Digital loophole in void rules allows direct payments to college athletes

Two years after the NCAA cleared the way for college athletes to monetize their fame and celebrity, digital technology is allowing some of them to get paid by their fans without doing much in return.

Most deals made by athletes under name, image and likeness (NIL) guidance from schools or states are in exchange for something – for example, endorsement of the athlete on social media, or attendance at an event.

Now it’s possible to pay athletes while receiving something less tangible: a digital non-fungible token, or NFT.

Brent Chapman runs a platform called myNILpay. The app allows fans to choose a college athlete and send them money; The app then sends a notification to the athlete’s school email. The athlete fills out a form and the money is then transferred through Venmo or a similar payment method.

In return, the fan receives a unique computer-generated piece of “art” with the athlete’s signature. Chapman said it served as redemption.

“It gives fans a chance to directly support athletes for any cause,” he added. “Now, if a kid hits the winning field goal, you know, a thousand people can go out and give him 50 bucks. That’s great, isn’t it? And these are the kinds of things that I think That’s something we’ll see happen. Get into football season and other things.”

rj colea former point guard Yukon And Howard UniversityAbout 50 current men’s and women’s basketball players from the two schools are using the app to send money.

He said he’s not really interested in NFTs; He simply wants to support the players on those teams without setting up a basketball camp or buying anything from each player.

“Now it’s easy,” he said. “A fan can pay you right away, and it will go directly to you. I mean, I think it’s like a huge game-changer.”

Pay to play is off limits under NCAA rules and is a longstanding pillar of amateur sports. But now with millions of dollars available to college athletes under the NIL and through booster-funded groups, the rules are under intense scrutiny.

Joshua Fraser, a sports law attorney who specializes in NIL compensation, said the NCAA is unlikely to challenge the new app because it would have to prove the NFT the fan received was not worth the money they paid for it. have paid.

“There [are] There’s a lot of stuff where you’d probably raise an eyebrow and say, ‘Well, I don’t know if that’s really market value,’ but certainly at no point has the NCAA come close to actually regulating it and saying , ‘No, it’s too much,” he said. “And from my perspective, I don’t think they’re going to do that.”

He also said that there is no existing enforcement mechanism to ensure that the NFT model is not misused for payment.

What is being done to prevent booster groups from different schools from engaging in bidding wars for recruits or players in the transfer portal? “Nothing,” said the freezer.

And what can be done to prevent a gambling offender from paying athletes to score points or throw games?

“I think it’s going to be very difficult for anyone to really detect unless you know you have an organized scheme with actual systematic fraud going on,” he said.

Blake Lawrence, CEO and co-founder of OpenDoors, which helps colleges and athletes navigate the NIL landscape, said he doesn’t think the idea of ​​trading cash for NFTs will catch on. That said, most fans want something more concrete in exchange for sending money to the athletes.

“Whether it’s a physical product like a jersey or a shirt or a Totchke that has an athlete’s name, image or likeness or a service like a birthday present or a video shout-out that they can share with their friends,” he added. “In our experience the consumer wants either a physical product or some physical effort from the athlete to create value.”

Still, he added, this does not mean that some digital assets will not form a significant part of the zero scenario.

Another app called Burst is launching to connect athletes and consumers via blockchain, creating digital contracts that allow automatic payments when an athlete provides a good or service, such as a video birthday wish . Producer Grant Sapkin said that digital trading cards are among the products athletes could sell.

In addition to containing pictures of athletes and statistics, these cards may also include pass codes for unique experiences, such as meet and greets. Unlike NFTs, they can be bought, sold, or traded between fans as a type of investment.

The idea is that, like a physical trading card, as the athlete’s fame increases, so does the card’s value.

“You can be a part of that athlete’s journey,” Sapkin said. “And there [are] different types of consumers. There [are] People who only want to support athletes – they generally like that person. There [are] Others who want to trade it to make money and profit themselves.”

Reporting by The Associated Press.

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