Casey Schwab on SEC This Morning on SiriusXM
On October 15, 2020, Altius Sports Partners CEO + Founding Partner Casey Schwab joined Peter Burns and Chris Doering on SEC This Morning on SiriusXM to discuss Altius, NIL, and the future of college athletics.
The following interview has been lightly edited for clarity.
SEC This Morning: Joining us right now is Casey Schwab of Altius. Altius, is that correct, Casey? I’ve got to get used to it since you all are going to be a big player here.
Casey Schwab: Altius. Like “Citius, Altius, Fortius,” the Olympic motto.
SEC: I love it! I think this is fascinating because you have two big players here: LSU and Texas. Tell me about this relationship you have developed with them and what it means for the future of college football.
CS: For sure. First of all, thanks for having me on. There’s a lot going on in the professional sports and the collegiate sports world with COVID and social justice. It’s really interesting when you talk about the NIL – name, image, and likeness – changes coming down the pipe. At any given moment in the last 50 to 75 or 100 years in intercollegiate athletics, NIL would’ve been the biggest change. But right now, it’s at least number three, and rightfully so, with everything else going on.
The partnerships that we’ve forged with LSU and Texas are really about looking at all of the changes that are going to impact the athletic departments from NIL. There’s been a lot of discussion around social media, and rightfully so, where student-athletes are now going to be able to go on social media and get paid above the board within NCAA rules to post things. That’s one of the big areas that is going to be impacted by these NIL rule changes, but there are many others. You think about corporate partnerships for the schools. You have the partners of the schools that may want to get into the game of hiring student-athletes. The idea there is to make the pie bigger. If you have ten bucks a day coming in from a corporate partner, and two or three bucks goes to the student-athletes, you don’t want the pie for the school to go to seven. You want the pie to get bigger, to go to 13 or 14 or even bigger than that.
Education is a big focus of ours. Under the current rules, there’s this interesting lane. Universities and athletic departments are going to be required to educate student-athletes and provide guidance around NIL and hiring marketing reps and doing deals, but they’re not going to be allowed to facilitate the deal. You have to reach a certain threshold to educate, but you can’t go over the line, and schools aren’t going to be able to do the deals for the student-athletes. That’s a big focus of ours too, ensuring that schools are providing what programs like LSU and Texas are known for providing, which is the highest class of education and the highest class of athletic product on the field and on the court. And that’s where we come in to help them navigate this space.
SEC: Casey, I read an article that had a statement from you that said, “I’ve had my eyes on the changing NCAA landscape for several years, and my focus was on how NIL was going to get implemented. There’s going to be a lot of uncertainty as NIL takes shape.” I’m fascinated by this vision you had for how you might be able to make this properly come to market in college athletics, and how your experience working with the NFLPA had some crossover appeal to what was going to be implemented with college athletics.
CS: I started my career at the NFL Network and FOX Sports out in LA doing talent deals, production deals, and programming deals. That was with former professional and collegiate athletes. Talent deals, as you two both know, are a form of NIL. They’re NIL deals. Right of publicity is the legal phrase. That’s where I started my career, in TV with former athletes. The last several years I was at the NFLPA on the for-profit side with current professional athletes. It’s just a natural transition – it’s almost chronologically backwards – from former athletes, to current professional athletes, and now current student-athletes, and a lot of them to-be-future professional athletes. Drawing from those experiences, I’ve had my eyes on the NCAA space. The NCAA is a very unique model in that it’s not a for-profit model. If you think about the professional sports landscape like the NFL or television, where I started my career, those are for-profit entities. You have one north star, and everyone is rolling in the same direction, which is for profit. But in the NCAA you have this interesting dynamic where obviously it’s a business because there’s a lot of money involved, but there are higher ideals at stake, like student-athlete welfare and these “non-profit” ideals or north stars. So what I found fascinating was, “How are you going to implement the infrastructure that allows the student-athletes to go out and monetize their rights, do deals, and maximize their earning potential, while maintaining their status as an amateur student-athlete.” I think it’s very similar, but also very different, to the world I was living in in the professional sports space.
