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Today I was startled to learn about endorsement deals for high school athletes

The New York Times has a story today about Jaden Rashada, a star high-school quarterback who initially committed to play college ball at Miami. Part of the commitment involved endorsing a company called LifeWallet via an NIL contract:

Three people with knowledge of the negotiations said that LifeWallet eventually reached a deal to run through Rashada’s senior year of high school — with the contract consummated in California, where, unlike in Florida, NIL payments to high school players are legal. But the promised dollar figure was closer to $500,000.

Wait. NIL deals are legal in California for high school athletes? Yes indeed. In fact, we were the first to allow them—though the rest of the country caught up pretty fast. If this map is correct, high school athletes can now sign NIL deals in more than half the states:

I suppose none of this should be a surprise. Hell, Shirley Temple earned something like $6 million¹ in merchandise royalties before she was ten. And if Twentieth Century-Fox and MGM could compete for her services, why shouldn't Miami and U of Florida compete for Rashada's?

I haven't really figured that out yet, actually. In any case, Rashada ended up switching his commitment to Florida, but its booster group promptly reneged on his NIL deal. He's now committed to Arizona State, where he's reported to be receiving nothing (yet).

The moral of this story seems to be that Rashada pretty much got screwed by all the adults involved in this, but he's a good kid and will probably be OK. Maybe even rich someday.

¹That's in 2023 dollars, of course.

26 thoughts on “Today I was startled to learn about endorsement deals for high school athletes

  1. bebopman

    Considering a lot of these guys will never make it into the (official) pros, I don’t mind them getting a little something *before* they blow out their knees.

  2. Jasper_in_Boston

    Wait. NIL deals are legal in California for high school athletes?

    By "legal" I assume you mean "eligible to play on high school teams"?

    Obviously California couldn't law couldn't prevent a willing celebrity (even a high-school aged one) from receiving money from a willing advertiser, right?

  3. JimFive

    What I don't get is why LifeWallet is involved in the University negotiations. If they wanted to hire Rashada they could. How (and why?) does the university coerce the company to hire Rashada?

  4. D_Ohrk_E1

    Last spring, the NCAA took time (or maybe wasted everyone's time) to remind schools that monetary inducements were still illegal in the bylaws, yet seemingly had no bite to their threats. Late last year, the NCAA issued a new bylaw stating that any allegation re NIL-related inducements would start from the presumption of guilt. That followed with ramped up staffing of its enforcement team.

    What Florida (their boosters) did was straight up offer cash to sign -- an inducement. Miami's boosters (at least one of them, anyway) has openly talked about paying players to sign with Miami.

    No one can explicitly connect the dots, but that Rashada's NIL deal fell through after being made public and after the NCAA issued a new bylaw, might be tied to each other.

    Why did Rashada sign with ASU?

    The Athletic says he did it without an NIL deal, which makes it all the more curious. Most people still think the NCAA will hit ASU hard after a dossier landed in their laps in 2021 showing widespread recruiting violations during COVID restrictions. All of last year, coaches were fired or resigned because of all the public stories.

    The kid may not come out okay. There are a lot of adults in the business operating on bad faith.

  5. Atticus

    The NCAA needs to figure out how to control this NIL madness. As expected, it's turned into a free for all and essentially it's just universities (or, more accurately, their boosters) paying for their student athletes.

    1. limitholdemblog

      Nothing stops colleges from turning football and basketball into nonrevenue sports. But as long as they are making tons of money, it's totally unfair to prevent the kids who produce that revenue to making money off their labors.

      1. realrobmac

        I'm not sure what "non revenue" means in this context. The money made from these programs goes to support the programs and to fund other athletics. The programs don't exactly turn profits, even at the big schools. If they did there would be no need for boosters or private NIL deals.

        The fact is, people love college sports and are willing to pay lots of money for them. It's a strange American tradition, I admit, but I don't see that changing, and as long as the money is flowing, I agree that it is right for the kids to get paid. But that doesn't necessarily mean that unrestricted NIL is in anyone's best interest.

        1. limitholdemblog

          Nonrevenue means the way other sports are managed: standard faculty salaries for the coaching staff and administration, no special television deals, nominal sponsorship deals, little interruption of curriculum (no more Tuesday Night ESPN games!). Basically no attempt to run an operating profit.

          And yes, the programs turn huge profits, properly measured. Administrator and coach salaries are gigantic, and the money is poured into such things as lavish facilities which then cause them to claim operating losses. They also bring in massive donations. The cross-subsidies are pretty modest but even so, there's no justification for why a football player should be compensated below market value just so his labor can be stolen and given to the water polo team. If a college wants to run co-curricular activities it can just run them.

    2. rrhersh

      So what? This is a serious question. What about this needs to be controlled? Is it that the athletes are getting more of the available money than you want them to? That they are getting any at all? Or that they are being paid in an unseemly manner?

    3. Five Parrots in a Shoe

      Why shouldn't universities pay their athletes? Teenage tennis players and gymnasts make millions. Why shouldn't football and basketball players?

      Purdue's teams are called the Boilermakers because, back in the 1920's, some of Purdue's star football players were in fact boilermakers from town. They weren't students. Purdue just payed them to play on the football team. That was allowed back then. We would all be better off if we returned to those rules, with a salary cap.

      1. aldoushickman

        "We would all be better off if we returned to those rules, with a salary cap."

