Ever since the NCAA was formed in 1906, student-athletes have been made victim by standardized legislation, rules, and guidelines – that exploit their talent and potential but offer unfair compensation for their efforts. Sure, the students receive a free education and housing, subsidized meal plans and access to academic resources the average student is not granted. But is that enough when you consider how much money the NCAA makes as a whole? It’s time the players got a piece of the action.
There is an overflow of money heading into the pockets of not only those employed by the NCAA, but major networks, administrators, broadcasters, coaches, etc. That money is generated by merchandise sales, concessions at sporting events, advertising and ticket sales – all of which directly correlate with how well the players play.
Let’s be honest here: student-athletes are underpaid employees of the NCAA and the universities they represent.
Coaches across the country have seen massive pay increases over the years. Why is that? For one, national television contracts (CBS, ESPN, ABC, etc.) and conference televisions deals (SEC, ACC, Longhorn Network, etc.) allow them to be paid handsomely. Secondly, if you land the best recruits in the country and in turn, produce wins, you’re due for a large increase in salary.
According to Forbes, the University of Alabama cashed in $143.3 million in athletic revenue which was more than any NHL franchise and 25 of 30 NBA franchises.
That is staggering…
What’s even more unfair, is the risk these NCAA athletes take while seeing unsubstantial reward. For years we’ve been turning the other cheek and letting “this is their chance to showcase themselves to the pros” be the basis for calling college sports “amateur,” and college players “unworthy of further compensation.” But every second spent on the field, court, or baseball diamond, student-athletes are in danger of losing significant sums of money down the road if they get hurt. Save for a private insurance policy, there really are no guarantees, benefits, or justification for the athlete to risk their professional potential.
This is part of why high school players used to go directly to the NBA, where they thought they could be fairly compensated, and why the one-and-done rule has proven ineffective in deterring amateur athletes from turning pro before they might be ready. What incentive is there for them to stay? Can you blame them?
But what if there existed an avenue to bring the NCAA, universities, the student-athletes, and fans together to solve these monumental issues? What if we could keep the players in school longer, while making sure they get paid what they’re worth?
FanPay.org is the first proactive entity to offer fair and reasonable student-athlete compensation reform, serving as a crowdfunding platform incentivizing student-athletes to earn their degree. Everyone, including student-athletes, will get to reap the benefits of the athletes’ talents while simultaneously encouraging them to stay in school and graduate with a degree.
No one else has come forward with an answer that so accurately identifies the issues facing college sports as a business, and provides rational solutions that will create positive change.
I had the pleasure to interview two of the co-founders of FanPay.Org, Brendan Collins and Tony Klausing. Collins and Klausing are at the forefront of a visionary company that is challenging the outdated school of thought the NCAA adheres to – and they’re putting up a fight.
How did this idea come about? What inspired you to do this?
Tony: I was working on some related online payments software, which could accept contributions online and escrow those contributions until some goal was reached. At the same time, a lot of stuff was going on with the O’Bannon case and the Northwestern unionization movement, and I thought that we could use the tools we were building to make a huge impact in college sports.
When the O’Bannon ruling came out and the judge mandated that universities had to pay players more, and that these funds were to be held in a deferred compensation trust, that’s when we really realized that the tools we were building were particularly well-suited to help solve some of the problems that face college sports right now.We really thought there was an injustice going on. There are staggeringly low graduation rates among student athletes. Many of these athletes come from poor socio-economic backgrounds.
Meanwhile, sports organizations are making literally billions of dollars off their efforts. As the court ruled in the O’Bannon case, this an effective monopoly. And its morally wrong. The players should and can benefit from the situation. And we can leverage technology in an innovative way to help the situation.
We think the current approach to reform is unfortunate: it’s legalistic, antagonistic, bureaucratic. And it’s taking too long. The O’Bannon case and the Northwestern unionization movement are both being appealed by the NCAA.
We believe FanPay provides an alternate solution: it’s proactive and collaborative. It’s based on goodwill, and it help kids get paid more fairly and incentivizes them to get a college degree.
Could you give us a brief synopsis of how it works?
Brendan: First, we haven’t yet accepted a dime from anyone: we plan to launch later this year.
