The four teams in the College Football Playoff used cash payments from fan \u201ccollectives\u201d in unique ways to build their rosters, showing how much an influx of money has changed college sports.<\/p>\n\n\n\n In late 2021, the once-mighty Texas Longhorns had just finished a 5-7 football season, losing six straight games for the first time since 1956.<\/a> \u201cWe need bigger humans,\u201d said Steve Sarkisian, the team\u2019s coach.<\/p>\n\n\n\n That off-season, Texas found a new \u2014 or at least, newly legal \u2014 way to recruit them: cash.<\/p>\n\n\n\n A new tax-exempt charity called Horns With Heart, set up by Texas football fans, startled the sports world by promising<\/a> to pay every Longhorn offensive lineman a salary of $50,000 per year.<\/p>\n\n\n\n It worked.<\/p>\n\n\n\n \u201cMe growing up, I really didn\u2019t have money. So the $50,000, it was just amazing,\u201d said Cameron Williams<\/a>, a 6-foot-5, 369-pound lineman \u2014 the kind of behemoth that even other linemen call \u201chuge.\u201d He had already committed to play for Oregon that year, but switched<\/a> to Texas a week after the charity made its offer. The money was one of the reasons, he said: \u201cI was just thinking about me helping out my family.\u201d<\/p>\n\n\n\n Texas had hoped for five offensive linemen. They got seven \u2014 kick-starting a rebuilding process that has now brought them, two years later, to the four-team College Football Playoff. The Longhorns play Washington<\/a> on Monday night in the Sugar Bowl.<\/p>\n\n\n\n In those same two years, the tactic that helped Texas \u2014 using cash from fan \u201ccollectives\u201d to woo and keep players \u2014 has gone from an anomaly to a necessity in big-time college sports.<\/p>\n\n\n\n These \u201cname, image and likeness\u201d payments through collectives \u2014 permissible under N.C.A.A. rules<\/a> since July 2021 \u2014 along with the loosening of transfer restrictions, have shifted how powerhouse teams are built.<\/p>\n\n\n\n But they have also prompted red flags from the Internal Revenue Service, threatened to create a sense of imbalance within teams, and fostered a culture of secrecy and an uncomfortable push-pull between collectives and schools. They have also undermined the push for gender equity by immensely favoring male athletes.<\/p>\n\n\n\n One way to measure the change is to look at the collectives behind the four football playoff schools: Michigan, Texas, Washington and Alabama. All have reached this point by adapting to \u2014 and exploiting \u2014 this flood of cash from fans to players.<\/p>\n\n\n\n \u201cEvery team in college football has a different approach to N.I.L.,\u201d said Trevor Keegan, an offensive lineman at Michigan, which plays Alabama in the Rose Bowl on Monday.<\/p>\n\n\n\n The collectives at the four semifinalists are among more than than 140 nationwide, competing with each other in a shadowy free-agent market for college talent<\/a>.<\/p>\n\n\n\n Players say the groups\u2019 payments have been a welcome, and long overdue, addition to their scholarships. \u201cIt\u2019s the least they could do, is pay us a little bit for the hours we put in,\u201d said Alabama wide receiver Isaiah Bond<\/a>. \u201cWe\u2019re walking around some days like we\u2019re 85 \u2014 and we\u2019re 19, 20 years old,\u201d he said, describing the physical toll games can take on players.<\/p>\n\n\n\n Mr. Bond said that he had not realized how much money college football generates for the school: at last count, $131 million<\/a>annually. \u201cWhat they\u2019re contributing back, it\u2019s nothing compared to what they\u2019re making,\u201d he said. \u201cBut it helps.\u201d<\/p>\n\n\n\n Texas\u2019 plan to pay linemen \u2014 called \u201cThe Pancake Factory<\/a>\u201d because linemen knock defenders flat, like pancakes \u2014 helped set precedents that dozens of collectives would follow.<\/p>\n\n\n\n The first was how they justified the payments. After all, the N.C.A.A. still prohibits fans from paying players to play.<\/p>\n\n\n\n The collective, called Texas One Fund<\/a>, did it by exploiting the new system, which allowed endorsement-seeking companies to pay players for the rights to their name, image and likeness. Collectives flipped that. They bought the rights, so they could buy the player \u2014 ensuring they remained happy and playing for their school.<\/p>\n\n\n\n Britt Peterson, a vice president of the Texas collective, says he asks donors, \u201cHow much more fun is this than what it used to be?\u201d He encourages them to feel personally responsible for this team\u2019s success. \u201cThis is your team.\u201d<\/p>\n\n\n\n Soon, collectives gobbled up the name, image and likeness system.