USC opposes new donor-run NIL collective for football program

When USC partnered with an outside media outlet to form BLVD LLC, there was hope that its unique approach to facilitating name, image and likeness deals for Trojan athletes would help stave off the rise of a donor-led collective — and Keeping USC out of the crosshairs of any future NCAA raids.

But less than two months later, The Times has learned that a group of USC donors and die-hard fans with deep pockets are proceeding with their own NIL operation against the school’s wishes.

The group plans to soon start “Student Body Right,” a third-party collective they say is essential for USC to compete with other top schools with collectives. They are not alone among Trojans football fans, especially those who are frustrated by BLVD.

Within USC, however, attempting to create a collective beyond the reach of the university is viewed as an existential threat that could be seriously examined if the NCAA decides to enforce its NIL policies.

Dale Rech has no such concerns. Rech, a Florida-based businessman and lifelong USC fan, was a football donor to the Trojans in the Pete Carroll era but became disillusioned with the athletic department and eventually broke ties. He’s leading Student Body Right’s efforts, he says, to offer a NIL alternative to BLVD “for those who want to contribute to the football program without having any connection to USC at all.”

The group includes Brian Kennedy, who was once a key athletic donor to USC and whose name still graces the Trojans’ practice field. Kennedy’s relationship with USC soured nearly a decade ago, but he confirmed to The Times that he was involved in discussions about student body rights.

Details on how payments will be distributed to players have yet to be determined, but Rech said the intention of the collective is to provide “the equivalent of a base salary” to every member of the USC football team who is academically eligible. To receive these payments, players would do community service and engage in charitable work with local organizations.

How this charitable work will be evaluated or how the payments will be divided among the players is still up in the air. Student Body Right has applied for 501(c)(3) nonprofit status, which would allow certain donations to the group to be tax deductible. BLVD is not a 501(c)(3) nonprofit organization.

Student Body Right is not the first external NIL outfit to compete for such status. Several collectives, including those from Texas, Texas Tech, Notre Dame, and Arizona, have either applied for or received the same 501(c)(3) status, although some experts warn they could invite an audit if either IRS or state governments decide to investigate more closely whether the collectives are charitable causes.

The ambiguity of this definition, coupled with the regulatory uncertainty surrounding NIL, is already making those responsible at USC uneasy.

In response to questions from The Times, USC athletic director Mike Bohn issued a statement defending the university’s position. It refused to recognize the existence of student body law.

“Earlier this year, USC partnered with Stay Doubted to form BLVD LLC, an agency and media company providing NIL services to all USC student-athletes,” Bohn said. “USC is not aware of any formal donor-created NIL collective. We ask that all donors wishing to support USC athletes through NIL, please work with BLVD to ensure all activities are conducted in compliance with state law and NCAA rules.”

Rech said that in forming the collective, his group consulted with several outside attorneys and tax experts to ensure they were complying with all applicable NCAA rules, however uncertain the current interpretation of those rules may be. However, new guidelines outlined by the NCAA in May specifically prohibit boosters — as well as the collectives they may represent — from being involved in the recruitment process or offering NIL deals as an incentive to sign with a school.

USC could presumably be held responsible by the NCAA for any violation of these rules. But Rech says Student Body Right has no intention of being involved in recruitment or anything with potential Trojan athletes. NIL payments would only be made to enrolled athletes who have performed the required community service.

“This is a distinct collective, with no affiliations or ties to the university,” Rech said. “The NCAA cannot return to the university as long as we comply with regulations and comply with NCAA and state guidelines.” There is no setback from us at the university. They just want control.”

This power struggle isn’t unique to USC. As more third-party collectives emerge in college football, varsities must now contend with deep-pocketed donors who may now have an outsized impact on athletics without really resorting to keeping them in check.

“We feel really good about the way we are associated with BLVD and we look forward to a successful agency that will comply with NCAA rules,” Bohn told The Times when asked whether the two organizations could work together. exist.

