The college football spending cap is brand new, and here’s how schools already are ignoring it

Last summer, following the approval of the House settlement, college administrators celebrated the arrival of a more regulated name, image and likeness (NIL) system that would curtail (in their words) the “false market” for athletes’ services and lead to a “market correction.”

Athletic departments can pay student-athletes up to $20.5 million this school year, and the creation of the College Sports Commission by the Power 4 conferences (not the NCAA) to enforce provisions of the House settlement requires that each deal meet a “valid business purpose” and fall within an approved range of compensation.

The first test of this “market correction” theory is currently underway. While the transfer portal does not officially open until Jan. 2, agents have been quietly shopping their clients all season, and now, college football general managers are negotiating deals for players known to be entering the portal.

The Athletic spoke with agents, GMs and school collectives to get a sense of whether the dawn of revenue sharing, coupled with more oversight of third-party NIL deals through the College Sports Commission, has reined in the so-called “wild, wild West.”

The consensus answer: Absolutely not.

If anything, the numbers are even higher than last year.

“It’s the same people who predicted coaches’ salaries would be suppressed,” said a Power 4 GM.

Last year, the highest-paid quarterbacks in the market, Georgia’s Carson Beck (Miami) and Tulane’s Darian Mensah (Duke), earned deals of more than $3 million (not including incentives). This year, the price for a proven player like Arizona State’s Sam Leavitt, Cincinnati’s Brendan Sorsby or Nebraska’s Dylan Raiola is expected to start at $4 million and could reach $5-$6 million, according to an agent who’s shopping a quarterback, a GM trying to retain one and a collective head who’s losing one.

If prices get that high, schools are either prepared to spend roughly a third of their rev-share budget on one player, or they’ve already lined up other parties to cover the rest.

In other words, the exact kind of arrangement that commissioners and athletic directors pledged would become a thing of the past.

“When you hear these numbers over the cap — no one can put that in writing,” Iowa State AD Jamie Pollard said recently. “So I don’t know what you’re going to (say to) the players. You’re going to tell them, ‘I’m going give you $2 million, and then you might get another $2 million?’”

Pretty much.

The first hint that programs aren’t heeding the so-called “hard cap” of rev-share came during the recent coaching carousel. Most Power 4 schools are allocating $13-$15 million for football. For a program like Iowa State, that’s a welcome step up from what they were spending before.

And yet, when LSU hired Lane Kiffin, “The Advocate” reported the school is “prepared to commit $25-$30 million annually for Kiffin’s roster.”

“That’s very clearly an institution saying, we don’t give a f—,” said the head of a Power 4 collective with a smaller budget.

And it’s not just LSU. Auburn, which hired USF’s Alex Golesh, “is positioned to be closer to $30 million next year,” sources told 247Sports. And Penn State “is committing $30 million in NIL money” to Matt Campbell, according to reporter Matt Fortuna.

And those are just the ones we know about.

To get to $30 million, these schools would need to generate at least $15 million in “over-the-cap” third-party NIL deals despite, in theory, having to submit every deal of more than $600 to the CSC’s NIL Go clearinghouse for approval. So programs have already figured out a way around the restrictions, or they don’t believe the CSC is capable of enforcing them.

Before we get to some of the nefarious cap workarounds already circulating, know that most programs are first pursuing above-board methods to stretch their payrolls.

For starters, many athletic departments have beefed up their internal staffs and contracted with multimedia rights (MMR) firms like Learfield, Playfield and Opendorse to pursue legitimate brand deals for their most marketable athletes.

“You have had the rise of the MMR partner taking a huge role, taking the role of the booster,” said a person who leads a Power 4 collective for a top-20 program.

Early indications are that the CSC is clearing most deals with established national companies, as opposed to those from collectives or boosters affiliated with a specific school.

How does that work? Opendorse co-founder Blake Lawrence says his company assesses the brand value of every athlete on a client’s campus and then pays the school a low seven-figure guarantee it can then dole out to its athletes. The onus is on his firm to book enough CSC-compliant deals to fulfill those commitments.

“It’s the fastest-growing solution we have as a company,” he said. “We’ve already signed some blue-chip brands and partners.”

But there are only so many players on a roster with the name recognition and/or social media following to earn a lucrative endorsement deal with Gatorade (Ty Simpson) or Samsung (Jeremiyah Love). A national championship-aspiring program still needs to come up with enough dough to cover the rest of the two-deep.

Some schools are also leaning into their apparel providers, like Nike and Adidas, which have long poured millions into athletic department coffers but never directly to athletes. For example, Tennessee announced a new 10-year agreement with Adidas by which that company will not only provide cleats and jerseys, but “offer unprecedented NIL opportunities … across all 20 of the university’s varsity programs.”

But that does not mean every player on a roster is getting his or her own shoe deal. Nike recently announced a 10-year extension with LSU in which 10 current athletes — and only two football players — received their own deals.

All told, Lawrence believes a school with enough high-profile athletes can secure an additional $3-$5 million in legitimate third-party NIL deals it can stack on top of its rev-share budget.

That may be more than enough for the large majority of Power 4 schools to fund their best-case scenario rosters. But not the ones pledging $30-million plus to build a national championship roster.

Which might necessitate some creativity.

For one, collectives are not totally disappearing. “The best practice is to keep all available options open,” the person with the top-20 program-affiliated collective said.

With the caveat that much of what one hears behind the scenes can be of a gossipy nature, here are a few workarounds sources say they’ve already encountered.

• Say a school agrees to pay a player $200,000. If his agent is taking a 20 percent commission, then in reality, he’s making $160,000. So, the collective pays the agent his fee directly, and the program saves $40,000 in cap space.

• Say a school promises a player $200,000, and wants to split it between rev-share and the collective, but it fears that CSC won’t approve a $100,000 collective deal. The parties agree to the amount verbally, then the collective submits smaller deals throughout the year (for autograph signings, charity appearances, etc.) that eventually add up to the total.

• It’s believed that at least one school’s collective paid their entire incoming freshman class what they would have earned in rev share, so that the payments don’t get counted against the cap.

• And then there’s the simplest, but riskiest, workaround of all: Just don’t report the deals. Which was probably happening already.

The onus is on athletes and their reps, not the schools or collectives, to submit third-party deals for approval. The rules as written say a school may be forced to declare an athlete ineligible if he gets caught, but nobody’s been busted yet. And they probably won’t be anytime soon.

The CSC enforcement of new rev-share and NIL rules has been delayed because all 68 Power 4 schools have yet to officially sign an agreement conference leaders hope will put some teeth into the process. Texas Tech, for one, said last month its general counsel advised against it due to several objections to the language. Texas Attorney General Ken Paxton followed up by sending a letter to all of the state’s Power 4 schools urging them not to sign. Lawyers are still looking at possible tweaks to the agreement.

In the meantime, a transfer may have to finalize their deals and enroll at their new schools without knowing how long it may take for the school to get approval to pay them.

“I suspect the money is going to get paid out (up front),” said one agent, “and in the worst case, the player has to pay it back.”

The NCAA Football Oversight Committee pushed the portal window back from December to January this year in hopes of making the calendar less chaotic for coaches with teams in the postseason. Rev-share and NIL Go were supposed to formalize the process.

But “nothing has changed, except kids aren’t able to take visits,” said an agent. “It’s the dumbest thing in the world.”

— Ralph Russo contributed to this story.