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Richard Helppie
Hello. Welcome to The Common Bridge. I’m your host, Rich Helppie, and we are going to continue our reporting about the new legislation and the rules around Name, Image and Likeness as it pertains to collegiate sports, and we have with us today Mr. Thomas Dieters. Tom, good to see you. Thank you for joining us on The Common Bridge.
Thomas Dieters
Thank you for having me.
Richard Helppie
Now you’re the president of the board of the Charitable Gift of America. You’re involved with the College Football Players Association, and you’ve worn many hats over time. Maybe it’s a great opportunity to just introduce yourself a little bit to our audience. Where were your early days spent, and what was your career arc like, and what brings you to this point today?
Thomas Dieters
Okay, well, I grew up in Rochester Hills, right here in Michigan, and played baseball at Michigan State, went on actually to go back to Michigan State and work in their gift planning office, before the University of Miami hired me as our executive director of gift planning. And then in 2011 I created Charitable Gift America, a public 501-c3 charity to work with literally hundreds of charities around the globe, helping them find new revenue streams. We’re a grant maker. Last fiscal year, we granted out more than $10 million to organizations all over. Fell into the NFL stuff about three, four years ago, when it started. We have several funds at Charitable Gift America. When I learned about how collectives could start - we’re not a collective, we’re more of a cooperative - I created a fund for Michigan State University, where we would collect money, contract with ball players and go from there. Now what happened? We must have done a pretty good job, and it spread around the country. We now have over 20 different universities that have funds with us, and we’ve written more than a thousand NIL contracts around the country.
Richard Helppie
I’ve seen that collectives are one of the elements of NIL and the way I understand it - correct me if I’m wrong - that it’s a way to gather money at one end of the pipeline, it goes through this NIL process and ends up in the hands of the bank accounts of college athletes. That’s what a collective does, basically.
Thomas Dieters
That’s correct. Now there was the House vs NCAA settlement recently that really ended these collectives out there. The universities were then allowed - what they say - to bring the collectives in house, because they can now have revenue sharing. The revenue that the universities bring in, they’re now allowed to pay up to 20.5 million dollars in these contracts themselves. Reality is, all the schools did, they didn’t bring the collectives in house, they just brought the money in house because they wanted the control over the money. The collectives pretty much disappeared, but now the schools get the money and they can control it.
Richard Helppie
Would the donors to the collectives then be obligated to donate to the university, or did the university lose their funding while they took control of the collectives?
Thomas Dieters
Well, nobody’s obligated to give anything as a donor. But what some schools are doing - they’re certainly doing it here in the state of Michigan in East Lansing - they’re allowed to share the revenue they get from TV, ticket sales. However, they generate revenue up to 20.5 million dollars, so now, when a donor gives, say $5 million - I’m just making up a number - to the school for an NIL, what some schools are doing is reducing their expense by $5 million and now they’re only going to pay 15.5 million dollars. They’re really not adding to their programs or enhancing anything like philanthropy should do, they’re just trying to reduce their cost.
Richard Helppie
Yes, I see. When I look at this NIL - and I’m not well schooled in it - here’s the takeaway I get. Let’s look at a football team, because that’s generally where most of that money goes. On the field on the same day you can have players there that have very rich NIL deals, into the millions and millions of dollars, and some with lesser NIL deals. Then you have those players that are scholarship players, now there’s no cap on scholarships, is my understanding, but there’s a limit of 105 players on a football team, which is down from, I guess, 140. Scholarships went from 85 to 105. And there are also players there that were walk-ons. They’re not getting a scholarship. They’re not getting NIL, they’re just student athletes playing the game. First of all, do I have that part right?
Thomas Dieters
Yes, almost entirely correct, the one part is. Now the scholarship is gone. Now they’re just being offered compensation.
Richard Helppie
Oh, okay, so it’s cash that they can go use to buy tuition?
Thomas Dieters
Well, okay, let’s say, for example here, in-state tuition - I won’t get into out of state - say it’s $30,000 to go to Michigan and Michigan State for an in-state student. If the school wanted to offer them a full ride, they would be giving them a full ride, but it would count as $30,000 against their 20.5 million dollar cap.
