The Legal Blitz
On Wednesday, a familiar scene will play out in high school gymnasiums and coaches’ offices across the country. Millionaire college coaches will stare at fax machines and thousands of fanboys will troll Internet recruiting message boards as teenagers decide where to attend college on National Signing Day.
Signing Day is really just the first day of a two-month period in which football recruits can sign a National Letter of Intent (NLI) to accept a scholarship to play for a given school. As NCAA football has ballooned into a multi-billion dollar business, the amount of attention directed toward recruiting has turned the first day of the NLI period — Signing Day — into a spectacle of ludicrous proportions.
However, in a laudatory effort to capitalize on the attention and dollars surrounding the college recruiting process, several entrepreneurs have launchedcrowdfunding websites to help recruits earn a slice of the lucrative NCAA pie.
With UBooster, fans pledge money to individual recruits of all sports in all divisions. Once a player commits to a college, his or her account locks and UBooster holds the money in a trust, which is then paid to the athlete after they leave college. FanPay is similar, except that it focuses on incentivizing current college athletes to remain in school to graduate vs. trying to entice a high school recruit to select a specific college.
“We feel that there is a potential ‘market’ here where average fans could be engaged, much like they buy a hat or t-shirt as a sign of support, that schools and organized athletic associations are missing — especially at the collegiate level,” explained UBooster CEO Robert R. Morgan, Jr., M.D.
The concept of post-graduation trust funds has popped up a lot recently. The core idea is similar to one I advocated for in support of South Carolina State Senator Marlon Kimpson’s proposal to create post-graduation trust funds for the state’s revenue-generating college athletes. Federal judge Claudia Wilken also proposed creating college athlete trust funds in the O’Bannon case, which the 9th Circuit Court of Appeals overturned.
The idea of crowdfunding in the college sports space is brilliant. In theory, it circumvents NCAA amateurism rules as no payments are made while an athlete is in college. It also allows fans to contribute directly to an athlete since athletes do not see a dime of fans’ normal routine expenditures on merchandise, TV packages, tickets, and concessions.
However, the most pressing problem with crowdfunding is really with high school athletic associations — not the NCAA.
Since crowdfunding is so new, no high school athletic association has offered official guidance on the subject. However, the idea of a high school athlete accepting the promise of receiving a future financial benefit is possibly enough to run afoul of most high school amateurism rules.
For example, in Pennsylvania, the Pennsylvania Interscholastic Athletic Association (PIAA) Constitution, Article II, Section 2 provides:
A student loses amateur status in an interscholastic sport whenever:
- The student or the student’s parent(s) or guardian(s), receives or agrees to receive, compensation, other Consideration, or an award not permitted under Section 3 hereof, for or related to the student’s athletic ability, participation, performance, services, or training in a sport; or
- The student receives Consideration for becoming a member of an athletic organization or school.
The mere promise of receiving crowdfunding dollars in the future is technically a violation of these provisions as the promise of post-graduation dollars falls under the umbrella of “other Consideration.”
For example, last year I represented a Jamaican track star, Michael O’Hara, against the PIAA in an eligibility dispute prior to the Penn Relays. The PIAA revoked O’Hara’s amateur status claiming that the mere future promise of receiving a cell phone endorsement after he graduated high school was enough to forfeit his amateur status. It did not matter that O’Hara had not yet received any money, goods, or services. Instead, the “consideration” was the acceptance of a promise of future payment.
In the end, we reached an agreement to drop the dispute, but the case highlighted that high school athletic governing bodies do not take the potential future payment of its athletes lightly.
Pennsylvania is not alone.
The New York State Public High School Athletic Association prohibits its athletes from “Capitalizing on athletic fame by receiving money or gifts of monetary value” except college scholarships. The Florida High School Athletic Association has an identical bylaw (9.9.2(c)) governing amateurism. California’s Interscholastic Federation actually prohibits an athlete from lending his or her name for “purposes of commercial endorsement” or to a nonprofit organization without CIF consent.
With state after state high school athletics governing bodies protecting amateurism as fiercely, if not more so, than the NCAA, crowdfunding in recruiting highlights a murky area of current athletic association rules.