The idea is pretty simple. Fans can donate online to support athletes and teams they love. Fans can either donate to a team or individual player. At that time, the money goes into a non-interest bearing escrow trust fund.
If the athlete graduates and chooses to claim the funds, they are entitled to everything that has accumulated in their fund. If not, the contributors get their money back.
This way, athletes are incentivized to graduate and are also fairly compensated for their efforts on the field. We think it’s a win-win-win:
For schools, we guarantee that graduations rates would increase. Of course, it’s also more likely that their best athletes will stay for longer. A lot of schools complain about how they’re going to pay for all their student-athletes. With FanPay, the schools don’t have to pay out pocket: it uses technology to reach more people and expand the pool of potential donors.
For players, the benefits are pretty clear: they are compensated more fairly and they’ll be much more likely to earn a college degree.
Finally, fans can support the players and teams they love in an unprecedented way. We think this platform is unique because for the first time we are putting the power in the hands of the fans to effect positive change in a student athletes’ life. And they can directly be a part of reforming college sports.
But the bottom line is this: there are all sorts of possibilities for directions we could go, and we’re open changing our operations to best realize our mission, which is to incentivize college athletes to earn a degree and help them get compensated fairly.
What kind of support and criticism have you been receiving?
Tony: We’ve gotten a lot of amazing support from friends, family, and strangers.The first question people often ask is, ‘Is this legal?’
Because the NCAA and its 1,300 member schools are such a powerful institution, people tend to get brainwashed into thinking that NCAA bylaws are actual law, but they aren’t. The NCAA doesn’t decide what is legal and what is illegal; governments do.
FanPay is a crowdfunding platform, and it’s completely legal. It is novel, though, so it’s a bit of a learning curve to get acquainted with the idea. But once people are, they love it.
Compliance officers are a little bit hesitant. In the past three days, we have received five cease and desist letters from various universities: Tulsa, Louisville, Florida, Cincinnati, and Notre Dame
We took all the players from these schools off the site. But the language all of these schools used in their letters to us is ironic. They point out that according to NCAA bylaws no commercial entity can use the names, images, and likenesses of current college players.
But we think this is actually supremely ironic because in the O’Bannon case, Judge Wilkin used the exact same phrase to mandate that universities themselves couldn’t make money off the names, images, and likenesses of players without sharing the revenue.
The bottom line is this: everyone is getting rich off of student-athletes: ESPN, college administrators, coaches, concession stand vendors . . . everyone besides the players.
Of course, we understand why the universities are sending these letters: they want conform with NCAA rules.
But it’s clear that in college sports there is a cozy culture of conformity, which we believe proven to be really detrimental to any kind of genuine reform.
We’re waiting for some bold, forward-thinking university officials to reach out to us to start a conversation. We’re on the right side of side of history, and we welcome schools and the NCAA to join us.
Have you heard from the NCAA?
Brendan: We have not yet. We are not sure what their reaction will be, but we think FanPay benefits everyone, including the NCAA and its member schools. We think we have leveraged technology to create a collaborative solution, and we want everyone to be on board with it.
Do you believe your plan could change the NCAA as we know it?
Tony: We think that this is going to be a part of a greater movement, with many stakeholders. We are trying to move in the right direction. We want to see more innovation, and more ideas. We don’t see institutional innovation right now, and that’s why the state of college sports is as fractured as it is.
Do you eventually believe fanpay.org and universities can coincide to help student-athletes?
We absolutely think that FanPay can work with schools.
The overriding message, we hope, is one of positivity and collaboration. We think it’s a shame that this discussion so far has been so negative and so antagonistic.
We’re trying to induce a perspective switch here. The solution to this problem doesn’t have to be antagonistic. We can be positive and proactive. We can join fans and players in a way that has never been done before to effect real change.
We hope that our branding and marketing can be positive. We don’t want to have to wait five or ten years for players to be compensated fairly. We don’t want players and schools to always be worried about getting in trouble. That’s not the spirit of college sports.
FanPay wants to move forward in a collaborative manner. We’re here to usher college sports into the 21st Century.
*Section photo credit to Streeter Lecka, Getty Images; Featured photo credit to Brian Spurlock, USA Today Sports