Richard Helppie
I see, okay, so it’s a pool of money. This is the thing, I’ve looked into the University of Minnesota, another Big 10 school, and they’re saying, we don’t know how we’re going to fund this 20.5 million. So they’re going to add charges for every student. Every semester they have to contribute, as part of their registration process, money into this NIL fund. And then there’s other money that comes from tax supported sources into places like Michigan State, University of Michigan, University of Minnesota, that flow in to the universities that’s going out to pay athletes. I’m trying to understand what’s the public interest in that?
Thomas Dieters
Well, that’s a very good point that you’re making. And I would say a school that is charging an additional athletic fee, or something like that, to the whole student body to pay for this, they’re not being creative enough in generating new revenue for their department; they’re having the students on campus pay for that. I don’t think it’s a great strategy, but some schools are doing that. I just wonder if you’re a student paying this fee and you don’t necessarily care about sports, how you going to feel about going to that school?
Richard Helppie
There are lots of reasons to choose a school. You like their medical school, you like their political science department, you like the fact that it’s in-state tuition for you. I mean, there’s a whole host of reasons why a young person or a family might choose a particular school, but to have to pass through a fee gate [funds] to go to a football player, and they have no interest at all in football, I’m struggling to see why a state legislature would allow something like that.
Thomas Dieters
Well, schools generate revenue in all sorts of different ways. Fees are one of them. Some of them own enterprise zones; they might own a strip mall across the street and that revenue comes into the school. Just because they’re an educational institution and a nonprofit organization doesn’t mean that they can’t generate revenue any which way they want. So there really isn’t anything stopping them from charging those types of fees.
Richard Helppie
Look, let’s use the example of a strip mall. Let’s say that there’s a convenience store in the strip mall. I can choose to be a customer for that store in the strip mall. I can decide to pay their price or not pay their price. But if I’m a student at the school, I don’t get a choice. I don’t get to check a box and say, yep, I’m willing to send money off to a football player. I’m just wondering what lobby allowed something like this to happen, and what do we know about state legislatures or federal regulations that might try to clean this up a little bit?
Thomas Dieters
As far as I know, there aren’t any state or federal lawmakers that are doing anything to prevent that or stop that. In fact, they’re trying to do just the opposite and help the universities bring in more money to pay these players.
Richard Helppie
Are you familiar with House Bill 4643? (Thomas Deiters: Yes.) Okay, my understanding of that, a quick read of it, it’s purported to prohibit limits on any athlete’s right to enter into any contract they want to enter into. Can you help our audience understand what the purpose of that was, what wrong they’re trying to right, or what barrier they’re trying to relieve?
Thomas Dieters
Absolutely, and I think that’s an important bill that I feel is a bipartisan issue. On a university campus, there isn’t a student, a faculty member or a staff member that has a limit on the amount of money they can make, only an athlete does. The current law in the state, Michigan prohibits putting a cap on student athlete compensation. So if they got 20 different NIL contracts making $100 million, they certainly can do it. But now the NCAA is saying, no, we’re putting a cap on this. This bill says no, this is about free markets and states rights, and these kids should be able to earn as much income as somebody wants to pay them. That’s what that’s about.
Richard Helppie
Okay, so the careful balance that they purported, careful balance that they’ve tried to put in on this, you’re saying we don’t need any of those guardrails. We just need to let the free market make a choice and pay the athletes whatever the market will bear currently.
Thomas Dieters
Yes, I am saying that. Am I saying that’s a perfect world? Not necessarily. But the way things are today, there is no collective bargaining agreement between the management - meaning the schools or maybe the league or the NCAA, with whoever you want to do it - and the labor, which is the athlete. It eventually needs to get there. There needs to be both sides agreeing to something, and then you could have a cap to maybe level the playing field somewhat, but you can’t have one party saying you have a cap. This is all you’re going to make. That’s why the NCAA just lost the House case and and agreed to pay $2.8 billion. Then they turned around saying, Yeah, we lost, well, we’re going to continue to do that, unless there’s a collective bargaining agreement. Then the students should be able to make as much money as they can get somebody to pay.
Richard Helppie
So a collective bargaining agreement would be maybe akin to the NFL player association, Major League Baseball player association, National Hockey League player association, NBA got their player association. They would have boundaries, that the employer - in this case, the university - versus a professional sports team, would be able to do with the athlete; minimum payments and the like.
