On Saturday I was headed to the grocery store for the basic necessities of a gameday at home with my wife. On my way into the store, a couple of guys in jeans and tee shirts greeted me at the door. As I (almost) always do, I greeted them with a good morning. I knew they were soliciting funds as I had seen their hand-drawn ribbons and poorly designed signs for breast cancer awareness. I did not stop and talk to them because their presentation was poor.
They say you cannot judge a book by its cover but we do it every day and in this case, the ‘cover’ of the book is a place asking me to donate money. If that cover looks fishy, I will simply go to the national foundations dedicated to cancer research and donate.
It is a base due diligence to verify the ultimate destination of donated funds. The thing about a charity for breast cancer research (or any other charity) is that their financial records are open to inspection at any time. I can look and see exactly how much in donations came in; how much was spent on administrative expenses and what amount ultimately went to where.
Can I see that with two guys in jeans at the grocery store? No.
Fans of programs across the nation are being asked to donate to their own versions of guys in jeans at the grocery store via different Name, Image, and Likeness collectives. Just like I cannot tell someone else how to be a fan, I cannot tell someone whether to give to one, none, or even both of these fan-level NIL Collectives. But I can at least look at what they do and wonder about that accountability.
I am not going to endorse or promote any of the collectives, I just want to give a brief run down for those that maybe have only seen a couple of them or one of them and really do not know the differences or the goals.
DIVISION STREET: This is a collective, but really this is a large donor target collective. It is well run and has a breadth and depth of experience to at least build some semblance of trust that their accountability will be front and center. Run by a former Nike Executive (Rosemary St. Clair) and founded by prominent Oregon Donors, including Pat Kilkenny, The Papé Family, Jim Morse, Ed Maletis, and NIKE co-founder Phil Knight, the collective really is not targeting the fan-level experience, but it is worth mentioning so people know the differences between the three that (currently) exist.
EUGENE NIL CLUB: The ENC is a player-led fan community that benefits members of the Oregon football team. Through the Eugene NIL Club, these members of the team provide fans with digital content and experiences such as digital meet-and-greets, player-recorded content, and much more throughout the year. The ENC generates revenue through fans subscribing to the club. A monthly commitment of any amount allows fans to join the NIL Club and access ENC-exclusive chat rooms, message boards, and content.
This sounds great in theory. It uses the subscription fees to equally pay each player a monthly stipend for those that donate to have some forms of interaction with players. They have a goal of $50,000 in monthly subscription fees (and are only about 20% of the way there) which would provide each scholarship football player with somewhere in the neighborhood of $500-600 per month. That may not sound like a lot, but that is in addition to the scholarship and stipend that the university already provides as well as any other NIL opportunities.
Who is this run by? This is the trick. This is technically one of the many collectives created by a company called YOKE NIL and they provide the technology for clubs of football players. YOKE was founded by Former Notre Dame football players Mick Assaf and Nic Weishar along with an Auburn alum. These are all fairly recent (2019) college graduates, and it appears that their primary initial investor is Ulf Zetterberg, a Swedish software magnate who founded Seal Software.
Seal Software was a pioneer in AI-driven contract analytics and was acquired by DocuSign in 2020 for just under $200 million.
Again, this would be normal, but there are some issues already being raised about the manner in which the company operates (they have an 18% ‘platform’ fee that they claim is down from 25% and could continue to drift down into the single digits if they get enough programs signed on). Technically YOKE is not a collective, they are simply a provider of the technology for the players. The dilemma comes from a tidbit in a recent Gazette of Iowa article where Darrent Heitner, a professor of sports law at the University of Florida, said that his “understanding is that YOKE offered a whole variety of athletes roughly $20 in exchange for some sort of endorsement. The big thing that stuck out to me when I saw this post on YOKE was the extensive rights that the athletes were providing. And not only the extent of those rights but that they were perpetual royalty-free and irrevocable. For an athlete, not to be able to revoke that right at any point for the rest of that athlete’s life or career, it’s a concern, especially if the compensation is around $20.”
According to YOKE co-founders Assaf and Weishar the players at the schools who use YOKE get to choose their funding model (equal share or weighted by some factor of their choosing) and only those players who join together get to share in the proceeds.
The reality that the money donated goes through a third party (YOKE) and then back to the players after the platform fee is deducted should be some cause for concern. Most importantly, as a middleman who is saying adamantly to news organizations that they are not a collective, the accountability issue is a problem here. How do any people donating (investing) in their program know for sure that their money made it back in the proportion said to be returned? YOKE is a private company, so there are no financial statements to peruse; there is no methodology for verifying their accuracy and seeing how much of that platform fee is profit and how much are general administrative costs of running their business.
