INFLCR’s Jim Cavale discusses college football’s looming revenue problem, possible path forward

A year ago, Jim Cavale forecasted how hard it would be to enact an NIL bill at the Congressional level. With the conflict in Ukraine, inflation and then the upcoming midterm elections, he put the timeframe for true conversations centering around NIL at least 18 months out.

Fast forward to a year later. The prediction from the founder and CEO of INFLCR, a company that provides brand-building technology to assist institutions’ athletes in maximizing their NIL value, was not totally off. With a new NCAA president in Charlie Baker, talks have reignited on Capitol Hill in the last six weeks.

Yet, not many believe lawmakers will be the ones to bring change to college sports. Earlier this week in Nashville during his State of the SEC address, commissioner Greg Sankey pleaded for help from elected officials while even admitting his own doubt in the movement.

The NIL space has significantly grown and matured in the last 12 months. The era, now into its third year, is fueled by NIL collectives. Data in annual reports from multiple marketplace platforms showed nearly 75% of NIL compensation was produced by the donor-led organizations.

Most Power 5 athletic directors, commissioners and head coaches continue to beg for change at the Congressional level, citing recruiting inducements and the need for agent certification. Cavale pointed out another looming battle facing the NCAA during his recent appearance on the Paul Finebaum Show.

“I think the bigger picture is what’s going to happen with big-time college football players when it comes to employment,” he said. “Because whether it’s employment, whether it’s sharing revenue, big-time college football players are in a situation where they deserve probably a bigger piece of the pie. And the way it is looked at — let’s just say an SEC school does $250 million in gross revenue as an athletic department. Let’s say $130 million of that comes from football. Well, at the pro level, $65 million of that $130 million would go to payroll for players. That’s the big discrepancy. It’s unlike anything in American labor that’s being looked at right now in the Johnson vs. NCAA case.”

The plaintiffs in Johnson v. NCAA, former Villanova football player Trey Johnson and other Division I athletes, are asking that athletes be deemed employees subject to the Fair Labor Standards Act. Plus, while put on pause until next year, the College Athlete Protection Act would require institutions that fund major college sports to pay as much as $25,000 annually to athletes. The California bill passed the Assembly before being delayed until 2024, according to USA Today.

With TV contracts set to balloon in the next 18 months, revenue sharing without classifying athletes as employees could be an option. The Collective Association, nicknamed “TCA,” launched last week with seven founding members. Focused on sharing best practices and representing athletes’ interests, the group plans to release a revenue-sharing model for college athletes that does not require them to become university employees in the coming weeks.

Cavale shared an inkling of what that could look like with Finebaum, outlining an idea of broadcast NIL, which would share television revenue without classifying athletes as employees.

“Joe Castiglione, to me, did a great job saying we need Plan B, Plan C, Plan D and Plan E,” Jim Cavale said. “I think we do. A lot of people think that there’s ways to use NIL. It’s called BNIL — broadcast NIL — to share revenue with athletes without them becoming employees.”

The post INFLCR’s Jim Cavale discusses college football’s looming revenue problem, possible path forward appeared first on On3.