Competitive advantage? BYU's NIL deal could test limits
A deal BYU has made available to its football players could test how much allowing athletes to be compensated by outside companies for name, image and likeness can be used as a competitive advantage.
Earlier this week, BYU announced Built Brands —- a Utah-based company that makes protein snacks —- will give all 123 members of the Cougars' football team the opportunity to be paid to promote its products.
Scholarship players can earn $1,000. For walk-ons, players who are not on athletic scholarship, the payment can be equivalent to the cost of a year's tuition at BYU, which ranges from about $3,000 to $6,000 per semester.
“This is creative and different,” said Blake Lawrence, the CEO of Opendorse, a firm that works with schools on NIL-related matters from brand building to compliance. “The first-move advantage here for both BYU and Built is very evident.”
BYU's arrangement with Built drew national attention for the joyous celebration it sparked among the players and because it seems to provide the Cougars a way to circumvent the NCAA's scholarship-limit rules. Teams that play in the highest division of college football can only have 85 scholarship players on the roster.
BYU athletic director Tom Holmoe told the AP on Friday that he and football coach Kalani Sitake were searching for a way to provide an NIL opportunity to the entire team, not trying to find a workaround to the scholarship limit.
“The whole mindset wasn’t to try to get a recruiting advantage or anything," Sitake said. “It was just to do what we thought was right and to help the walk-ons on this team.”
But Holmoe didn't refute the idea that this could benefit BYU.
“Are we saying that people in collegiate football these days are not looking for competitive advantages? That’s like the essence of athletics is competitive advantage,” said Holmoe, who played seven season in the NFL with the San Francisco 49ers in the 1980s. “Competitive advantage exists in life. It’s called creativity. You come up with good ideas that give you a competitive advantage.”
To satisfy their contracts with Built, BYU football players must wear a decal with the company's logo on their practice helmets and make at least one appearance at a company event.
Walk-ons are required to make two appearances and promote the company on social media.
Holmoe said BYU did not negotiate the deal with Built Brands CEO Nick Greer, who is a friend of Sitake's, but it was vetted by the school’s general counsel and president.
The NCAA has taken a hands-off and permissive approach to NIL, allowing schools in states that do not have NIL laws to set their own policies. Utah has no law, but the NCAA still does not allow NIL payments to be used as recruiting inducements or pay-for-play.
“There are still, I’ll say, rules,” Holmoe said.
Built Brands is not funding scholarships, but paying athletes directly.
“(The players) don’t have to pay for their tuition,” Holmoe said. “They can do whatever they want with that money.”
For most walk-ons, though, the money can be a game-changer.
“It takes stress off for sure," said Nick Billoups, a walk-on quarterback.
The NCAA lifted its longtime ban on athletes being compensated for the use of their names, images and likenesses on July 1, opening the door for all kinds of endorsement opportunities for athletes.
But rules around what athletes can and cannot do differ from state to state. Some states passed NIL laws in an effort to pressure the NCAA into action and maybe give their schools a competitive advantage over those in states that did not.
Instead, states with laws might now be limiting their schools compared to those that are making their own policies.
The deal BYU helped broker for its players would likely not be permitted under state laws in places like Florida and South Carolina, said sports and entertainment attorney Darren Heitner.
Heitner helped arrange for a Florida gym owner to pay $500 a month to scholarship football players at Miami for promoting his gyms on social media. He said the arrangement at BYU looks like an evolution of that.
“I would expect that we will see more brands and more schools — either in states that allow for their involvement or in states that don’t have NIL laws — try to now duplicate this type of NIL deal,” Heitner said.
Heitner called any competitive advantage BYU might gain from being able to attract a better quality of walk-on player “speculative.”
BYU is an Opendorse client, but Lawrence said the company had no involvement in the Built deal.
The real value for BYU, he said, could be in the attention this deal brought to the program at a time when every school is trying to position itself as the best place for players to take advantage of NIL opportunities.
Even if other schools steal the idea, Lawrence said: “It will always be known as the BYU thing.”