<\/p>\n\n\n\n At Texas, the collective has paid $14 million to Longhorn athletes since 2021, according to statistics kept by the school. That\u2019s 64 percent of the total payments to Texas college athletes from any source, and more than all the money from the shoe companies, sports drinks and other brands the system was built to serve.<\/p>\n\n\n\n The result: an influx of money to players, even those too obscure to have much value as endorsers. Mr. Williams, the offensive lineman, bought his mother her first cellphone. Adonai Mitchell,<\/a> a wide receiver who caught touchdown passes in the last two championship games at Georgia, bought his 2-year-old daughter what she wanted for Christmas.<\/p>\n\n\n\n \u201cI got her a kitchen. That\u2019s her favorite thing,\u201d he said. \u201cI\u2019ll call her and she\u2019s like, \u2018I\u2019m making carrots!\u2019\u201d<\/p>\n\n\n\n Texas\u2019 collective set another pattern that more than 70 other collectives followed: It organized itself as a tax-exempt charity, meaning its donors get a tax deduction. The groups have justified their charitable status by paying athletes to visit sports camps and hospitals, or to post about nonprofits on social media.<\/p>\n\n\n\n But now, these charitable collectives have a problem: the I.R.S.<\/p>\n\n\n\n After initially approving dozens of collectives for tax-exempt status, the I.R.S. seemed to reverse itself in May. It issued a memo<\/a>saying that collectives might not qualify as tax-exempt after all because their real purpose was to pay players \u2014 not to serve the public good.<\/p>\n\n\n\n \u201cYou can\u2019t just take a collective or a booster club, turn it into 501(c)(3) and then just pay everybody just whatever the heck you want to pay them,\u201d said Andrew D. Morton, a nonprofit-law attorney at the firm Handler Thayer, citing the tax code section that describes tax-exempt charities.<\/p>\n\n\n\n Mr. Morton said the I.R.S. could shut the collectives down or impose penalty taxes if they do not change course.<\/p>\n\n\n\n Texas\u2019 collective says it is considering changes that would overhaul its spending and give a larger portion of its money directly to other charities.<\/p>\n\n\n\n For now, Mr. Peterson said the group is looking for charity work valuable enough to justify what it pays football players. But the collective paid football players $1.8 million this fall alone. What kind of part-time charity work would justify that?<\/p>\n\n\n\n \u201cIf you carve football out of this, all of this probably works,\u201d Mr. Peterson said. But he said the collective cannot carve out football: It accounts for 81 percent of all the money it spends.<\/p>\n\n\n\n Alabama, one of college football\u2019s most successful teams, initially resisted this change. Coach Nick Saban even blasted rival Texas A&M for using collectives to recruit players. \u201cA&M bought every player on their team,\u201d he said<\/a> in May 2022. \u201cWe didn\u2019t buy one player.\u201d<\/p>\n\n\n\n Then Alabama played Texas A&M that year, and almost lost<\/a> for the second consecutive year. The next season, Alabama had two new collectives, which illustrate another key facet of this emerging industry: its secrecy.<\/p>\n\n\n\n Many collectives say next to nothing about themselves, guarding a competitive advantage by preventing rivals \u2014 and athletes \u2014 from figuring out what players are actually paid.<\/p>\n\n\n\n One for-profit company called Yea Alabama releases few details about what it raises or spends. The company even declines to describe itself as a collective, calling itself merely an \u201centity<\/a>.\u201d<\/p>\n\n\n\n Alabama\u2019s other collective is a tax-exempt charity called Walk of Champions. One of its board members, Elliot Maisel, told The Times earlier this month that the university had told his collective how much to pay each team. Mr. Maisel estimated that the amount for the football team worked out to $2,500 per month, per player.<\/p>\n\n\n\n \u201cThe coach and the athletic department determine all that. We don\u2019t have that discretion. We don\u2019t want it,\u201d Mr. Maisel said.<\/p>\n\n\n\n N.C.A.A. rules bar university staff from \u201csecuring or negotiating deals<\/a>\u201d on behalf of student athletes. The organization, however, has shown little appetite for a crackdown on collectives that are too close to their schools. In fact, its most recent proposal<\/a> would allow schools to take over the collectives\u2019 work and begin paying athletes directly.<\/p>\n\n\n\n On Saturday, the president of Mr. Maisel\u2019s collective, a former Alabama quarterback named John Parker Wilson, disputed Mr. Maisel\u2019s account, saying that the collective was not \u201ccontrolled, directed or managed\u201d by the university. He said the group had only ever paid two athletes.