Sifting legitimate NIL deals from the darker world of pay-to-play

From 2001 until 2009, University of Miami booster Nevin Shapiro took a blowtorch to the NCAA rule book.

He picked up the bill for players at exclusive South Beach nightclubs. He hosted wild parties with recruits at his waterfront mansion overlooking Biscayne Bay. He placed bounties to knock opposing players out of games, offered cash and gifts to athletes and used his yacht for decadent outings.

Shapiro recalled that he never paid a player to come to Miami, but he often joked he was the program’s “chief recruiter” because of the lifestyle he was able to show was possible if they became a Hurricane. Bottles. Booze. Cars. Flights. Hotel rooms. Sex workers. Providing anything of value was a NCAA violation at the time. He estimates he spent $4 million overall.

But those were the days when the NCAA cultivated an image of enforcing amateurism. With college sports rapidly being professionalized, the NCAA is essentially getting out of policing financial deals. In its place is a new entity, conceived and operated by the power conferences to monitor and enforce so-called extra benefits in the current era of NIL deals and direct revenue sharing.

Count Shapiro among a chorus of skeptics to the new approach of paying athletes for their NIL rights while outsourcing monitoring and enforcement to others.

“I think it’s a flawed system before it gets started,” St. John’s basketball coach Rick Pitino said. “Totally flawed.”

“I think [enforcement will] be very hard,” Kansas basketball coach Bill Self said.

“We have zero trust,” Purdue basketball coach Matt Painter said.

“This is not the way to regulate this,” Shapiro said. “I applaud them for giving an effort, I guess, but this is not practical. There’s one million ways to circumvent it.”

Starting this summer, schools will be allowed to pay players directly as part of an industry-shifting antitrust settlement of three federal lawsuits collectively known as the House settlement.

The deal, which still needs to receive final approval from a federal judge, would set a limit on how much each school could give to its athletes on an annual basis — starting at roughly $20.5 million next year.

To help keep wealthier teams from using boosters or NIL collectives to gain an advantage by exceeding the cap, the NCAA’s power conferences are creating a clearinghouse, separate from the NCAA, to approve future NIL deals between players and boosters. The House settlement states that athletes have to report any NIL deal they sign with a third party that is worth more than $600 and that any such deal has to be for a “valid business purpose.”

Acceptable deals, deemed “real NIL,” can range from a national advertising campaign for, say USC women’s basketball star JuJu Watkins, to a three-figure appearance fee at a local car dealer for a lesser known athlete.

The power conferences have contracted with auditing giant Deloitte to review booster NIL deals and decide whether each is a legitimate endorsement contract or a veiled attempt to circumvent the salary cap.

Deloitte plans to use data from past endorsement deals signed by college and professional athletes along with other information to pinpoint whether each deal exceeds an athlete’s fair market value.

The power conferences are also creating a new organization tasked to enforce the salary cap and “fair market value” rules. This new entity will be separate from the NCAA’s enforcement arm. Several of the college sports leaders involved in creating the new entity say it’s an attempt to fully reset the crime-and-punishment process of college sports that has long been criticized for its lack of efficiency, transparency and equal treatment among offenders. It could be in place as soon as July 1.

A group of 10 power conference athletic directors have been meeting regularly during the past six months to design the new organization but have not publicly shared any details about what kinds of punishments a school or its athletes might face if they break the rules or how they intend to solve the same problems that roiled the NCAA’s enforcement team.

The settlement will give them some new tools — most notably a binding arbitration process that could speed up resolutions, provide the new enforcement group with greater power to compel coaches and schools to turn over evidence and make it more difficult to challenge punishments in court.

WITHIN COLLEGE ATHLETICS, there is hope that the appetite for change is great enough to try something new.

“We’ve arrived at sort of a tipping point for the enterprise as a whole,” Purdue athletic director Mike Bobinski said. “We’re either going to suck it up and just take a little medicine and get it right for the long haul, or God knows where we’re going here over the next however many years, and none of that would be good. I think we have one shot to try to get this thing, and so we’ve got to do it. We’ve got to do it.”

Many in college athletics have sought to impose new rules as the process of procuring players focuses more on the increasing amount of money thrown into NIL deals. However, finding rules that are both effective and capable of standing up to inevitable legal challenges is arduous.

Start with the fact that no system has ever prevented cheating — payments to players that violate NCAA rules have existed for generations. Miami was only punished for Shapiro’s violations after he cooperated with them post-indictment. There was a glimmer of hope among some in 2017 when the FBI arrested 10 men when it alleged that federal corruption laws were broken in concert with violation of NCAA rules. The FBI’s William Sweeney boldly promised more to come as prosecutions proceeded.