Thomas Dieters
That’s exactly correct. And to your point, it’s not like this hasn’t been done before. Every league that you just mentioned has already done it. There’s a blueprint, copy paste, and get the players organized, get a collective bargaining agreement in place, and go forward. The problem is the universities and the leagues, and the NCAA, the administrators, coaches, they’re in no hurry to fix this, because they themselves are making seven and eight figure contracts, so they think everything’s pretty good right now.
Richard Helppie
I would contrast that with a golfer, a non-revenue sport - a golfer, a diver, a wrestler, tennis player, gymnast, whatever - at a university of any size they’re not going to make any money, because the sport doesn’t make any money. That’s a sharp contrast with the NFL Players Association, where you have for-profit professional teams, trying to make a profit, and then the labor - which isn’t subjected to rules like academic eligibility, for example, or restrictions on transfer portal - is making their best case. I’m trying to understand how you could define who’s eligible for that players association, given that there’s so many that don’t contribute on the revenue side.
Thomas Dieters
Well, all good points. I will say this, when I started the This is Sparta NIL Fund at Michigan State - we are 100% donor directed, we’re not a collective - we have people, all sorts of people, that give us money, and they tell us which sport they want the money to go to for NIL. As a result of that, we had 12 different teams at MSU under contract, including football, but we had men’s and women’s golf, we had men’s tennis, we had gymnastics, we had women’s soccer - 12 different teams. In fact, 60% of our contracts were for female athletes, so they were getting money because that’s what the donors wanted to support. Fast forward to today, and with this cap of $20.5 million, the school now is paying it out. They’re forcing that money into basically football and men’s basketball. Let’s face it, that’s about it. Okay, maybe women’s basketball gets a little bit. Maybe hockey gets a little, but very little. It’s mostly men’s basketball, men’s football, obviously men’s football. But what that has done for all these other sports that you just mentioned, all those kids we had under contract just lost all their contracts because they are forcing it all into those sports. Where if they didn’t have a cap, then more people can give, and more students would benefit from it.
Richard Helppie
Could a person giving to a collective give it to a specific athlete? Say there’s an up and coming golfer, and say, I want that young woman to get this check. Is that legal, that they could give it to the collective and specifically have it earmarked for a specific athlete?
Thomas Dieters
There are two answers to that. When you walk into the athletic department to give them a check for the next Tiger Woods, they’re going to say, thank you for your money, we’re going to give it to the quarterback. Now, could the collective do it? Probably not, because the collectives really want to try to do what the school wants them to do. However, Charitable Gift America is absolutely unique in that regard, where we’re 100% donor directed, and we do whatever the donor tells us to do. So yes, we have had... I don’t really like it, but I understand it. There have been a couple of occasions where people have donated money to our fund, the cooperative fund, and said, I want Johnny Smith to get this contract and we have done it. There’s nothing preventing anybody from doing that.
Richard Helppie
It’s kind of back to the old days of the local Chevrolet dealer who was giving cars away to athletes that they wanted to attract, and that was supposedly not within the bounds of the rules. But now this is formalizing that. And then there have always been scholarships that you could sponsor. I want to sponsor a scholarship for wrestlers, for example, and it would be to support their academic costs while they were a wrestler. Tom, as I’m listening to a lot of this about NIL, it just strikes me that the big revenue sports - men’s football, men’s basketball - get, I believe, 90% of the NIL dollars. Like, 5% goes into women’s basketball, and 5% goes someplace else, but most of it is in men’s football, men’s basketball, the big revenue sports, the big TV contracts and the like. Wouldn’t it make sense for these major colleges just to look at that and go, look, we’ve got a pro league here. Let’s cut it loose from academia. Let’s own it the way we own that strip mall across the road, and we’ll take a interest in the equity of the football team. But those aren’t student athletes playing anymore. We’re going to license them the Spartan logo, and we’re going to rent them the stadium, but it’s a for profit entity. Go get your players, wherever you can get them, and charge whatever you can charge, and we hope you make a profit for it. Wouldn’t that make a lot more sense?
Thomas Dieters
Well, that’s exactly what they’re doing. They’re just not admitting it, but that’s exactly what they are doing.
