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- Forget Private Equity. Let's talk Student Equity.
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Forget Private Equity. Let's talk Student Equity.
And what it means for NIL
Private Equity graphic. (Photo Credit: wowsglobal.com)
You may have recently heard about private equity firms trying to enter the professional sports landscape in North America.
In short: These are companies that would provide pro sports teams tens of millions of dollars (along with connections and other resources) to support their team financially. In turn, the team would give up a portion of ownership and control to said private equity firm.
There were also recent rumors of Penn State and UCLA athletics agreeing to private equity partnerships. (Both schools denied these stories.)
However, something that might be coming in larger numbers to college athletic departments: Student Equity (SE).
What is SE?
I discussed this last month at the Hashtag Sports Conference in response to an audience question around private equity in college athletics.
Student Equity is:
A phrase I created and is not industry standard wording.
Where student bodies of colleges (not just student-athletes) are mandated to pay a per-semester fee that goes directly into the athletic department, in which the department can use at their discretion.
Last year, Clemson students were required to pay a $150 per semester fee ($300 per academic year) “to be used “solely for athletic operations expenses directly associated with student-athlete services and student experiences.”
Beginning this academic year, University of South Carolina is incorporating a $472 annual fee ($172 annual + a new $300 “athletics auxiliary fee”) that all students must pay.
Quick math shows that Clemson generated over $8.72M last year with these fees alone, and South Carolina is primed to take in $18M this upcoming year from this.
What does this mean for NIL?
Clemson’s Athletic Director Graham Neff stated that the revenue generated from this fee would not go towards NIL initiatives. (South Carolina did not confirm nor deny whether fees would go torwards NIL.) Moreso, the funding is used for athletic field maintenance, intramural sports, and helping to field competitive teams in various sports.
However, I have a hard time believing that schools will stick to this rule, and I fully expect some of this funding to bleed into NIL initiatives as soon as this academic year.
So these fees may generate new NIL initiatives for student-athletes, which are generated using student fees, that said students will have no say in what these initiatives are. Moreso, these students will most likely not receive any benefit from these potential NIL deals.
Will more schools follow Clemson and South Carolina’s lead? Absolutely.
Is this fair? Not really.
What will be the end game? Stay tuned…
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