Read and Reaction article on Florida's NIL Situation

quote:

---

When Alabama safety Caleb Downs decided to enter the transfer portal this week, a discussion/argument broke out on Gator Twitter, perhaps exemplified best by the following thread.




My issue actually isn’t with the concept being expressed here by Mr. Lewis (who is clearly a passionate and plugged-in member of Gator Nation). My issue is that what he is expressing is imprecise.

For years, college football players have played underneath a system that is anything but a free market. What that meant was that some players (i.e. the third string left tackle) were probably overpaid by having a scholarship, facilities, nutritionist, athletic training staff, dorm room, meals, etc. all paid for. But some players (i.e. Tim Tebow) were grossly underpaid given their contribution to the program both in terms of winning but also in terms of revenue. The reallocation of football revenue to other non-revenue generating sports only exacerbated that separation.

Name, Image and Likeness (NIL) rules have brought markets roaring into college football in a way that they never have before. It’s not that there wasn’t a black market…there certainly was (cough….Urban’s bags….cough). But now the disincentive of getting caught taking impermissible benefits is gone, as is the stigma of asking for compensation to play football. That means the days of $500 handshakes and promising a job to dad being enough to entice a recruit are long gone.

That gets me back to my accusation of imprecision. In a free market, there is no such thing as “overpaying.” There is just the economic reality of markets and those old Econ 101 concepts of supply and demand.

In the case of the transfer portal or high school recruiting, there is a supply shortage. There are only so many players available who can help you win championships (i.e. 30 5-stars annually). But we’ve set up college football at this point with a narrative that championships are the only thing that matter, especially for programs that have won them in the past. That means there is an unsatiable appetite for high-level recruits and transfers (i.e. demand is high).

What happens when demand is high and supply is short? Price inflation.

I experienced this first-hand two years ago when the Phillies made it to the World Series. My kid wanted to go to a playoff game, and the NLCS tickets were going for around $400 a ticket. I expected some inflation for World Series tickets (maybe $700) but when the price increased to over $1000 for nosebleeds, I tapped out and my son and I watched on TV.

I wasn’t willing to pay that much to see the Phillies (or more specifically, experience the World Series since the Phils aren’t my team), but other people were. Did they overpay? No, they paid a market price for a good that was in short supply and high demand.

So what does this mean for Gator football, recruiting and NIL? It means we have to stop talking about things in terms of overpaying. There is a market price, and the NIL apparatus is either willing to pay that price or it is not.

I find no fault with players for finding someone who will pay them more. Anyone who’s jumped companies for a pay raise has done this, and Billy Napier did that exact thing when he left Louisiana for Florida.

I find no fault with the programs who up the bidding. They’ve made a calculation that they need those players to win big, and that winning big has a benefit that will outweigh the cost. Maybe that’s financial, or maybe that’s being able to troll your buddies in Jacksonville, but that cost/benefit analysis has been made.

And I find no fault with boosters or fans who don’t want to fund the bidding. It is their money that they earned and they can use it (or not) as they see fit. Personally I find it extremely distasteful that SEC schools get millions of dollars of TV payments that they have purposefully walled off from the players to make themselves richer, only to turn around with their hands out asking people struggling to make ends meet for money.

But what I find distasteful doesn’t really matter. There is a market and schools have found a way to fundraise for that market through NIL contributions. If you want to win big, you have to find a way to fund that apparatus. If you want to have massive defections through the transfer portal and on signing day, you don’t.

I’ve heard a lot of complaining from both sides (including in the thread I embedded earlier) about boosters needing to buy-in at a bigger level or more fans needing to essentially crowdsource NIL funding with Florida Victorious. But I think both of those complaints miss the point.

When you have a good or service that is in limited supply, you don’t have to convince people to pay more. They’re happy to do so because they understand the value of that asset, but as I so often say, the value of recruiting is that it provides a program hope and trust.

Seasons with 6-7 and 5-7 records don’t exactly engender trust that the given funds are going to generate a return. Nor do finishes of 18th, 13th and 15th in the recruiting rankings give significant hope that more wins are on the horizon. Unlike my World Series example, where I know I’ll have a great experience with my son, giving a donation to Florida Victorious requires trust that others are going to do the same thing (or my money is wasted) and that the program will efficiently utilize those resources (or my money is wasted).

And therein lies the real issue for Florida. I don’t think either the boosters or the fans are cheap. I just don’t think they see value in the hope, trust or the actual product that the program thus far has tried to sell.

---