Richard Helppie
Because right now it’s the best of both worlds for them. They’ve got the taxpayers money in, they’ve got forced collection from a student body when they want to do that, and they’re getting to scrape the profit but effectively socialize any potential risk. That just doesn’t seem right. It seems like there should be a breakthrough idea, because we’re not going to put the genie back in the bottle and have the amateur status that college athletes once strove for.
Thomas Dieters
You’re absolutely correct. It is a professional sport when kids are making seven figures. It’s a professional sport currently, and it’s always been this way. These universities are nonprofit organizations. There are no shareholders that own a university or an athletic department or a football team, and so there are no dividends to be paid out to the shareholders. But what’s happened is there’s so much money pouring in now, where that - I’ll just call it a dividend, whatever you want to call it - is going is to the coaches [who are] making seven and eight figures, to athletic directors making $2 million a year, to other administrators and coaches making millions of dollars. That’s where it’s going, and they’re doing it off the backs of these players. Now we have over a thousand different contracts out there and I will tell you, yes, you’re absolutely correct, most NIL deals, most of the dollars, are going to football and men’s basketball, no doubt about it. But if you look at just the individual contracts across the country, you’ll find out really quickly that most of them are not your big, multi-million or hundreds of thousands of dollar contracts. But that’s all you hear about, you just hear about the million dollar one, the $500,000 one, but most of them are well under $100,000. Some are $5,000 and that includes football players who will get a $5,000 contract. That walk-on that you referred to before, now they’ve got to pay tuition so $5,000 makes a big difference to them. A baseball player, baseball only has ten scholarships and there are 30 some guys on the team, so almost all of them are paying their own way through school. A $10,000 contract to one of those kids is a big deal, and most contracts are in that much smaller range, and are really beneficial to these kids. But you don’t hear those stories, because the story that the media wants to talk about is the $10 million quarterback.
Richard Helppie
I think you make a valid point there that it benefits the few players that are going to be those marquee names. We’re already seeing the, I think disturbing, tale on that trend, now you’ve got high school players trying to position themselves to get NIL money, switching schools, trying to get the right exposure so they get to the right university for the right NIL deal.
Thomas Dieters
That’s right, and it starts at a young age. Again, I can’t say it enough, at the college level what fans don’t like is the kids moving from school to school every year. They don’t mind that they’re getting paid. They’re used to athletes getting paid. We’ve seen that our whole lives, but they don’t like that the kids here one year, they’re somewhere else the next year. That’s horrible for those kids academically, they’re never going to be able to graduate when they’re transferring around that much. But the students didn’t make these rules, the adults did. So this is professional sports under any definition. These are employees. They just are employees, and they need to be organized to get a collective bargaining agreement in place. Now I have heard, how can you organize these kids when they’re only there three or four years? Well, what’s the average career in NFL? Two, three years? It can be done. It has been done, and there’s no reason why it can’t be done at the college level, with one big exception, the administrators and coaches, they complain about it. They’re not in a big hurry to fix it.
Richard Helppie
What does the fix look like? If you had the ultimate authority, the ultimate power, you were the czar of college sports, what would it look like?
Thomas Dieters
Well, let’s start with the Big 10 since we’re in Big 10 country here. If I were commissioner of the Big 10, I would make all of these kids employees and have a collective bargaining agreement with the Big 10. And if you get a good agreement there - which, I mean, it would have to be or you wouldn’t agree to it - that would give every Big 10 school a recruiting advantage over the rest of the country, and then they would follow suit. I don’t think you could do it at the NCAA level, too many different interests. You can’t have University of Michigan playing under the same rules as, say, Western Michigan, they’re just different animals - no pun intended.
Richard Helppie
Good one. Under this plan, a swimmer entering college would join the Big 10 athletes association. How would that union get voted in?
Thomas Dieters
Like any other union at any other business. Labor would have to vote on becoming represented by a particular union. It’d be the same thing.
Richard Helppie
Let’s take this swimmer that wants to swim for a Big 10 school, and the school says, if you’re going to come to this Big 10 school, you’re going to get a minimum payment. But this is the next swimmer that is good for ten Olympic golds and maybe says, I don’t need the union, I don’t need the cap. How are you going to get the big athletes that are making these big monies into the union? Isn’t that what it’s going to take to make a union viable?
