Fan offers new way to compensate college athletes: Crowdfunding

The Clemson Tigers, with a 13-0 record and the No. 1 seed in the College Football Playoff, are perched atop the college football world. Their dream season already has produced priceless exposure for the university and a multimillion-dollar playoff payout for the Atlantic Coast Conference.

Now, a group with strong Clemson ties wants to make sure the next wave of players sees a piece of the money that has flooded college sports. And they think they can do it without breaking NCAA rules.

The answer to the riddle of putting money in the hands of amateur student-athletes, who according to the NCAA cannot be paid, is crowdfunding, said Rob Morgan, a Clemson business school graduate and Greenville-based anesthesiologist. His new website, UBooster, was launched Friday with the goal of soliciting payments for high school recruits from fans, and delivering the money to the athletes after their college careers end.

“We think this is the direction college sports is headed,” said Morgan, who has been helped in his venture by a former Clemson football player and the interim dean of the university’s business school. “At some point, there is going to be an opportunity for players to make money, and here’s how we can be a part of it.”

The NCAA has aggressively pushed back against efforts to pay athletes, including crowdfunding, and officials will likely challenge this model, too. But Morgan said he and his advisers have examined the NCAA manual and believe they are not violating any current rules.

Morgan, a Clemson football fan, has closely followed the antitrust lawsuit brought against the NCAA by the former UCLA basketball star Ed O'Bannon. Morgan said he agreed with that suit’s main argument: that college players ought to be compensated when their images are used in television broadcasts. Last year, he sought advice from one of his former Clemson professors, Robert McCormick, who served as an economic expert for the O'Bannon plaintiffs, on how a private citizen could help players. UBooster is the result. (McCormick has since been named interim dean of Clemson’s College of Business and Behavioral Science.)

The business model is simple. Fans pledge money to individual recruits, and can leave public notes on the site urging them to attend their favorite college. Morgan said all high school recruits – men and women in every sport from Division I to Division III – will be eligible, though it would seem obvious that most of the interest and money would be directed at top-flight football and basketball prospects. UBooster will then hold the funds in a trust before turning them over to the athletes after their college careers. The athletes would eventually receive the money regardless of which university they chose to attend.

The idea, Morgan said, is three-fold: to ease the uncertainty of cash-strapped athletics departments under legal and public pressure to do more for athletes; to provide players a nest egg to start their lives after college; and to offer fans a direct role in recruiting. UBooster, meanwhile, takes five cents of every dollar pledged.

The trust funds, Morgan noted, are similar to those proposed by federal judge Claudia Wilken when she ruled in O'Bannon’s favor two years ago. An appellate court has since overruled the trust funds, a decision O'Bannon’s lawyers are appealing.

“Too many players have no connectivity to the job market because of the demands of their sports,” said Patrick Sapp, a former Clemson linebacker and UBooster board member who now works in fundraising for Clemson. “This money can be a bridge to that first job.”

Athletics departments first confronted the issue of crowdfunding last year when a few websites began similar efforts, including an earlier version of UBooster that would have taken fans’ pledges and funneled the money directly to university athletic departments. Morgan and another site called FanPay received cease-and-desist letters from a number of colleges who claimed they were violating NCAA rules. Clemson, which has no association with UBooster, was among the schools that sent one to Morgan.

The NCAA, which approved new scholarships that give athletes an extra few thousand dollars this year, also published an educational letter on its website stating that athletes who accepted the promise of pay, even after their college careers, were jeopardizing their eligibility.

Gene Marsh, a former head of the NCAA’s Committee on Infractions, remains skeptical that crowdfunding has much of a future in college sports. “This is far more sophisticated than the hundred-dollar handshake, but I don’t think it can fly under the current regulatory system,” he said, adding the site could give boosters more control over their favorite athletic programs. “If they don’t like a coach, they already have their checkbooks out to fire him. Now we want let them build a war chest to sign one player?”

This story was originally published December 30, 2015 at 1:00 AM with the headline "Fan offers new way to compensate college athletes: Crowdfunding."