        I mean, for certain extremely narrow definitions of "all," maybe. Like, if you draw the circle around children-who-might-be-able-to-make-a-career-out-of-sportsball-and-are-better-off-doing-that-than-studying-and-going-into-some-other-profession, their parents, and I guess talent agents who scout/prey on children, then sure, paying those kids is a great idea. If it gets more children to play football, it increases the customer/revenue stream for head trauma specialists, too, so maybe folks like that should also be included in the group of beneficiaries.

        Not sure how it benefits the rest of us. Esp. since this country's ridiculous obsession with college sports leads to bloated and useless spending on non-academic aspects of universities (example: the highest paid state employee in most states is a coach. Not a civil servant, not a professor, not a surgeon at a public hospital, not even a *sports* medicine practitioner, but a *coach*). Which is fine--we're a rich country, we can spend hundreds of millions dumb, fun things--but further professionalizing school sports doesn't seem like the place society should be spending its resources.

        1. Five Parrots in a Shoe

          "further professionalizing school sports doesn't seem like the place society should be spending its resources."
          I am not suggesting we need to put *more* money into NCAA football or basketball. You are correct in pointing out that the highest paid state employee in 40-or-so states is a college football or basketball coach. If we just shave a couple million off that salary then we can pay the football players $40k/yr, which is about what G-League basketball players make. A reasonable salary for minor league sports which - let's be honest - is exactly what NCAA football and basketball are.
          Big-time college sports are money spinners, and traditionally coaches and athletic directors have positively bathed in that money, while carefully keeping it away from the players whose efforts actually generate it. I'm saying that system needs to change. I'd like to kill off big time college sports entirely, but that's just not going to happen in America. I'll settle for seeing the players get paid.

  6. limitholdemblog

    The problem is that people are making money, lots of it, on youth sports. I frankly think in general society is way too cavalier about profiting off kids' unpaid labor. For instance, the kids in the National Spelling Bee should get paid. So should the kids in the Little League World Series. These things make lots of money, and the untalented and unimportant adults who run them are stealing the money from the participants whose labor is the only reason these things are popular.

    So I don't see a problem here. If you want to run high school athletics as a totally noncommercial, nonrevenue activity, fine. But that means no television contracts, no more than nominal sponsorship money, no endorsements from athletic apparel companies, etc. Just run the thing for the benefit of the kids with no adults making big bucks.

    But what you should never do is make a big profit on these things but try and prevent the actual laborers, the kids, from sharing in the bounty.

      1. limitholdemblog

        The existence of the Coogan Act shows that it isn't difficult to do.

        Talented kids get paid for stuff already.

  7. golack

    Black Sox scandal.

    I have no problems with NIL contracts--though there has to be some regulations. We can't have the people paying for the athlete to dictate how the game is played. And we have to be careful about incentives for making it through the playoffs. You can't have a minor player being paid to "hard foul" the opponents best player.

    The biggest issue for the coach might be resentment among the players not getting NIL contracts. Great quarterbacks have great offensive lines.

  8. Perry

    OT -- Kevin, Bob Somerby is allowing someone to spam his comments with a single word (such as "lambs") repeated over and over hundreds of times, filling the blog comments with lengthy but meaningless spam. It interferes with actual discussion due to the scrolling required, which I'm sure is the intent. Somerby says he doesn't read his comments. I do not have any way to reach him, since he does not have any contact info on his blog. Can you let him know this is happening and ask him to weed out this spam? Thank you for your help.

  9. samgamgee

    Past time to remove competitive athletics from schools. It warps the purpose and function of the schools. To the point that folks actually believe athletics benefits schools more than degrade.

    If someone wants to have a career in sports, then they should have a path via private clubs and not pretend their have academic asperations. Unfortunately, the sports entertainments industry is making too much money leveraging the academic institutions as a proxy for what should be private enterprises.

    1. Five Parrots in a Shoe

      The NBA is taking baby steps in that direction, by allowing some teenage basketball phenoms to play in the G-League as a stepping stone to the NBA, and bypassing the NCAA altogether. Most American NBA players are still getting there via the NCAA, but not all. This is a start.

    2. realrobmac

      I doubt this will ever happen. University athletic traditions are just far too meaningful to too many people. A lot of these programs and rivalries go back well over 100 years. And in many ways people have a much closer and more literal connection to their favorite college than to their favorite pro team. There are many more colleges for one thing so the chances of a college being near you are much greater than a pro team. Alabama, for example, has basically no pro teams of any kind. Also college teams will never be able to threaten to move in order to extort billions from their host cities.

      And of course you may have actually attended your favorite college, giving you a strong, life-long connection to that institution.

      Also the college game (speaking mostly of football because that's all I really follow) is just fun in a way that the pro games can never be, partly because the teams make crazy mistakes that keep the games unpredictable, partly because there are so many teams that you have these giant-killer scenarios that crop up from time time, like Marshall beating Notre Dame last year, and partly because the college games just seem to matter more on a deeper level both to the fans and to the athletes because of all the tradition.

  10. realrobmac

    We FSU fans have been rolling on the floor laughing about this. Nothing against Rashada, obviously. We just love watching Miami and UF fall flat on their faces.

  11. sonofthereturnofaptidude

    Those high school football coaches praying on the 50 yard line finally have something worth praying for. /s

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