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10 minutes ago, Pistol said:

It's the split between what's going to student athletes and what's going to charity that matters. Money to charity obviously doesn't have to be taxed, but money to athletes isn't charity. HWAH's website makes it look just like a charity. It's great that charity is a component, which again is not my point.

There are tons of tax exempt organizations that aren’t charities.  Is is a NIL collective any less deserving an organization for tax exempt status than one that throws money at people to influence public policy and legislation?  How do you determine that?

Those kind of decisions get into risky legal territory.  It would be hard to single out the collectives.  What we really need to do is change the law and take tax exempt status from a bunch of organizations.

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The whole issue of NIL money beyond a certain level is complex at  many levels. I spent sometime doing rough calculations of the expenses a hypothetical player getting a $200,000 NIL in Missouri is likely to have to pay in taxes and other fees. A lot of this is very flexible since the player and his family can choose to take different paths to handle the money. To start with, Missouri allows minors to incorporate as an LLC (with some restrictions to his ability to sign contracts, I am not going in depth here), a number of other states do not allow minors to do so. To understand the issue of fees it must be understood that the more work the player and his family decide to undertake to provide a stable framework for the money he will receive, the more they will have to spend in fees. I think such a hypothetical player is likely to end up with an LLC, legal incorporation and contract negotiation fees, agent fees, and accountant fees. The money will have to be invested and that will add advisory management fees. I have no idea if players receiving NIL money will have to pay taxes on the scholarship money (at this time or in the future) or not, or even if they will continue receiving scholarships and benefits from the school. I assume issues like these are not well defined as yet, and will take time to be settled.

I am making the assumption that the hypothetical player may wind up with somewhere around $50,000 in fees, and wind up with a taxable income of about $120,000, assuming the money is all paid within the year. Using the tax rates for 2021, I come up with a rough estimate of about $30,000 in taxes for the year (Federal and Missouri). This hypothetical player may therefore wind up with around $120,000 net after taxes and assorted fees for the year, and assuming all scholarship and benefits received from the school do not become taxable as income. This is pretty good and can go a long way if managed appropriately.

From the point of view of the NIL donor, assuming the donor is a single wealthy person offering a contract to the player, whether the money spent is labelled as a charity or not, it will be taxed if the donor's taxable income is beyond a certain level. I really do not understand how a charity can use its donations' income to provide income for an individual person. Particularly when the  income provided is way over the median income. I am not saying it can't be done, I am just saying that I do not understand how this works.

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6 minutes ago, Lord Elrond said:

Exactly. The charity sounds great. Money to it is charitable. Money to someone for their Name, Image, or Likeness is not, it’s income.

And the tax exempt status of the collective doesn’t make that income to the player tax exempt.  Today it is just as taxable as anyone else’s income.  The Red Cross is tax exempt, but the salaries of Red Cross employees is taxed just like anyone else’s salary.

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1 minute ago, brianstl said:

And the tax exempt status of the collective doesn’t make that income to the player tax exempt.  Today it is just as taxable as anyone else’s income.  The Red Cross is tax exempt, but the salaries of Red Cross employees is taxed just like anyone else’s salary.

This is true, but the red cross provides services that go beyond the salaries paid to its employees. It is these services they provide (for example disaster relief) that qualifies them as a charity.

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1 minute ago, Old guy said:

This is true, but the red cross provides services that go beyond the salaries paid to its employees. It is these services they provide (for example disaster relief) that qualifies them as a charity.

You don’t have to provide charity services to be a tax exempt organization.  Most tax exempt organizations don’t provide any charity services.

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15 minutes ago, brianstl said:

There are tons of tax exempt organizations that aren’t charities.  Is is a NIL collective any less deserving an organization for tax exempt status than one that throws money at people to influence public policy and legislation?  How do you determine that?

Those kind of decisions get into risky legal territory.  It would be hard to single out the collectives.  What we really need to do is change the law and take tax exempt status from a bunch of organizations.