<\/p>\n\n\n\n At the same time, Mr. Maisel changed his own account. He said that despite being a member of the collective\u2019s board since its beginning in February, he did not know how its money was given out. <\/p>\n\n\n\n Collectives don\u2019t just attract players: They help retain them, providing a counterweight to the pull of the N.F.L.<\/p>\n\n\n\n A year ago, Washington\u2019s football fortunes had been resurrected with stunning speed. A new coach, Kalen DeBoer, and a new quarterback, Michael Penix Jr., who stepped into a program that had been a mess on and off the field, led the Huskies to their second-best record in 22 years.<\/p>\n\n\n\n But Mr. Penix and several core members of the revival seemed likely to pass up their remaining eligibility and enter the N.F.L. draft, meaning Washington\u2019s giant leap forward might be followed by a step back.<\/p>\n\n\n\n Then another rally kicked into gear.<\/p>\n\n\n\n Washington\u2019s collective, Montlake Futures, had struggled to find its footing in what amounted to a chaotic start-up industry. So a little more than a year ago, Andrew Minear, who had built a career as a nonprofit fund-raiser in Seattle \u2014 including nearly a decade raising millions in Washington\u2019s development office \u2014 was brought in to lead the program.<\/p>\n\n\n\n Mr. Minear wanted to keep money from being the reason Mr. Penix and others would leave for the N.F.L., which offered a minimum salary of $750,000 this season. \u201cIt wasn\u2019t a sticky note with a dollar amount,\u201d he said. Nor was there an attempt to match their draft projection with a dollar value.<\/p>\n\n\n\n Instead, he said, the collective laid out a plan for the players to maximize their endorsement value by working with nonprofits, which would burnish their brands when they turn pro and their legacy in the community.<\/p>\n\n\n\n Mr. Minear said the collective\u2019s revenues, which cover athletes for all sports, have improved to about four times its federal filings for 2022, which were $2.02 million. (Washington\u2019s athletic department projected an $8 million deficit for the 2024 fiscal year, according to The Seattle Times<\/a>.)<\/p>\n\n\n\n \u201cIf you stack us up with Oregon, Alabama, L.S.U. and other schools and what they do, we\u2019re not at the top of the list,\u201d Mr. Minear said. \u201cBut with what we do, we\u2019re probably efficient.\u201d<\/p>\n\n\n\n And if Montlake Futures\u2019 cash reserves weren\u2019t flush, Mr. Minear had something few college programs could sell \u2014 the opportunities that come with being anchored in a sports-thirsty, major league city like Seattle. Tuscaloosa it isn\u2019t.<\/p>\n\n\n\n \u201cHow they did it and kind of having us work with not just random companies, but nonprofits, it was pretty cool,\u201d said Troy Fautanu, the anchor of the offensive line, who added that money was a factor in his return, but \u201cnot everything.\u201d<\/p>\n\n\n\n The plan has kept players at Washington. Mr. Penix announced his return last December and recently finished as the Heisman Trophy runner-up. Ultimately, he was joined by the headlining receiver, Rome Odunze, and the game-changing pass rusher, Bralen Trice, who, along with Mr. Penix, are considered first-round draft picks.<\/p>\n\n\n\n \u201cAll those guys could have left last year,\u201d said Dillon Johnson, the Huskies running back. \u201cBut they came back, you know, got some money and they helped their draft stock. So, I mean, in my opinion, I mean, it helped them.\u201d<\/p>\n\n\n\n And everyone else on the unbeaten Huskies.<\/p>\n\n\n\n In this new era of college athletics, it can pay to have a presence. When Michigan safety Rod Moore told reporters after his game-clinching interception<\/a> against Ohio State that he had \u201ccalled game\u201d with his catch, it was a matter of days before Mr. Moore and the school\u2019s marketing arm had trademarked the phrase and began selling T-shirts stamped with the phrase.<\/p>\n\n\n\n Mr. Moore is a textbook example of how name, image and likeness rights were intended to work. But not every Wolverine gets a moment on center stage \u2014 or has the desire to take a star turn.<\/p>\n\n\n\n Mr. Keegan, the offensive lineman, is one of the team\u2019s captains, but a brand ambassador he is not. \u201cI\u2019m not really a social media guy,\u201d he said.<\/p>\n\n\n\n But he is still making out nicely, telling Sports Illustrated<\/a> at the start of the season that he expected to bring in between $225,000 and $500,000 for his final college football season through Michigan\u2019s collectives, Champions Circle and Hail Impact.