[StanfordMatt]

(As I understand it, the $22M cap doesn't include what we call NIL at this time.  Canady's NIL is not being paid by Texas Tech.)

Ok, let's dig into this further because there are multiple issues at play.

First, it is correct that Canady's NIL is not being paid by Texas Tech because the NCAA currently prohibits member schools from paying players directly.

The wild west aspect of NIL that has people up in arms is the fact that only a small fraction of the dollars that have been paid to players under the guise of "Name, Image and Likeness" have truly been disbursed for these purposes (e.g. Jimbo's Ford paying Johnny Football $1,000 to do a local commercial). The vast majority of NIL dollars have been paid via collectives that are de facto "pay for play" deals.

For this reason, collectives and athletic departments have been inextricably linked from early on in the NIL era and you've seen AD's openly campaign for donors to contribute to collectives associated with a particular program. Mr. AD doesn't care about Jimbo's Ford paying Johnny Football to do a local commercial but you better believe they want to know what's going on when those checks serve as the primary inducement for a star QB or pitcher attending their school.

When the NCAA has tried to step in and police the line between "true NIL" deals and pay-for-play, they've been shot down (see cases filed by attorneys general of VA and TN). What the courts have said, and I personally find to be a compelling argument, is that it's an impossible line to demarcate. There is simply too much gray area.

When the House settlement was first announced, it was a boon for former players who would become eligible to receive a share of billion dollar pie of damages. There was also a benefit for the NCAA and schools, however, in that it was supposed to rein in the wild west aspect of the NIL world and set real caps on spending on players that would be paid directly by the schools (anticipated to be roughly $22 million initially and grow over time). Immediately, collectives affiliated with major athletic programs began to shut down because they were viewed as an unnecessary middle man if schools would be processing payments themselves (most notably, Alabama shut down its collective "Walk of Champions").

Fast forward to September when Judge Wilken unexpectedly rejected the initially proposed House settlement for a couple of reasons, most notably her view that it gave the NCAA too much power to police what is and is not "true NIL." So the NCAA and attorneys went back to the drawing board to rework the settlement agreement. Just last week, Judge Wilken accepted the revisions and granted preliminary approval.  While I do not believe details have been released, presumably the NCAA will have minimal authority to arbitrate NIL deals.

TLDR, yes, it is possible that high powered donors will still funnel money to star players outside of the scope of a school's athletic department in a post-House world. However, I anticipate AD's will do everything in their power to bring everything in-house and under the school's control. I don't see collectives that are affiliated with a single school playing much, if any, of a role going forward. Only a tiny fraction of athletic departments will have enough cash in excess of $22 million to be looking for ways to circumvent the revenue sharing cap. If Alabama is shutting down its collective, that should tell you all you need to know.

[StanfordMatt]

(As I understand it, the $22M cap doesn't include what we call NIL at this time.  Canady's NIL is not being paid by Texas Tech.)

Ok, let's dig into this further because there are multiple issues at play.

First, it is correct that Canady's NIL is not being paid by Texas Tech because the NCAA currently prohibits member schools from paying players directly.

The wild west aspect of NIL that has people up in arms is the fact that only a small fraction of the dollars that have been paid to players under the guise of "Name, Image and Likeness" have truly been disbursed for these purposes (e.g. Jimbo's Ford paying Johnny Football $1,000 to do a local commercial). The vast majority of NIL dollars have been paid via collectives that are de facto "pay for play" deals.

For this reason, collectives and athletic departments have been inextricably linked from early on in the NIL era and you've seen AD's openly campaign for donors to contribute to collectives associated with a particular program. Mr. AD doesn't care about Jimbo's Ford paying Johnny Football to do a local commercial but you better believe they want to know what's going on when those checks serve as the primary inducement for a star QB or pitcher attending their school.

When the NCAA has tried to step in and police the line between "true NIL" deals and pay-for-play, they've been shot down (see cases filed by attorneys general of VA and TN). What the courts have said, and I personally find to be a compelling argument, is that it's an impossible line to demarcate. There is simply too much gray area.

When the House settlement was first announced, it was a boon for former players who would become eligible to receive a share of billion dollar pie of damages. There was also a benefit for the NCAA and schools, however, in that it was supposed to rein in the wild west aspect of the NIL world and set real caps on spending on players that would be paid directly by the schools (anticipated to be roughly $22 million initially and grow over time). Immediately, collectives affiliated with major athletic programs began to shut down because they were viewed as an unnecessary middle man if schools would be processing payments themselves (most notably, Alabama shut down its collective "Walk of Champions").

Fast forward to September when Judge Wilken unexpectedly rejected the initially proposed House settlement for a couple of reasons, most notably her view that it gave the NCAA too much power to police what is and is not "true NIL." So the NCAA and attorneys went back to the drawing board to rework the settlement agreement. Just last week, Judge Wilken accepted the revisions and granted preliminary approval.  While I do not believe details have been released, presumably the NCAA will have minimal authority to arbitrate NIL deals.

TLDR, yes, it is possible that high powered donors will still funnel money to star players outside of the scope of a school's athletic department in a post-House world. However, I anticipate AD's will do everything in their power to bring everything in-house and under the school's control. I don't see collectives that are affiliated with a single school playing much, if any, of a role going forward. Only a tiny fraction of athletic departments will have enough cash in excess of $22 million to be looking for ways to circumvent the revenue sharing cap. If Alabama is shutting down its collective, that should tell you all you need to know.