I agree with what's in bold. It's way too easy to get tax exempt status.

And yes, an NIL collective is less deserving of other organizations of tax exempt status. It's a brand new idea that exists for boosters to funnel money to college athletes. Giving them a charitable arm - which isn't always the case - is a savvy but shady way to make them look more legit. It's like the glut of religious charter "schools" that exist to house a basketball program. We shouldn't be letting this stuff fool us.

The people who have the ability to throw big money at athletes to benefit their alma maters are going to be a lot of the same people who know how to get around paying taxes. It's no wonder they've already found a way to combine tax avoidance and aggressive boosterism in the earliest days of NIL's existence.

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40 minutes ago, brianstl said:

You don’t have to provide charity services to be a tax exempt organization.  Most tax exempt organizations don’t provide any charity services.

True, but from the point of view of the donors it really does not matter if the place they donate money to is tax exempt or not, what matters to the donors is whether they can donate to the organization and get a tax deduction.

The red cross makes income on their own by selling blood and blood products to hospitals, but you cannot claim a deduction in your income taxes for the value of the blood pints (the raw material the red cross processes) you donated to the red cross during the year.

I still do not see why the government should assign a tax exempt, or charity, status to a place that farms donations to pay NILs.

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23 hours ago, brianstl said:

You don’t have to provide charity services to be a tax exempt organization.  Most tax exempt organizations don’t provide any charity services.

Well while that is technically true they do have to provide some socially redeeming service or activity to the community.  Now I realize that is open to a broad definition.

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This may indeed be a "nothing burger" but it will be something that potential wealthy NIL donors capable of making deals with players will have to consider. I think somebody labelled situations like these "the wall of worry."

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13 minutes ago, cgeldmacher said:

Some team like Detroit will get busted while the pay for play runs rampant among the blue bloods.

In other words, the NCAA will continue the same enforcement policies that they have been following for many years.  Sounds about right….

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On 5/9/2022 at 3:02 PM, HoosierPal said:

Maybe I don't want to know the details.  But from these two sentences, kudos to Mr. Davis for giving some of his NIL to his teammates.

Copied from article by Adam Zagoria.

Mike Davis previously told The Detroit News his son would transfer because he could earn six figures in NIL opportunities elsewhere. He said Monday the NIL deal just happened to come through the day his son was announcing his future plans.

Under the deal, the company will produce custom limited edition GlowBalls for Davis for the 2022-23 season. Antoine is creating a custom logo for the GlowBalls, and has agreed to donate from the product sales to the Detroit Mercy athletic program.

“They’re going to give him like 20,000 balls just to sell, and then he’s going to give a percentage to his teammates,” Mike said, adding that his son could potentially make up to six figures in total.

“Yes,” Mike said.

“His NIL is like the real NIL because he has to sell balls. He has to sell that basketballs that he wants to share [the income] with his team and with the other athletes on the campus, too. That’s the biggest part of that deal.”

He added: “His image will be on there [the balls], like maybe all-time 3-point leader for freshmen in the history of college basketball. He basically has to have his likeness on there.”

Mike Davis said the transfer decision “came down to today and everything worked out for him.”

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3 hours ago, HoosierPal said:

Copied from article by Adam Zagoria.

Mike Davis previously told The Detroit News his son would transfer because he could earn six figures in NIL opportunities elsewhere. He said Monday the NIL deal just happened to come through the day his son was announcing his future plans.

Under the deal, the company will produce custom limited edition GlowBalls for Davis for the 2022-23 season. Antoine is creating a custom logo for the GlowBalls, and has agreed to donate from the product sales to the Detroit Mercy athletic program.

“They’re going to give him like 20,000 balls just to sell, and then he’s going to give a percentage to his teammates,” Mike said, adding that his son could potentially make up to six figures in total.

“Yes,” Mike said.

“His NIL is like the real NIL because he has to sell balls. He has to sell that basketballs that he wants to share [the income] with his team and with the other athletes on the campus, too. That’s the biggest part of that deal.”