Thomas Dieters
Yeah. I would assume part of the collective bargaining agreement would, again, skew more money towards the revenue producing sports, which is men’s basketball and football. Those sports are going to be able to get bigger contracts. The other sports are going to get much smaller contracts, but everybody would agree to it, and at least they’d have a contract. It could be, say, a three year contract or a four year contract with a buyout. So that swimmer could have a three year contract with the school, and the school would have to live up to that contract. If they decided to transfer to another school, there would be a buyout, so the school would recoup some of their money. But it wouldn’t be as much as say, the quarterback. And even that next Olympic swimmer that’s going to win 20 gold medals, they’re still not selling seats in the aquatic center, so they’re not valuable financially to the school while they’re there, but they certainly are when they’re in the Olympics and they’re wearing their school hat. In fact, I just saw last week and the weekend before, Brooke Biermann, women’s golfer for Michigan State. I think she came in second place, or did really well in the US Amateur golf tournament. For three hours on TV, you saw the MSU gear on this young lady. That’s a big advertisement for that school. You probably wouldn’t even had to have paid her. I doubt that she’s even on a full scholarship. Maybe she is, I doubt it. There’s value in these other sports, but not like there is with football.
Richard Helppie
From the young woman that is golfing and giving the university all that exposure, if that drives sales of MSU logo gear, it doesn’t come back to her, it just goes into the general receipts of the university for licensing, correct?
Thomas Dieters
That’s correct. That’s where they are now, you’re absolutely right. But with this cap that the NCAA has put in, that’s exactly what happens. But why shouldn’t - whether it’s a male or female golfer, it doesn’t matter, and they get on TV - they be able to get more deals or get paid more? If they do, it hurts the football team’s cap. That doesn’t make sense to me.
Richard Helppie
Thomas, a fascinating time of life for intercollegiate athletics. There’s obviously lots of diversity. It’s not like a football player and a swimmer are equal in the economic scheme of things. It’s a sad day, but it is the way it is. Bring us home here, any closing thoughts, or anything we didn’t talk about today that are important for the listeners, the readers and the viewers of The Common Bridge to know about?
Thomas Dieters
I think to bring it really home, close to home here in the state of Michigan, there are two bills that have been introduced. One you mentioned already was introduced by Joe Tate, and that is to amend the current NIL laws. Currently, I think I mentioned it earlier, the current law in the state of Michigan prohibits any school from limiting a student from making money. So every school that’s following the NCAA’s so called rules with a cap is breaking the law in the state of Michigan. If this can pass, also included in that bill is the NCAA or any other governing body for athletics would have no jurisdiction in the state of Michigan. So the schools - mostly Michigan, Michigan State - would certainly have a recruiting advantage over the neighboring states in their competition if we can get this bill passed. The other one was with Carrie Rheingans, the state rep from Ann Arbor, allowing these students, student athletes I should say, to be employees. So they kind of go hand in hand, although I think the latter bill is going to take a little bit longer to get through, maybe a little more partisan, but really, they do go together. I think it’s inevitable that they’re going to be employees. I don’t know how they’re not. The only thing that’s going to, I don’t want to say fix the situation because, again, what’s wrong with it - everybody’s making a whole lot of money, athletics is very popular right now. It’s generating billions of dollars so it’s not broken. But I think everybody would agree, including the athlete, that something needs to be done about transferring room. I don’t blame these kids one bit, even if it’s a swimmer that’s doing really well. If Stanford calls them the next week - I’m not picking on Stanford, just throwing a name out there -
Richard Helppie
Got a great program.
Thomas Dieters
They do... and says, Well, geez, we’ll give you $100,000 if you’ll come here. Even if they love swimming at their current school, they’re not going to turn that down. I wouldn’t blame them. They have to do it. So there needs to be some structure, and the only structure I see that’s going to help the situation would be a collective bargaining agreement.
Richard Helppie
Well, Tom, maybe we’ll check in with you in about a year, 18 months, and see where things stand. I don’t know what it’s going to look like. I just feel it’s going to look different.
Thomas Dieters
Nobody knows.
Richard Helppie
Thanks so much for joining us. We’re talking today with Tom Deiters about the NIL and intercollegiate sports, specifically the labor angle. With our guest, Tom Deiters, this is your host, Rich Helppie, signing off on The Common Bridge.
