Is THIS acceptable in the NIL world?

All right, so I read this story over the weekend. It was fascinated because it just doesn't seem like there's a lot here, but you know what? It's college sports, so there's always a lot more than we know about, and maybe that's been the beauty and the curse of college sports for a long time. So the Cavender Twins are women's basketball players who made their fame at Fresno State, and they did so during a time where we weren't allowed to really go and watch. The Cavender Twins are really good basketball players, and they became TikTok sensations. So they decided after last season at Fresno to transfer, went to the University of Miami, hasn't gone so well at Miami. I think they're a bubble team in the women's basketball world, but anyway, Miami was just hit with NCAA penalties for having those two girls have dinner with Miami's most prominent booster that was allegedly set up by the basketball coach Katie Meyer. And John Ruiz is the businessman, and they had a dinner, and he paid for the dinner, which is a violation.

There doesn't seem to be anything else there, at least that anybody can prove, it seems. Yet Katie Meyer was, I think, suspended three games, and Miami was put on probation, which ultimately, this is not a big deal in terms of the punishment, but that's where we are. So Dan Lust, who you can follow on Twitter at sportslawlust, which has so many meanings, also from Conduct Detrimental, the podcast, one of my favorite places to hear about sports and the law and the intersection of the two, is also a professor at NYU, and he joins us on the Adam Gold Show. First, it's nice to talk to the other half of Conduct Detrimental. I talk to Dan Wallach a lot, so it's nice to have you on the program, two Dans.

Am I wrong in thinking that, at least on the surface, there isn't a lot here that would really constitute a violation that the NCAA would get mad about? Well, Adam, pleasure to join you. I think we have to start with my last name is actually Lust, and I tell my students to not call me Professor Lust.

That is my only rule in this class, not calling me that. It's a good way to start. Yeah, no, I think it's a good laugh. So, yeah, a couple things. First of all, yeah, Dan and I have a lot of fun on the show, but this NIL stuff, I tend to find it very interesting. I think where we should start from an initial landscape for people that haven't followed that closely, July 1st of 2021 is the kind of unofficial start of the NIL era. That's when, you know, Florida, in a number of states, their law becomes effective, and the NCAA kind of throws their hands up, and, you know, they're not going to punish kids for violations for accepting compensation.

So, people, I think, know that July 1st, 2021. What is surprising is that we wait 19 months into this NIL era to have the first NIL violation by the NCAA, and they don't pick Alabama football or Texas A&M football or Duke basketball or Kansas basketball or the Tar Heels, right? They pick Miami women's basketball. So, I think to a lot of people that haven't been following space closely, that's got to be a little bit of a head scratcher, and we can talk about the specific offense, but then when you kind of hear, you know, the players involved here, right, these social media basketball playing twins is a very high profile booster driving Ruiz that's involved, you know, then you kind of ask, well, is the NCAA just trying to send a message here to the boosters and, you know, flaunting this type of activity? That's kind of my read on it, because the actual offense is like nothing, right? It's like an impermissible meal at someone's house.

Like, how much does a private chef cost? Like, you know, that's what we're fighting about, but I think it's more the message, and I think, you know, we can get into it, but the start of the Charlie Baker era is almost upon us, so I think that's what it is. Sending a message if you're the NCAA, like, hey, we waited 19 months and look who we went after to guess who's coming next. Well, I think part of the reason why the NCAA was also mad is because the meeting appeared to be brokered by the basketball coach, Katie Meyer, who, look, I'm going to call BS on this part, where she said she had no idea who John Ruiz was.

Like, are we being serious here? Yeah, and I think the other part of it, again, just reading the piece that the NCAA put out of the decision that they published, it's like, you know, who set this up, right? And there's some reporting and, you know, you read enough of the message boards, people are, you know, pointing fingers, but who arranged this meeting? Was it the booster? Was it the agent? Was it, you know, was it the players?

Was it the parents? So, you know, I think that level of chaos, me personally, I think that's maybe a little bit of the NCAA's fault because they have not been anywhere to be found on this NIL or for the last, you know, year and a half. But yeah, it sends you like, how does the basketball coach not know of one of the most high profile, like you and I don't go to Miami. I would imagine that people know who he is, but if that's the person brokering this transaction and you, and like, you know, I gave an example, you know, the other day, it's like, you know, if, if the athletic director of the school had the Cavender twins over to his house, like that's an issue you can't, you know, a booster can't do what the school otherwise, you know, can't do like if the booster can't, can't do what the school can't do, but if the school knows what the booster is doing, then you have this gray area, which I'm sure the NCAA was uncomfortable dealing in.

And that's where I wanted to go next. Dan Lust from Conduct Detrimental, the podcast, which is a great podcast if you are interested in sports and law at the same time. NYU law professor, he's a sports attorney.