He added: “His image will be on there [the balls], like maybe all-time 3-point leader for freshmen in the history of college basketball. He basically has to have his likeness on there.”

Mike Davis said the transfer decision “came down to today and everything worked out for him.”

That's sick

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8 minutes ago, Dr. Holly Hills said:

Straight up clown show.

True.  If I had to select between an NCAA investigation team and the Keystone Kops to investigate something, I’d go with the Keystone Kops every time….

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3 hours ago, RiseOfTheBillikens said:

That's sick

6 hours ago, HoosierPal said:

Copied from article by Adam Zagoria.

Mike Davis previously told The Detroit News his son would transfer because he could earn six figures in NIL opportunities elsewhere. He said Monday the NIL deal just happened to come through the day his son was announcing his future plans.

Under the deal, the company will produce custom limited edition GlowBalls for Davis for the 2022-23 season. Antoine is creating a custom logo for the GlowBalls, and has agreed to donate from the product sales to the Detroit Mercy athletic program.

“They’re going to give him like 20,000 balls just to sell, and then he’s going to give a percentage to his teammates,” Mike said, adding that his son could potentially make up to six figures in total.

“Yes,” Mike said.

“His NIL is like the real NIL because he has to sell balls. He has to sell that basketballs that he wants to share [the income] with his team and with the other athletes on the campus, too. That’s the biggest part of that deal.”

He added: “His image will be on there [the balls], like maybe all-time 3-point leader for freshmen in the history of college basketball. He basically has to have his likeness on there.”

Mike Davis said the transfer decision “came down to today and everything worked out for him.”

Analyze what you know about this deal. I think they are wrong about how much money the kid is going to make out of selling 20,000 out of a "limited edition glow basketball line." Glow basketballs sell for about $30 in Amazon, so potentially we are talking bout $600,000 raw sales revenue for the 20,000 balls. I am pretty certain that unless the total number of limited balls allowed in this run is specified in the contract, the company may make a much higher number of balls than the 20,000 ball batch specified. The kid also agreed to share his proceeds with Detroit Mercy Athletic program, and has promised to share his take with his team on top of it all.

There are all kinds of expenses involved in here including production and selling expenses, company taxes, company overhead and the % donation to Detroit Mercy Athletic agreed upon. The kid has to pay his own agent fees, his income taxes, and the amount he will share with the team that he promised. His actual take will be dependent upon how the deal's details are structured in the NIL contract. I honestly doubt this kid will wake up one morning and find out a number of semi's in front of this house with his 20,000 basketballs, which he then will have to store and sell. I assume the company will do the leg work and give him the profits (minus the share sent to the Detroit Mercy Athletic program) from a 20,000 ball batch sale. He is not likely to see anything close to $600,000 coming to him.

This is not a simple "I give you money, you play basketball" NIL deal.

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8 minutes ago, Old guy said:

Analyze what you know about this deal. I think they are wrong about how much money the kid is going to make out of selling 20,000 out of a "limited edition glow basketball line." Glow basketballs sell for about $30 in Amazon, so potentially we are talking bout $600,000 raw sales revenue for the 20,000 balls. I am pretty certain that unless the total number of limited balls allowed in this run is specified in the contract, the company may make a much higher number of balls than the 20,000 ball batch specified. The kid also agreed to share his proceeds with Detroit Mercy Athletic program, and has promised to share his take with his team on top of it all.

There are all kinds of expenses involved in here including production and selling expenses, company taxes, company overhead and the % donation to Detroit Mercy Athletic agreed upon. The kid has to pay his own agent fees, his income taxes, and the amount he will share with the team that he promised. His actual take will be dependent upon how the deal's details are structured in the NIL contract. I honestly doubt this kid will wake up one morning and find out a number of semi's in front of this house with his 20,000 basketballs, which he then will have to store and sell. I assume the company will do the leg work and give him the profits (minus the share sent to the Detroit Mercy Athletic program) from a 20,000 ball batch sale. He is not going to see anything close to $600,000 coming to him.