The last thing I’ll say is the NFLPA, the union for NFL players, does so much behind the scenes for the NFL players that most folks, especially the typical NFL fans, don’t understand or they just don’t know. Obviously the headlines are around the collective bargaining agreement and grievances, but the NFLPA, and my role at the NFLPA, was more behind the scenes on the for-profit side doing NIL deals, whether in a group setting with apparel and trading cards and video games, or in the individual setting with NFL sponsors. From that experience, getting to work directly with these young men, these NFL players, it became a passion of mine to open up opportunities, help them get opportunities, and navigate those opportunities in the right way off the field. My focus was almost solely off the field, and I want to take that to collegiate student-athletes from football players to women’s volleyball players, across the board to all student-athletes.
SEC: So Casey, with that being said, If I’m Vanderbilt University here in the SEC, and I’m trying to close the gap between the LSUs, the Floridas, the Ohio States, the Southern Cals of the world, do you feel that your partnership, your company, can close that gap? What is your pitch to a school right now going, “This is why you need to be on board with us.”?
CS: It’s really rooted in the chaos and the unknown. It’s the expertise that we bring from our group, what I’ve been calling our bullpen, of experts ranging from social justice to former athletic directors to a former coach to branding experts. It’s really, “Look, there’s going to be a lot of chaos over the next 6, 12, even 18 months with these rules coming out.” And as we all know when the rules come out there’s going to be changes to the rules. The pitch is to let us check this box and handle it in the best way possible in the country.
To your question about how this is going to level the playing field or going to make the playing field in college athletics greater, my view is that every market is interesting. Take USC, a major program. That’s where I went to law school, so I’ll use them. It’s in LA where there are a lot of distractions. If you go to LA and talk to ten different people, you’re going to get ten different answers when you ask them what they’re doing on a Saturday in the fall. Contrast that with where I went to undergrad, UW-Madison. If you go to Madison, Wisconsin, and ask ten people what they’re doing on a Saturday in the fall, they’re all going to give you the same answer: they’re tailgating and watching the Badgers. So to your questions, I think as long as each school is focusing on the specifics of their local market, whether that be a smaller market like Madison or like Baton Rouge with our partnership with LSU, or whether that’s a bigger market – even Austin is a bigger market with our partnership with Texas – or obviously LA, there’s going to be different opportunities. There’s going to be the big brands – Toyota, Tostitos, Chick-fil-A, Visa, Pepsi – those are going to be bigger deals that I think will be fewer and far between, because these brands don’t have bags of money sitting around waiting to spend. They have budgets just like every other business. Especially during COVID, those sports marketing budgets are being diminished. But if you think about a student-athlete going to a local bar, shoe store, or pizza parlor, and that student-athlete walks in and the manager or owner of the pizza parlor says, “Awesome to have you. Will you post a picture of you and your friends and we’ll give you free pizza this afternoon?”, that’s an NIL deal. To go back to your original question, I think for every school in every market, there are going to be opportunities for student-athletes.
I can go a step further and say Division II and Division III. I grew up right outside a small town called Platteville, Wisconsin, in southwest Wisconsin. That was when Bo Ryan coached at UW-Platteville. When I was growing up, there was a guy named Ernie Peavy who played for the Division III Platteville Pioneers. I promise you that if these rules were in place, and Ernie Peavy had gone down to The Annex, which was a bar next to a pizza place, if he wanted to he could – and I’m not saying this is the best thing in the world – stand in as a guest bartender to get free pizza for him and his friends and post this on social media.
CS: Exactly. When we think about the scope of these NIL deals, it’s much broader than what has been widely talked about, which is six-figure deals for athletes like Sam Ehlinger at Texas. Those will be there, but I think it’s broader than that.
