team managers.
Do you want Schwartz’s authentic workout shorts? Size large are available for $45. Fans can buy Dylan Haines’ game-worn football pants for $85 or Tim Yoder’s size 10 football cleats for $150.
Texas rules currently prevent athletes from selling their UT-branded athletic gear online. But could that change? Everything with name, image and likeness should be up for debate as this is all new. The reason fans want athletes’ gear is directly associated with their name, image and likeness.
“I think there will be things that haven’t been contemplated in this first round of legislation where people say, ‘Hmm, we didn’t think about this. What about that?’” Martin said. “I think it’s going to be evolutionary as to what the rules wind up being.”
What if Texas running back Bijan Robinson runs for 200 yards against Oklahoma in the Cotton Bowl? Then he autographs a sweaty, game-worn T-shirt and puts it on The Players Trunk and asks $200 for it — should that be allowed?
“It’s not allowed right now, but it should be,” Schwartz said. “Think about all the people on Twitter that are talking about him. He’s going to be all over SportsCenter. You’re allowed to talk about him, but he’s not allowed to sell the shirt that he ran his ass off in?”
All about relationships
The most creative athletes will be the ones making the most money, experts agree. But even the basic marketing strategies will always work.
Texas football players Keondre Coburn and DeMarvion Overshown recently posed for a Twitter photo with Sam Elsaadi, vice president of Big City Wings. The Houston-based restaurant opened its first store in July 2015 and will have 12 locations by the end of September.
Elsaadi became friends with Coburn when he was a high school senior at Spring Westfield. Of course, Elsaadi recognizes Coburn’s status as a Texas athlete. But they were friends first. Coburn has never asked for free food, Elsaadi said. Big City Wings catered a graduation party, and Coburn’s father “actually paid for the entire event, even though I would have done it for free.”
Now with these rule changes, Big City Wings can cater an event for Coburn, Overshown or any other athlete, and it’s acceptable.
In the end, Elsaadi said he’s comfortable having his company associated with Coburn and Overshown because he knows them as people. As in all things, life comes down to personal relationships.
“I really haven’t done any research on what (NIL) could potentially mean,” Elsaadi said. “But for use, those are good kids, they like our food, and I’m a fan of their families. That’s why we go ahead and do it.”
As UT football coach Steve Sarkisian said, “Brand is who you are as a person, who you are as a player, who are you as a student. It’s not just who you are or what you put on social media.”
Schwab expects there to be plenty of name, image and likeness stories — both good and bad — one year from now.
“In six months to a year, there’s going to be hard data. That’s going to be the story in recruiting,” Schwab said. “Schools can say, ‘Last year, we had these athletes who did these great things, and just Google it.’
“The success stories and not-so-success stories is going to be the narrative one year from now.”