This is not a simple "I give you money, you play basketball" NIL deal.

Relax old guy. I just think it's a cool idea. And an actual NIL the way it's supposed to be used... I guess. I understand it's not that simple.

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3 minutes ago, RiseOfTheBillikens said:

Relax old guy. I just think it's a cool idea. And an actual NIL the way it's supposed to be used... I guess. I understand it's not that simple.

Of course it is a good idea, primarily for the company. A logo from a recognizable star on the company's product line is a great sales idea. If this is limited to profit sharing of a 20,000 ball batch with the kid, the company is golden, as long as the kid has a great season. You can be certain that the contract signed protects the company in all kinds of different ways.

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Looks like a new SLU student athlete is going to give Fred Thatch and his pickles some competition in terms of entrepreneurship!  In today’s paper, under the scholar athletes, for Webster Groves they highlighted Ellie Paloucek, who will be on the women’s soccer team this fall. In this, she mentioned that she and 3 friends of hers started their own company, called Stickable. They make customized stickers for people and businesses. Check out Stickable.com

Not bad for a high schooler! And Coach Katie Shields is high on her soccer skills too.  Support your SLU student athletes

 

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45 minutes ago, Lord Elrond said:

Looks like a new SLU student athlete is going to give Fred Thatch and his pickles some competition in terms of entrepreneurship!  In today’s paper, under the scholar athletes, for Webster Groves they highlighted Ellie Paloucek, who will be on the women’s soccer team this fall. In this, she mentioned that she and 3 friends of hers started their own company, called Stickable. They make customized stickers for people and businesses. Check out Stickable.com

Not bad for a high schooler! And Coach Katie Shields is high on her soccer skills too.  Support your SLU student athletes

 

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8 hours ago, RiseOfTheBillikens said:

Relax old guy. I just think it's a cool idea. And an actual NIL the way it's supposed to be used... I guess. I understand it's not that simple.

OK, look at it from the point of view of the player's family. There is a very good chance that they are plainly not qualified to review and find the pitfalls of a NIL contract like this one offered to the kid. How about their agent? The agent is likely to be out to make money for himself; just look at the advise Willie Reed got from his agent. I bet this kid and his family are not likely to understand the concept of "caveat emptor," which in this case should be "signer beware" instead of "buyer beware." Ever heard the saying "fool's gold?"

What is best for the kid should be the mantra of the NIL "revolution", but is it? Is the NIL "revolution" an extension of old games of smoke and mirrors, or switch and bait which are well known in the business world?

 

50 minutes ago, Lord Elrond said:

Looks like a new SLU student athlete is going to give Fred Thatch and his pickles some competition in terms of entrepreneurship!  In today’s paper, under the scholar athletes, for Webster Groves they highlighted Ellie Paloucek, who will be on the women’s soccer team this fall. In this, she mentioned that she and 3 friends of hers started their own company, called Stickable. They make customized stickers for people and businesses. Check out Stickable.com

Not bad for a high schooler! And Coach Katie Shields is high on her soccer skills too.  Support your SLU student athletes

 

Yes, but owning/operating a business and being a star athlete are not necessarily occupations that are compatible with one another, and there is the small problem of maintaining the minimum required school grades involved in here as well. You think a regular high school kid can do all of these things at the same time?

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1 hour ago, Lord Elrond said:

Looks like a new SLU student athlete is going to give Fred Thatch and his pickles some competition in terms of entrepreneurship!  In today’s paper, under the scholar athletes, for Webster Groves they highlighted Ellie Paloucek, who will be on the women’s soccer team this fall. In this, she mentioned that she and 3 friends of hers started their own company, called Stickable. They make customized stickers for people and businesses. Check out Stickable.com

Not bad for a high schooler! And Coach Katie Shields is high on her soccer skills too.  Support your SLU student athletes

 

Stickable has become a legit business for them, was impressed how much the business has grown over the last few years - all while in high school.

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