SEC: Let’s head into about your background. Clearly, you’re a sports fan. You went to two universities that have great football programs; I imagine you’re a college football fan. I think the thing that scares the majority of us fans of the sport is how all of this can change the dynamics and lose the amateurism – which I think is a little bit of a joke at this point in time anyway – but keep what’s important about college football and not make it a professional sport. Are you looking at how to keep that balance? Does it scare you, as somebody who is more of an insider and knows the ins and outs, as opposed to us on the outside looking at how things may be different and being reluctant to those changes?
CS: It doesn’t scare me. I think that first of all, and you mentioned this in your last question, there are already disparities between, I’ll just use University of Akron versus Ohio State. You look at facilities and at general benefits for student-athletes, there are already disparities. To what we were just talking about, I actually think the NIL landscape can narrow those disparities, narrow that gap, more than widen it if certain schools are thinking about it the right way or educating their student-athletes about what’s an opportunity, what’s a good opportunity, and what maybe isn’t a great opportunity. That’s in terms of the disparity or the not-level playing field.
In terms of the amateurism or college sports becoming professional sports, I think this is only the latest layer in all of the different balls that are being juggled by student-athletes. I have to think that there’s a way to educate, to arm, to equip these student-athletes to make this a part of their educational experience. And I don’t say that naively in that every college kid in the country is doing everything he or she is told to do. I’m not naïve. However, if you think about what NIL deals are – autograph deals, appearance deals, free pizza, free shoes, like I was talking about before – it’s also building your professional brand and understanding how business works. It’s sports business, but it’s just business. I can tell you that when I was in law school or in undergrad, it would’ve been beneficial for me to understand taxes or to understand what a loan out company is. I view NIL deals as opportunities, is the short answer. I think all these new issues, or new educational challenges or opportunities, that are going to come across their plates are only going to make these student-athletes better professionals when they eventually become former athletes. We used to say this to the NFL players: “There’s one thing that every single one of you has in common. At some point, you’re all going to be former athletes. And when that happens, you’re going to have to find another career and find your why after that.” And I think that’s even more true if you look at the percentage of student-athletes across the board, not just football and basketball but all sports, who are going to play professionally. That’s obviously a low percentage. And even from there, the ones that do, it’s not a long career as a professional athlete. That’s a long answer, but I view all this like an opportunity, broadly, to learn more and be a better professional when you get out and you’re a professional athlete, or you’re not and you’re doing what I’m doing or what you’re doing.
SEC: Casey, my last question for you is – I’m sure you guys have put a number to this – Trevor Lawrence, a big star right now. If this had been in place right now, have you guys calculated what the biggest star of college football would be able to bring in as far as a market value? Have you guys summarized what that number could potentially be?
CS: You’re not going to like this answer because it’s wishy washy, but we have. We have ranges and we have spreadsheets, but at the end of the day there’s a lot of these numbers out in the media, and I think one of the variables that’s missing is what I mentioned before. Every company in sports – Visa, Microsoft, Pepsi, Papa John’s, Pizza Hut, all these brands – they have finite budgets. I think it’s a mistake to say that if there are ten student-athletes that each have 1 million followers on Instagram that each one of them has an earning potential or value of whatever the number is, call it 100-grand. That 100-grand might be split ten ways amongst those ten, or it might go to one or two. So it’s a non-answer answer.
Frankly, I think coaches or folks on the recruiting trail who are committing to dollar amounts to recruits, I think that’s setting themselves up to fail because we don’t know what this market is going to look like. We don’t know how many of those dollars from brands’ budgets are going to shift from professional athletes or from professional leagues or teams. I think that’s the variable that is really unknown. We know there’s a demand in the market, but we don’t know what that demand looks like from a financial modeling standpoint.
SEC: Yeah, and that’s what they’re all trying to figure out right now. Of course, the schools can’t promise that because that’d be a violation of what these name, image, and likeness rules are going to try to be. Casey, we’ve got to run, but it’s going to be a fantastic way for the student-athletes to make a couple of dollars, and we wish you guys well hooking up with the rest of the conferences here and trying to guide them in the right direction, my man.
CS: Awesome. Peter, Chris, thanks for having me.