“We have your playbook,” Sweeney famously declared.

Except there were no more arrests and while four assistant coaches and then-Louisville head coach Rick Pitino lost their jobs, almost everyone else, including a majority of the head coaches who were caught up in the scandal, either stayed in place or quickly found new employment. The case was a dud, its impact minimal, at best.

If neither the FBI nor the NCAA enforcement staff could do much, why would anyone think this new entity will?

“What we went through the last seven years [from], ‘Hey, we have your game plan, we know what you’re doing’ and then to end up where we did, that was embarrassing,” Painter said. “To me, that was really embarrassing.”

The architects of this new system believe coaches and administrators around the country are so fed up with the past few years of relative lawlessness that they will accept the enforcement group’s authority rather than run to the nearest attorney general’s office to challenge any investigative action as soon as their school gets popped for a rules violation. That theory won’t really be tested until the coaches who claim to want strict rules are staring down the barrel of a postseason ban, a hefty fine or losing a star player.

Then there is the challenge of figuring out whether a player is being paid the proper amount for a deal.

A deal that might seem too generous to, say Caitlin Clark before her junior season at Iowa, might actually turn out to be a bargain. Or as an old axiom goes: Something is worth what somebody is willing to pay for it.

“I actually think in theory it’s good,” Self said of the new system, but “it’s hard to imagine how someone can [define] fair market value because to me, the fair market value is what a company or an organization sees that individual’s worth as.”

Others worry about how Deloitte will factor the market surrounding a school where a NIL contract is made. Is an Ohio State quarterback automatically more valuable than a Bowling Green quarterback for a similar deal? How about a USC point guard living in Los Angeles compared to an Iowa State point guard in Ames? If so, by how much?

“I’m just curious how they’re going to identify market value,” said Dan Hauser, the athletic director at mid-major High Point University, located in North Carolina. “Are they going to be able to say market value for one of our HPU athletes is at a lower or different level than the market value is somewhere else?”

Hauser said he wonders if athletes at a school like his will be undervalued because the market for legitimate endorsements is crowded by more high-profile in-state programs such as North Carolina or Duke, let alone local professional franchises. There are only so many car dealership endorsements to go around.

Deloitte and the new enforcement group say they plan to provide information about what variables they will use when assessing a fair range of compensation for each deal, but they don’t want to reveal the exact formula due to fears that some parties will try to manipulate the system if they know exactly how it works.

Then there is the potential for abuse.

There is plenty that coaches and administrators dislike about current NIL deals, but at least much of it is out in the open. Houston basketball coach Kelvin Sampson recently inquired about a potential transfer and was told the price for one season would be $2.5 million, a stunningly high number and not reflective of the actual value of his name, image and likeness. Still, at least Sampson knew what he was dealing with.

“I don’t want it to get where they put it back under the table,” Sampson said. “Let’s keep everything above. Let’s keep everything on the table.”

That’s where Shapiro says the rule breaking would be greater than even in the old days of strict amateurism and the NCAA. Back then, there were explicit rules about interactions between boosters and players, let alone recruits. Shapiro said he personally didn’t take the rules — or the NCAA’s ability to catch him breaking them — seriously.

“I was taking care of the players once they were at the University of Miami,” he told ESPN this week. “I had a lot to do with the enticement of the players to make their decision to come to Miami.”

It ended abruptly in 2010, when he pleaded guilty to federal securities fraud while operating what prosecutors called a $930 million Ponzi scheme. Shapiro, now 55, was sentenced to 20 years in prison but the first Trump administration gave him house arrest during the 2020 COVID-19 pandemic. President Joe Biden granted him clemency in 2024.

Now any business or booster can make a legitimate NIL deal — and thus have unlimited contact — with not just college stars but high school athletes, not to mention their parents, coaches and agents.

The possibilities for funneling money to players is almost endless, and virtually impossible to police.

“You might as well give it the name ‘Green light, go,'” Shapiro said. “Is this even realistic?”

That remains the question. The NCAA will no longer be in the business of extra benefit enforcement, but can a new entity be any better at enforcing the rules, especially against an ingrained culture of cheating?

“It’s the curse of this business,” said Purdue’s Bobinski, who remains optimistic something can be worked out. “I’ve been in it for 40 years. A rule gets made and people don’t say, ‘That’s what we’ll have to do.’ The first thing they say is, ‘How do we get around it? How do we bend it to our purposes or our objectives?’ That has to change.”

The new rules are coming. So too, perhaps, are the old ways of breaking them.

ESPN reporter Dan Murphy contributed to this story.