These are significant concerns when considering whether or not to donate. I don’t question whether or not these opportunities should be available, only the viability and accountability. The ENC (via YOKE) is viable, but I question the accountability.
DUCKS RISING: This is the newest fan-centered NIL Collective to come on to the scene launching on August 31 of this year. Unlike the YOKE-led collectives, the players do not get to decide on a revenue-sharing plan, the founders of the Ducks Rising collective select players that fans can identify with and share proceeds with those players (additionally it is my understanding that this collective is not restricted to football athletes).
Like the ENC NIL, this is a monthly subscription fee-based collective where fans will have the chance to watch exclusive athlete video interviews, chat live with athletes and/or Ducks Rising staff, engage in online and/or in-person events with athletes, get game previews, weekly game film breakdowns, a members-only discussion forum, and featured articles and content with staff and guest writers.
The good news is that this collective is comprised of all Oregon graduates and/or fans. Their founder, Andrew Parmentier, graduated from Oregon in 1997. In one interview, Parmentier was described as a Wall Street Analyst. He has an advanced degree in applied economics and mathematics from The Johns Hopkins University. Parmentier spent two years working for the House Financial Services Committee as a Communications Director in Washington DC before moving on to roles with financial companies.
He worked with FBR – a capital markets firm headquartered in Arlington, Virginia – as a Partner and Managing Director. Following that he worked for another Washington DC area-based firm – Height Capital Markets – as a co-founder and Managing Partner for eight years. His most recent work was with Highland Capital Management out of Dallas (TX) as the Partner, Chief Strategy Officer & Co-Head, Private Equity for a firm that is an alternative investment management firm managing hedge funds, structured investment vehicles, and mutual funds. The firm invests in global public equities, as well as fixed income markets with a focus on leveraged loans, high-yield bonds, and structured products.
I don’t know that headquarters location really matters here; Parmentier has plenty of experience in the world of finance and likely spent plenty of time traveling to and from Wall Street.
The other two primary resources for Ducks Rising are Doug Scott and Shelby Malstrom. Scott is not technically an Oregon graduate having gone to school at Drew University, Portland Community College, and OIT. He is listed as working on Product Management. Scott brings a little over six years of experience in a similar role with Nike.
Malstrom is an Oregon graduate, and she is in charge of athlete relations. Malstrom has worked in multiple recruiting roles following her graduation from Oregon in 2012.
I know for sure that they are all Oregon fans of varying levels and that is at least refreshing to know that the three primary forces behind this collective should have the best interests of the university at heart.
That is the background. Now, the question again is accountability. We have really seen no business plan other than non-specific generalizations about what percentage is going to go to athletes and that all the time of those three is voluntary. But we have yet to see anything formal. No business plan and nothing that indicates where initial investments originated, where the money that comes in is going, and how much will wind up in the hands of the players. With ENC we have an understanding of the basic structure of the contracts with players (and how little of their own rights they retain); we do not have that here. I suspect that the contracts have better terms for the athletes, but that is only a best guess right now.
The other dilemma that I see in this collective is the narrow scope of their target market. Sure, they posted some stuff on Twitter, but for the most part, this has been advertised solely toward the members of one fan site with a reciprocal advertising arrangement in place with said site. The question looms whether this was just an assumption about where most of the fervent fans congregated or the potential that the collective has a sort of dual purpose.
If the friends of a site owner create a collective and then exclusively market that collective to that site while simultaneously providing reciprocal advertising, the impression is one of attempting to circumvent university rules on media interviews of current players. I cannot say whether that is the actual intent, only the inference of the limited known facts.
Rather than go with my own conjecture, I reached out to Andrew Parmentier for his perspective and to answer some of the questions about this NIL. He was very open with me that this really was a labor of love for him. In order to ensure that there was a website in place, the infrastructure surrounding that site (hosting, legal filing, working with Oregon compliance, and several other ancillary costs associated with starting a new business), Mr. Parmentier financed the initial startup entirely on his own.
The Ducks Rising group used a former Oregon player who is now an attorney in the Portland area to ensure that the contracts not only met state law, but also met with the standards expected from the University of Oregon athletics compliance department. All these contracts are filed with the compliance department and have met the standards of the university in the case of Ducks Rising.