You see, he's all over the place, ESPN, Fox, CBS. And that's really where the, when the NCAA balked at the NIL era initially, they came out then and said, it cannot be used as a recruiting inducement, even though there's really no way for them to know this anymore than, you know, payments have been used and, and benefits have been used as inducements before, you know, it's the, it's the same only that it's not the violation of the athlete anymore. It's the, it's, it's purely the violation of the university, really at the hands of the boosters.

So I think, yeah, I think you're, you're, you're spot on right there. And I think where people might've made a mistake in this NIL era early on was thinking that, Hey, if there is some consideration about, which is a fancy legal term to just say, like, you know, if you're doing a, you're mowing someone's lawn, you're going to get $10 back, right? If you are transferring from school A to school B, if you get a million dollars in your pocket, okay. Like let's, let's look at the services that's being provided for that a million dollars.

So with Miami, people have been looking at it. John Ruiz is, you know, throwing money at athletes. We're not going to say it's an improper inducement.

You and I are not going to get sued on the show, but people are the best support to say that. And then you have to ask yourself, well, what are these athletes? Like, what are these athletes giving John Ruiz? What is the consideration?

So for someone like Ruiz, like he, he owns a company called life wallet and it's, you know, apparently commercials that are being done that I don't, you know, I don't see outside the Miami market, but you know, it's $400,000 or $500,000 that's worth a commercial. Um, so maybe that's fine. Maybe that's consideration. But the question is like your point, Adam, that you just raised, we're not in a court of law talking about consideration. Like, you know, in theory, you could have a $1 contract that's consideration, but with the NCA, you're, you're, you're saying, what is the consideration? This quid pro quo, is it enough?

Or does this just seem to be this kind of bald unilateral inducement? And I think that's the mistake that people made in the era thinking that, Hey, this minimal consideration, Hey, that's enough. It's a $1 contract. It's like, Hey, America, half of America was sold for beads, right? You know, you know, that could just be seen as an inducement if you're the NCA. And that's, that's what the NCA viewed as being, um, in this Miami saga. Hey, we still think this is decent.

I don't care if there was a dinner made, right? We still think this is an inducement and we're still going to bring the hammer down. Dan lust is joining us here on the Adam Gold show at sports law lust on Twitter sports attorney. How did the schools, we know that the schools have like the boosters have to know, uh, which of the players are attractive to the schools, whether it's, you know, players coming out of high school or players in the transfer portal, how did the schools and the boosters or the collectives, how did they maintain a level of, we'll just say autonomy or separation. So there isn't obvious bleed over till we get, you know, when we get into these areas of, uh, of violations. It's tough. I mean, I I'll give you Adam, I'll give you a good one, right? Were you following the recruitment of arch Manning to go to Texas?

Absolutely. So, you know, Texas had no shortage of fantastic quarterbacks under the roof. Quinn Ewers, this other, a former, you know, number one, I don't know how many number one quarterbacks are in the country.

This used to be like 20 of them, but yeah. Um, but that's just a question. I don't, I don't have any ties to Texas or anything like that, but like you would think, right. That arch Manning is only going to go there if he has some commitments from the school that he's going to start in a certain amount of time. Right. Um, and he's only going to go there if he's, you would think, right. He has some commitment of dollars that are going his way.

So is it the case that he's speaking to the athletic department separately and he's speaking to the collectives or whoever's coming up with the potential all in financial package or are those conversations somewhat blended together? Right. Um, so that's, that's the tricky part. Um, and that's why I think some of these situations to the extent that litigation results, so there are investigations involving, you know, interviews of athletes or, you know, interviews of perspective athletes, what's going to come out for the NCA because certainly as we just discussed, you can't have a booster wearing the hat, uh, or like the NCA wearing the hat of a booster and say, Hey, booster do X, we can't do it.

You can do it. That's a real problem. Um, and I just, you know, I just find it odd that these big deals happen and everyone just assumes, well, church and state are being kept separate. Right. So it's not talking to the money side, the money side where it just would never happen.

And that's like, I'm not naive. Like they, both sides have to have some level of communication to make this like the boosters need to know which are the athletes that the, that the schools are interested in. Uh, so there has to be some level of communication unless everybody's just a great guesser here.

And maybe they all are. Um, do you think that name image and likeness is working as the law intended initially? Um, yes, largely.

Yes, I do. Um, I, I think the, the word intended an interesting one, cause I think by and large, we, we didn't know that collectives were going to exist where these very wealthy donors would pull their money together and create these like super powered entities that didn't exist. And they're only in the business of finding ways to kind of compensate athletes. I think people assumed it would be Nike deals, Gatorade deals, car dealerships, you know, but that's not necessarily how we intended it, but you know, we live in a capitalist society. People should be allowed to make money. Um, you know, athletes have always had the ability to command those dollars and why wouldn't they be able to, why does someone, a social media influencer that has 5 million followers just because she wears a collegiate Jersey. That's the only reason that she can't make money.

