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A basketball tournament may pay out direct NIL bonuses. How big of a deal is that?

A very big deal. And also...maybe not?

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Conference basketball tournaments are either just wrapping up or about to hit full swing, with the full March Madness events kicking off next week. But it’s a potential tournament for next basketball season that’s really caught the interest of the college sports industry.

Front Office Sports reports that a new tournament, tentatively scheduled for the fall in the 2024-2025 college basketball season, will do something no other regular season event has done… pay the players.

Via FOS:

The tournament, dubbed Players Era, will host eight teams this fall at MGM Arena in Las Vegas and 16 teams starting in 2025. The event will be operated by EverWonder Studio (which was created by former Time president Ian Orefice and backed by RedBird IMI and Jeff Zucker) and AND1 CEO of Basketball Seth Berger. EverWonder hasn’t yet secured distribution but is in talks with both linear and streaming-based broadcasters.

The tournament operator is guaranteeing that sponsors and other tournament partners will offer each school a total of $1 million in NIL money for participating. That money will be funneled to collectives, boosters, or other NIL entities, and the coaches and teams will be able to distribute that money however they see fit, as long as the money goes to current players. The winning team will be eligible to earn another $1 million, to be distributed in the same way.

Both FOS and On3 reported that while the event is initially scheduled to include eight teams, the event organizers are talking with Alabama, Duke, FAU, Houston, Kansas, Oregon, Rutgers, San Diego State, St John’s, Syracuse and Virginia about potentially participating.

It’s also technically not the first basketball tournament to pay out NIL money…just the first regular-season event. The College Basketball Invitational pledged $25,000 to their event’s champion, $10,000 to the runner-up, and $2,500 to each semifinalist. Last year, Charlotte defeated EKU in the title game, with Southern Utah and Radford rounding out their Final Four. That event’s founder, Rick Giles, is steadfastly in favor of explicit pay-to-play events.

On the surface, paying a collective a million bucks for their athletes to participate in a tournament…with the potential to earn even more money if they win, feels a potentially systemic event, right? If a program is deciding between participating in an MTE (multi-team event) that promises to directly pay players vs one that doesn’t, surely they’d have a pretty compelling reason to take the event that pays their athletes?

Sure. But does the math work for any of this?

The Players Era event isn’t a bowl game, or postseason event, or even a proper mid-season tournament. It’s an MTE to be played early in the college basketball season, amid a calendar that already has several of those events.

Let’s take last year’s Maui Invitational, typically one of the most prestigious eight-team MTEs. The field included Purdue (who would win 29 games and earn a 1 seed that season), Kansas (27 wins, 1 seed), UCLA (29 wins, 2 seed), Marquette (28 wins, 2 seed), Gonzaga (3 seed) Tennessee (4 seed), plus Syracuse (a team people care about). That’s a stacked field with elite teams. That event averaged 677,000 viewers across all the ESPN networks, and a championship game of 1.59 million.

Those are excellent college basketball ratings, some of the best for an MTE in recent years. But it wouldn’t come close to cracking the top ratings for a regular season game this basketball seasonand that’s also a smaller TV audience than a lousy Minnesota/Bowling Green bowl game.

Ratings for November college basketball games, even between elite teams, often do even worse than that. Kentucky and Kansas, about as blue blood a matchup as you’re going to get, posted a .87 rating on November 14 of this season. UConn and Kansas played on Dec 1 and recorded a .37 rating. Recording ratings above 1.0 before conference play is relatively uncommon.

If you assemble a field of some of the absolute best teams in college basketball and have them play in November, it’s going to be a niche product. And based on the list shared above, is there any reason to think that the 2024 Player’s Era tournament could include that kind of star power? Duke, Kansas and Houston have been consistently excellent, and Rutgers is bringing in a top five recruiting class, but is the rest of that field going to be strong enough to command national interest? Will you convince casual America to watch a basketball game between two teams that are hoping to play in the 8/9 game in March, just because the players are getting paid?

National interest is important, because MTEs rarely sell out of tickets, and the NIL payments aren’t the only expense involved in hosting a tournament. Per the FOS story, Players Era is also covering team travel, lodging and meals. Throw in facility rental, paying officials, and everything else that comes with running a multi-day event, and stuff gets expensive quickly.

Especially since…maybe a million bucks isn’t that much money for the players?

According to the two published reports about the game, the tournament takes that million bucks and pays it to the school’s collective or designated third party, rather than the school itself (since, of course, the school can’t directly pay the players). The collective can decide how to break up the money, so long as it does to active players.

A million bucks split across all 13 scholarship players is $76,923 per player. But remember, this is an eight team tournament, so presumably, those players are playing three games, not just one…so that’d be about $25,500 or so per game per player. If a player is making $800,000 for a collective for a season (which is not a crazy number for a high minutes player on an elite team)…this NIL payment is basically what he’d be making per game anyway.

And there’s a good chance the individual payouts could be even less than that. Since this payment is structured as an NIL deal, the collective itself, or perhaps a player’s agent, could potentially take a cut of that payment.

For a player that doesn’t have a huge contract with a collective, making $10, $15, $20K per game for a three-game stint in Vegas is huge money. But for players who do, I’m not certain this amount of money is automatically game-changing. A million bucks is enough to be expensive for an event operator, and large enough to make a compelling headline to generate earned media. Enough to make a team turn down the Battle 4 Atlantis? Maybe, maybe not.

But even if this tournament doesn’t end up taking off, directly paying players may shift how everybody else does business

We already had a bowl game launch an official NIL platform to help athletes secure deals, and I’ve heard other bowls are considering similar programming. If one major event is going to directly pay athletes, NCAA-policies-be-damned, it may be hard for other major events to get away without doing the same.

Jay Bilas recently suggested that if this sort of revenue sharing doesn’t happen with the NCAA Tournament, other postseason events could try to steal market share. Via On3:

“And can you imagine getting an invitation from a March tournament where you can make into your collective $2 [million] or $3 million? You go to the NCAA tournament, your players get a t-shirt? That’s going to be that’s going to be a thing, and the NCAA is gonna have to respond. Revenue sharing is coming, and they don’t want to admit it. But it’s coming, and now it’s here.”

Now, I don’t think that exact scenario is particularly realistic in the near future. Schools are bound to accept NCAA Tournament invitations, and a promoter would have to pay a lot of money to convince a brand, let alone individual athletes, to pass up a shot at a national championship. But it is fair to point out that the NCAA-brand, alone, may not be enough to secure participation forever.

For years, after all, the premier postseason college basketball event wasn’t the NCAA Tournament, but the NIT, which offered better payouts, better media exposure, and a better location. The history of bowl games is very much about how games competed for prestige, in part, by competing over purses and payouts.

Eventually, I believe we are heading towards a system of formal revenue sharing not just for the NCAA basketball tournaments, but for every event that commands meaningful broadcast revenue. That’s not an uncommon view in this industry. But the legal system is slow, and the NCAA is slower, and we might not get there for a few more years to come.

So perhaps an MTE paying athletes directly (or as close to directly as possible) is another step towards that eventual destination. That makes it important and meaningful…even if the specific event and specific contracts aren’t industry-shattering in Year 1.

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