🏅Here's why there's no upsets

Teaming up with

Hey there,

We’ve got another March Madness-packed edition for you today. First, we examine the question we’re all thinking: is NIL behind the lack of upsets in the tournament this year? Then we’re taking a closer look at how the transfer portal could further exacerbate those differences after the House Settlement takes place. Lastly, we’re peeking behind the curtain of “buyout clauses” in NIL – you don’t want to miss it. 

If you’re wondering why, and how, March Madness looks the way it does right now, this edition is for you. Let’s get into it.

— Cole and Collin

The Big 3

No NIL Money = No Cinderella Stories in March

Of course March Madness has been fun this year, but something feels… different? We’ve already seen far less upsets than usual, and the biggest “Cinderella” team that made it past the second round was was #10 seeded Arkansas – who’s spent around $14 million on their roster this season. What gives?

Well, NIL gives. More than ever before, Power Four teams can spend their way into tournament success. Combine the NIL incentives with an unleashed transfer portal (50% of players in the tournament are transfers), and there’s more mobility than ever from mid-majors into the higher levels of college hoops.

It’s often taboo to publicly talk about the effect of NIL on roster building, but word gets out. For example, when asked why he listens to his coach, Maryland’s superstar forward Derik Queen was blunt: “He did pay us the money, so we gotta listen to him.” (More)

Portal Spending Projects to be Massive this Season

In case you’re too locked in on actual basketball to care about the transfer portal, you might not even know that it actually opened up last Monday. But it did, and additional roster budgets (thanks in part to the House Settlement) are ballooning the basketball compensation market to new highs.

The difference is that rev-share money is now in play, which, while not technically NIL, changes the accounting quite a bit. According to On3, rev-sharing will open up about an additional $3 million for top programs to play with… or potentially over $10 million for blue bloods.  

We also know that a Power Four starter costs no less than $500K right now, but if you’re doing mental math, that number starts to look rather low. If some teams (like Duke) are spending $20 million on their rosters, then they’re probably giving out at least $3 million to every starter. (More)

More NIL Contracts Now Include Buyout Clauses

The Athletic published an article not too long ago about the rise of “buyout clauses” within NIL contracts. These are exactly what they sound like: specific language in compensation agreements that require payment to the school if the player breaches contract…in other words, if they enter the transfer portal.

The most recent school to confirm these clauses is Washington State. “The Collective has put buyouts in place to ensure that funds are recouped in the event a player were to breach an NIL agreement,” an unnamed source from within the school’s collective said, “These are standard practice across the country.”

These agreements aren’t novel – in fact, they’ve been used by college coaching contracts for quite some time. According to sports attorney Mit Winter, “It’s basically a carbon copy of what happens with coaches… They all have employment contracts that say, ‘You can’t coach anywhere else, but if you want to break the contract, here’s what you have to pay.’ And it’s almost always the new school that pays the buyout.” (More)

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NIL BLITZ

♦️ This year’s March Madness was the most watched opening day in the tournament’s history

♦️ HOKA just signed Harvard running commit Tam Gavenas to an NIL partnership

♦️ K-State QB Avery Johnson receives his own branded lemonade in new NIL partnership

♦️ NILOSOPHY – a show about the business of college sports – just launched with Front Office Sports

♦️ The women’s sports boom will falter if it doesn’t keep growing

♦️ UCLA’s KiKi Rice opens up about her worst NIL purchase in new Turbotax ad

♦️ A new partnership between Opendorse and Just Play will give coaches accurate NIL valuation tools

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BATTER UP

Today’s Poll Question:

Last Edition’s Poll Results:

How high could Amir Khan’s NIL valuation go?

• No further, he’s just a manager - 33%

• A bit further if NC State is relevant next season - 37%

• Much further, he’s become a brand in and of himself - 30%