If a star high school football recruit commits to Penn State on Signing Day and there is $5,000 in his UBooster account, can the PIAA strip that student of his amateur status for spring baseball season simply because he tacitly accepted the promise of money upon completion of college? Possibly, although this situation has not actually played out yet in front of the PIAA or a similar organization.
UBooster is confident that its system would not jeopardize any athletes’ eligibility. As Morgan explained to me in an email:
I’ve not spoken with any high school organization and our efforts are directed at NOT establishing a direct/contractual relationship with any high school athlete in order to avoid having the PIAA or NCAA make an example out of them. That’s unfortunate and a restraint on the freedoms that these young men and women (and their families, depending on their ages) should enjoy. One reason that oppression works — in any form where it exists — is the psychological threats that accompany such a system. People are told they’re not worthy, that they will suffer adverse consequences should they try to break free, or they can’t function in a complex world where they might have to sign documents or evaluate competing contractual offers.
My interpretation of the clause you’ve shared, therefore, is that since there is no contractual relationship between UBooster and these students, there is no consideration in terms of future financial reward. The PIAA would be pursuing a contract that does not exist, which would only serve to highlight its true motives in trying to control the lives of these young athletes. The first time you visit the UBooster site we ask if you are a potential “student-athlete” and provide explicit warning that while we would love to directly interact, that relationship must be established after college in terms of the funds we establish in trust for these students. Is that ideal for UBooster? Of course not. Nor is it for any other company that could directly engage and provide mutually beneficial services with these young men and women. Those companies, however, are committed to operating within the confines of the arcane rules established by the PIAA and/or NCAA.
However, until individual high school governing bodies or the National Federation of State High School Associations weigh in, it is likely in a recruit’s best interest to send a letter to the crowdfunding site or post directly on the site that he or she does not wish to accept or discuss terms of receiving the funds until after he or she is done competing as an amateur.
“So long as the athlete does not accept the money or solicit the fundraising effort, I do not see how they can be responsible for what a third party does without their consent or permission,” said attorney Paul Greene of Global Sports Advocates, who has devoted his career to protecting athletes’ rights. “I do think they should instruct the crowdfunders to remove them as the beneficiary once they are made aware of the effort. Beyond that, what else can they do? They could post something on social media asking people not to set up a site for them. That shows they were trying to prevent it from occurring.”
Greene’s advice is similar to that of the NCAA. In 2014, the NCAA issued an “educational letter” about this topic. In it, the NCAA advised athletes already enrolled in college as follows:
Once a student-athlete, institution or conference becomes aware that the use of the student-athlete’s name or picture are being used by a crowdfunding entity, the student-athlete or institution or conference acting on behalf of the student-athlete, shall take steps (e.g., cease and desist) to stop the use of the student-athlete’s name or picture. Further, a student-athlete should not take any action indicating intent to accept funds after exhausting eligibility.
Once the student-athlete accepts the promise of pay, the student-athlete has jeopardized his or her eligibility for intercollegiate athletics, even if the funds will not be disbursed until after completion of his or her intercollegiate athletics participation.
Although crowdfunding high school recruits is still in its infancy, it is a clever and commendable way of trying to provide fans with a tool to directly help a student while also providing a platform for college athletes to reap some monetary rewards for their hard work.
However, until a governing body or a court of law determines how crowdfunding impacts amateurism, recruits should proceed cautiously and take steps to protect themselves.
For their part, UBooster and other crowdfunding sites looking to “disrupt” the traditional confines of unpaid college athletics do not seem afraid of taking on the seemingly ironclad tradition of keeping monetary rewards away from athletes.
“We are not willing to fall in line,” Morgan said. “We are committed to the athletes. It remains our long-term goal for the PIAA, NCAA, and the schools themselves to evaluate crowdfunding for its merits in helping offset the expenses they face while providing financial support during and after college. . . Rather than fight the future to the bitter end, we hope that these organizations will consider innovative approaches, aimed at newer generations of fans, that can provide a ‘win-win’ for the athletes as well as the schools and organizations to which they belong.”