Let’s be honest with ourselves. College basketball has been seriously tainted by under-the-table cash for many decades. Because of NIL, play for pay is the new norm for probably at least 75% of the 363 Division One men’s college basketball programs.
Maybe there are schools where NIL is similar to free enterprise in the business world. It is a good thing when athletes (already enrolled in a college program) are paid a fair exchange of value for their name, image and likeness.
When they are paid to choose a school or transfer to a school, or even stay at a school – NIL is misused. Perhaps the no-rules environment of throwing money at athletes hurts no one. But it fair to ask, what happens to athletes and programs when the ‘well runs dry’?
A recent calculation showed in Division One basketball 20% of scholarship players have entered this cycle of the Transfer Portal. That is almost 1,000 players – and more will continue to join them.
In fairness, most are seeking better basketball opportunities. More than a few are seeking a better basketball situation AND more money. In economic terms, the risk for players is the demand for players will not come close to matching the supply. More than a few will not only fail to gain more (or any) cash but lose a college scholarship as well.
College Basketball and NIL Spigots
There is another level of risk in the most ambitious zone of Division One teams. What happens to high-profile programs when an NIL spigot is turned off?
For example, John Ruiz is known as the most prominent booster of the Miami Hurricanes. According to Darren Rovell, writing for the Action Network, Ruiz has funded NIL deals for,
"more than 100 Miami athletes across all sports at the cost of more than $5 million."
Miami made it to the men’s Final Four this season. According to Rovell, the team’s top four scorers were funded through Ruiz’s company, LifeWallet. One Hurricane player reportedly received an $800K deal to transfer from Kansas State.
A fair claim is John Ruiz tried to buy a college basketball National Championship.
As unseemly as that ‘buying’ feels to many, there is a more serious problem. As Darren Rovell states, John Ruiz’s business, LifeWallet is “floundering.”
"Amid million dollar sponsorships for collegiate athletes, the company faces litigation from its original founder, missed a recent earnings call and has had its stock price fall so low that the Nasdaq may boot LifeWallet altogether."
Year-to-date, the Nasdaq is up almost 18%. Since its initial IPO (less than a year ago), LifeWallet share price is down 91%.
What happens to Miami basketball if John Ruz has to, or chooses to turn off the cash spigot? Will a Final Four team struggle to have a winning record in 2023-24? Will players, unable to collect on their NIL deals, suddenly transfer, damaging the Miami roster? Will a sharp decline in Miami’s team, result in the firing of a coach?
These kinds of problems are not new to sports. Mostly they have been restricted to less successful professional leagues. But they could become common in college sports. What must be answered is two-fold; philosophically, is this what most fans want college sports to be? And, even if it is, is this unusual economic model of paying players sustainable?
The next time a ‘perfect fit’ transfer prospect for Nate Oats chooses another program, how should Alabama fans and the program respond to the likelihood the prospect was bought?