The person that doesn't, that drops off the track team and has 5 million followers, but that's okay. Um, so I think by and large, that part's been interesting female influencers, you know, just, uh, people that aren't really well known in their sport, they just have to have a lot of followers. They're making money, which is great. Um, I don't, I think the unanticipated aspect, which maybe people could anticipate it, uh, is that there seems to be just some level of chaos about what is allowed, what the NCA cares about and what they don't, because we have not seen the NCA up until last week with Miami make any peace with respect for violations. So maybe it's a problem of the NCA zone making, but they, they just kind of let everybody just tread water for a little bit until they wanted to lay the hammer down. So I, I, I certainly didn't predict that the NCA would do nothing for 19 months.

That, that, uh, that was a little hot. Do you think the NCAA's problem was maybe asking Congress to do their bat fight their battle for them? Um, you know, certainly in June of 2021, a month before the NILR, they had asked the two congressional hearings with the NCA, uh, you know, they tried to get into federal bills on then, you know, the commissioners over in the PAC 12, George Kliavkov and, um, Greg, thank you for the FCC. They've been asking for federal legislation very publicly again, now a year and a half in, uh, we still haven't had it. Um, I know, um, good authority that that still seems to be their MO, that the NCAA and the schools, uh, maybe the conferences, not the schools, but we still want to bill federal bills on, um, just hasn't happened. So I can't explain why it's taken so long or if it will happen, but it used to, that's their MO for a year and a half. So they've been asking the federal government to come in. My, uh, my editorial comment on that is because the federal government has no interest in doing it.

So it'll never happen. Uh, and the NCAA is just kind of sitting here waiting for somebody else, uh, to tell them what's right rather than, you know, maybe rethink about, you know, everything about their entire business model. And we'll close on this, Dan lust, uh, at sports law, lust, conduct, detrimental, the podcast, and this, you may have a great answer on this, uh, uh, or not. Do you think we're here if intercollegiate athletics didn't go from a multimillion dollar industry to a multi-billion dollar industry? Uh, I mean, I think there would be less of a push to get athletes paid if the market was six figures instead of five figures instead of seven, eight figures, like we see on some of these deals that are coming out. Um, so probably, yeah, I think the television deal is expanding from, you know, your one or two prime time games, uh, you know, a week to now having college football in every single station across the country matching on, you know, during the week, Sunday games at the bowl season.

Yeah. So I certainly think that pushed it. Um, and who knows, obviously the crowds got louder right around 2014 when the NCA video game decision came out and, uh, you know, I got pulled from the shelves, but that was, that was tens of thousands of dollars at stake. That wasn't millions for each individual athlete.

Um, so I think the fever pitch has gotten a little louder. Um, you know, as you started seeing kind of a, you know, the one and done era, which you guys obviously know over in, uh, you know, North Carolina, these guys weren't really pursuing four year degrees. They were trying to be in and out and they, and there was no concept of amateurs. And once, you know, once the NCA allowed for this one and done era, no one was really at least basketball players, right?

They were not trying to be four year starters, anything that hurt their draft prospects. So once that kind of came and went, um, I think it was kind of inevitable that we would have gotten here. Um, but yeah, I mean, I'm excited to see how this plays out. I have a sense that the NCA is going to be making a lot of noise, uh, the next coming weeks and months or some more violations, but maybe that's just me.

Dan lust at sports law lost the NYU law professor conduct detrimental to podcast. I appreciate your time. I have your number now.

Uh, big mistake on your part. Uh, listen, call me anytime. I'll send you the bill later. Billable hours.

That's who's the big winner is. Thank you very much, Dan. I appreciate your time. My pleasure.

Oh man, billable hours is great. Here's the thing. The schools, I don't believe the schools thought that they would be here, but I'll tell you who did as soon as the laws went in all the money behind intercollegiate athletics. And I'm not talking about the advertisers. I'm talking about the people who greased a lot of palms. They're like, wait a second.

How can we air quotes help? It didn't take very long for collectives to form. The NCAA knew that it was going to be bad.

I mean, bad is probably not the right word. They knew that it was going to be the exact same situation they had for decades. Only other people would be more emboldened to throw more money into the system. So ultimately what we're seeing is a lot of the exact same things, albeit with a lot more money and a lot more freedom of movement. And the NCAA didn't want that.

And I will always say to the NCAA, should have acted a lot sooner to make this system work for everybody, not just you. Now there will be a revert to the mean over time. This system will calm down. I don't think chaos is the right word. I don't think wild, wild west is the right word. I think there will be a settling into a normal rhythm of doing of the way business is done today. I think that's ultimately where we'll be.