“The initial investment is like a forward contract,” Parmentier told me. “We had a lot of costs that we had to pay out to start, but then we would not get revenue until the future. So we could not monetize the contracts for a time after they were agreed upon.”
I think that this is the really critical point in their start up; there had to be content ready to go on day one. Parmentier told me that they wanted to have this running before the first game of the season, so there was a crunch leading into the launch.
This explains some why the marketing was not as well developed as possible to all of the fan sites. The volunteers were doing their best to get the news out to the outlets that they had available to them – and that was not a limitation of intent, but a limitation of their own internal time constraints as individuals.
Also of note, Ducks Rising does not own or restrict the rights of any of their signed athletes; they only own the content and the rights to that content. The intent of the content is to allow the athletes an opportunity to show who they are off the field – which helps them continue building their brand. There is a lot of interest among some players – especially players from sports other than football – to produce their own content for fans. As Parmentier mentioned “fans want to engage with players still and this gives them an opportunity to get that kind of engagement while allowing the players the ability to engage with the community.”
I think that the final thing to think about here is how NIL contracts factor into recruiting. Parmentier mentioned that Ducks Rising will not discuss any contracts with an athlete until he is enrolled to ensure that they do not cross that line into using NIL as an inducement. Coaches cannot say much about specific deals other than to make comments like ‘if you consider yourself of the caliber of Kayvon, those kinds of opportunities will be available to you.’
The reality, however, is that those players who have NIL contracts are also potentially hosting other recruits and will talk about these other options available. As an example, Justin Flowe did a recent interview with Ducks Rising and he will now be able to tell other recruits that he knows the team at Ducks Rising and answer questins about their credibility, honesty, and fairness. While DR will not enter into contract talks prior to enrollment, the knowledge will become sort of tribal, so how they treat players will be a potential long-term benefit. As Parmentier said in a final comment to me “if you’re going to build something, it is worth building for the long-term.”
A final thought on Ducks Rising. My biggest concern in all of the potential ‘fan level’ NIL collectives is accountability. While Ducks Rising is not going to discuss specific terms of contracts, Parmentier has offered to share some basic numbers for my inspection on how much comes in, how much is going out, and where the money is going. There are going to be ongoing costs; because many of those contracts are ‘forward contracts’ there will need to always be some cash in the business to handle things like equipment, videographers, and any number of costs associated with generating quality content on a forward contract.
That is all very sensible finance and accounting reality. As you make your decision, it is worth noting that there is a consensus among those outside Oregon that the fan base is one of the most rabid groups in the nation on gameday; but they seem to lack that same dedication in financial support. It used to be a badge of honor in the Oregon game programs that the Ducks had one of the largest bases of grass roots donors (those donating less than $10,000); but that seems to have faded some. Whether it is through NIL or donations to the Duck Athletic Fund, fans can make an impact.
As Parmentier said you can choose to donate to something where you do not see specifically what your money provided, or you can make a donation to a site that has a more tangible benefit. Either way, the belief that a small level donor has no impact spreads negatively. Make your choice for donation, but don’t let the reality that your dollar level might be small affect your decision. It all matters.
FINAL NOTE: And I think that this is the biggest takeaway: there is so little regulation on NIL that it really is like the wild west. Do I think that either of these is akin to the Nigerian Prince scam? Of course not. I think each has a notion of what they want to do, but with no regulation and no oversight, the lack of accountability creates a little nervousness on the part of many people who might want to pitch in, but really have no clue as to what is happening with their money.
Those guys at the grocery store had a bad cover for their book. Right now, fan-based NIL Collectives have even worse; there is no cover just a query looking for investors. I love that people are trying to get fans at the low donation levels involved in helping their universities, I just want to see more clarity in their model and better accountability to those “investors.”
I hope that the information provided today gives some more depth and yet better clarity to your understanding of these collectives. Like I said at the beginning, I cannot tell you whether to subscribe to either of these groups, nor how much if you want to subscribe. I do not plan on officially endorsing either at this point. The facts are pretty clear on both, and I think that anyone who reads my work has enough sensibility and intelligence to make their own choices based on what information I have provided.
DISCLAIMER 1: One of the newer members of the Ducks Rising staff is the daughter-in-law of a high school friend. While I have never met her or her husband, it is important to disclose that relationship.
DISCLAIMER 2: I received an email from a follower asking me to check into both of the fan collectives. This is wholly unrelated to my work for Rivals and is in no way an attack on anyone personally or their credibility. I tried to find the facts surrounding both of these collectives and lay them out in as much detail as possible.