<\/p>\n\n\n\n The setup at Michigan, which, like Washington, struggled to find its N.I.L. bearings, may signal what the rapidly evolving future of college football looks like if revenue sharing \u2014 something that Wolverines Coach Jim Harbaugh has publicly backed \u2014 becomes a reality. Money will likely be spread somewhat evenly around a locker room with star players earning more through separate endorsements.<\/p>\n\n\n\n Hail Impact was formed as a nonprofit, whose objective is to establish baseline payments to every Michigan football player.<\/p>\n\n\n\n Champions Circle is a for-profit operation, and last year created the One More Year Fund, which raised money to help convince players who might be on the fence about leaving for the N.F.L. to return. Whereas many collectives have leaned on donors for funding \u2014 a model that some view as unsustainable \u2014 Champions Circle has also sought to raise money by selling high-priced experiences to well-heeled Michigan fans.<\/p>\n\n\n\n For example, it advertised a package that included joining the Wolverines for their team dinner before the Ohio State game, and running with the players out of the stadium tunnel and leaping to touch the \u201cGo Blue\u201d banner, a Michigan football tradition since 1962. The price tag: $65,000.<\/p>\n\n\n\n \u201cThat\u2019s a once-in-a-lifetime experience for some of those guys,\u201d said Junior Colson, a linebacker. \u201cThat\u2019s something they love to do, something they cherish because they love being at Michigan. They love being part of the Michigan team. We love having them around.\u201d<\/p>\n\n\n\n David A. Fahrenthold<\/a>\u00a0is an investigative reporter writing about nonprofit organizations. He has been a reporter for two decades.\u00a0More about David A. Fahrenthold<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" By\u00a0David A. Fahrenthold\u00a0and\u00a0Billy Witz, Dec. 31, 2023 David Fahrenthold reported from New Orleans, where Texas and Washington were preparing for their College Football Playoff semifinal. Billy Witz reported from Los Angeles, where Michigan and Alabama were preparing for theirs. The four teams in the College Football Playoff used cash payments from fan \u201ccollectives\u201d in unique […]<\/p>\n","protected":false},"author":1001004,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"_links":{"self":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/15102"}],"collection":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/users\/1001004"}],"replies":[{"embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15102"}],"version-history":[{"count":1,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/15102\/revisions"}],"predecessor-version":[{"id":15103,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/15102\/revisions\/15103"}],"wp:attachment":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Several](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-jtwb\/31nat-ncaa-nil-jtwb-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"Cameron](\"https:\/\/static01.nyt.com\/images\/2023\/12\/30\/multimedia\/31nat-ncaa-nil-qhgc\/31nat-ncaa-nil-qhgc-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"Trevor](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-fmbp\/31nat-ncaa-nil-fmbp-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
Texas Longhorns<\/h2>\n\n\n\n
![\"Fans](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-twkv\/31nat-ncaa-nil-twkv-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"\"\/](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-01-fbhl\/31nat-ncaa-nil-01-fbhl-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"\"\/](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-02-fbhl\/31nat-ncaa-nil-02-fbhl-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
Alabama Crimson Tide<\/h2>\n\n\n\n
![\"Alabama](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-tmfc\/31nat-ncaa-nil-tmfc-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"A](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-tbgc\/31nat-ncaa-nil-tbgc-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
Washington Huskies<\/h2>\n\n\n\n
![\"Michael](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-ghzw\/31nat-ncaa-nil-ghzw-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"Dillon](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-jqcl\/jqcl-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
Michigan Wolverines<\/h2>\n\n\n\n
![\"Several](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-tvzf\/31nat-ncaa-nil-tvzf-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")
![\"Junior](\"https:\/\/static01.nyt.com\/images\/2023\/12\/31\/multimedia\/31nat-ncaa-nil-mvbw\/31nat-ncaa-nil-mvbw-articleLarge.jpg?quality=75&auto=webp&disable=upscale\")