As Rech began exploring the prospect of a third-party collective at USC, he said he reached out to BLVD to update them on his plans and inquire about working together.

“They were confident that they didn’t need our help,” said Rech.

USC quarterbacks Caleb Williams and Miller Moss warm up during practice.

USC quarterbacks Caleb Williams (13) and Miller Moss (7) warm up during practice on the first day of fall training camp at USC August 5.

(Michael Owen Baker / For the Times)

So at the time, he decided to pause the collective’s progress as BLVD planned to reach out to members of the USC Scholarship Club, which includes senior donors who have pledged $20,000 or more to the Trojan Athletic Fund.

BLVD hosted two Zoom meetings last month outlining the organization’s goals. A slide from their presentation, viewed by The Times, shows that BLVD has set a fundraising goal of $75 million over the next five years, which equates to $15 million per year.

But the presentations also raised concerns among some donors about the use of their money. As explained during the meeting, only 50% of a given donation would be used where the donor wished, while the other 50% would be set aside in BLVD’s general fund to be allocated at BLVD’s discretion.

That policy is currently being changed amid donor opposition, two people familiar with the decision told The Times. However, concerns about the viability of BLVD in the NIL market persist among senior donors and USC fans, many of whom have been calling for the emergence of a third-party collective for months.

For Rech, these concerns were the final impetus to move forward with Student Body Right. He doesn’t understand why USC is so sure the two can’t coexist.

“We’re not taking anything away from BLVD,” said Rech. “We’re filling a money gap that they wouldn’t get anyway.”

Like USC’s administrators, Mike Jones sees no need for an outside collective and the potential liability that entails. As CEO of Stay Doubted, the outside media agency that partnered with the university to create BLVD, Jones told The Times that BLVD has “the ability to operate like any other collective in the country.”

Jones went on to refer to BLVD as “Collective Plus” — a change in phrasing from its inception in June, when USC sought to distance itself from any association with collectives.

“We see ourselves as the future model of what collectives will achieve,” Jones continued.

When asked about evidence of this progress, Jones said USC considers “in excess of eight figures annually” in private donations before considering potential corporate sponsorships, content sales, or merchandise. He also said that since the inception of the BLVD, USC has already awarded “seven figure” contracts to Trojan athletes.

New USC coach Lincoln Riley echoed that positive outlook at Pac-12 media day when asked about starting BLVD.

“I took this job with the feeling that in the NIL area we have advantages over every team in the country and I know that now,” Riley told the Times. “I know [BLVD] is still a bit in its infancy, and I think this thing is going to turn out to be a big part of USC athletics and USC soccer. It’s something that has my full support, the full support of our staff, and I would encourage every single Trojan fan out there to get involved, because that’s how it will be make a difference.”

While supporting BLVD, Riley acknowledged there might come a time when collectives are standard for every major college football program.

“When this world becomes a collective world, our supporters here are going to support our boys just like everyone else in the country,” Riley said. “If it’s not going to be a collective world, who has a better facility than this? However these rules evolve, we are positioned.

“What we don’t want to do for a future athlete, our current program, or any of the staff is that we do something now that will later be deemed against the rules, or they decide to enforce the rules and now we’re in trouble . Now we’re in trouble. Now we’re on probation. Now people get fired or guys get disqualified. Nobody wants to go through that. We do not have to. Here you can use all advantages and do not have to take this risk. Then when they actually define those rules, we chart our course and go.”

Rech is less confident about BLVD. In the fast-changing world of NIL, he insists he wants to make sure every soccer player’s living expenses are covered at USC. If that means working with BLVD or continuing an already contentious relationship, so be it.

“We applaud anyone who can bring USC back to winning national championships,” Rech said.

https://www.latimes.com/sports/usc/story/2022-08-09/usc-football-collective-nil-student-body-right USC opposes new donor-run NIL collective for football program

Emma Bowman

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