Q&A with Athliance CEO Peter Schoenthal talking all things NIL
There is a lot going on right now in the fight between college athletes and the NCAA for players to finally earn their name, image and likeness rights. To learn more about the fight for rights, The Knight Report spoke with Peter Schoenthal, the CEO of Athliance which is an NIL opportunity management software platform designed to give compliance departments the necessary resources to keep student-athletes in the game.
Check out our full Q&A with Schoenthal to learn more about the latest of what is going on in the fight for rights.
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THE KNIGHT REPORT: So let’s start from the beginning, how do you first think of the idea to start Athliance?
PETER SCHOENTHAL: Football saved me. My dad wasn’t around when I was in high school and I was lucky enough to have high school football coaches invest in me and my well being and because of them I went to college, which I wouldn’t have done if not for the game. So I went to Florida State, went down a bad path when I was in college, had a conversation with one of my old high school coaches, the same one who pushed me to go to college and he gave me quite the tongue lashing and he told me he thought I could be a good lawyer. Literally the next day I signed up for the LSAT and was lucky enough to get into the University of Miami law school. While I was in law school, I wanted to give back so I walked back across the street to an inter-city park and I coached youth football. Now I’m the world’s worst coach because I was coaching 10-13 years old's and I had kids go to Alabama, Florida, Florida State, Miami, Ohio, South Florida and others, but I couldn’t win a championship. But when they went to high school they started to get recruited, so I stayed in their lives as mentors.
I’ve followed recruiting my whole life, I’m a football junkie and I didn’t want them dealing with street agents because as you know South Florida recruiting isn’t the best. I didn’t want people taking them to schools and pushing them to universities that are not the best fit for them. So if we could drive then we would go, as long as they were doing everything that they had to do off the field. We’d take them to places like Tallahassee, Gainesville, Miami and I was one of the good guys, to the point where the NCAA granted me the ability to be considered a guardian on official visits. So I got very close with compliance officers, since they knew they didn’t have to worry about me. Fast forward I was a criminal defense attorney for a few years and I had a firm.
Now when the name, image and likeness was announced for the state of Florida I had a lot of former players reach out to me and ask if they could make money off of this. My first thought was, wait a minute if I were 18, 19 and even 20 years old, I would have no idea how to file taxes and I really don’t want to represent kids in federal court for tax evasion. So I immediately got together with some friends and we met with a tech company to talk about how we can better protect these kids. It was all nice and dandy for us to talk but we said why don’t we talk to some of these compliance officers to get their insight. We brought a few to Athliance along the way and we asked them about their fears, worries, etc. about the NIL rights and this was last March. They said all the marketing and branding people are in their faces making all these promises and we don’t care about that, the biggest worry was we have no idea how to protect our athletes moving forward to guide them from an eligibility standpoint. Once money exchanges hands, it is too late. We know the legislation is going to say universities can’t bring opportunities, they can’t negotiate the opportunities, so we need to know what our athletes are doing and need something to let athletes tell us, so we built our software. We put those compliance officers on our board and starting this past March they would meet with us once a week to tell us what they like, what they want, how they want it built, etc. Then we signed five pilot schools right out the gate, we have deals with Kansas, Arizona, Pittsburgh, Boston College and Georgetown. I’ve actually had multiple talks with Rutgers too. They told us the same things, what they liked, didn’t like and we would refine, refine and refine and now we have a compliance software that will be ready to go on July 1st. Now when we say it was a compliance software, built by compliance experts, we mean that. I’m not a compliance expert, but I know the legality of things. We have a tech team, but we brought in actual compliance officers to build this.
So now that we broke all that down, explain a little bit about what it is exactly that you do for the athletes?
PS: We built a software that when an athlete gets an opportunity, it allows them to input the opportunity and the details of it into our software so our compliance officers can review, make an eligibility determination so the athlete can go and safely profit off their NIL and then after we help the university to gather the information to disclose it to the NCAA to make sure everything is above board. The NCAA is going to require that schools submit and disclose all these opportunities like the IRS. If the NCAA is like the IRS for the NIL, think of us as QuickBooks for the opportunity. We also educate athletes on the importance of taxes and corporation filings. We also educate them from a financial literary standpoint and we also educate athletes on the do’s and don'ts of the NIL. We don’t do branding and we don’t do marketing. We are big believers that if you are a jack of all, you are a master of none and you can’t afford to do that with eligibility on the line.
Now what is your thinking and you possibly even know the answer to this, but what’s the current happenings between the NCAA and the NIL rights. Is every state going live with their NIL rights in July or just some states?"
PS: I believe every school and every state will be live on July 1st. Now let me explain why. If the NCAA has a legislation that goes through, then we don’t really need state legislation. Because there is nothing on the books that says these kids can’t, what states are doing is getting ready if the NCAA doesn’t push so they can put something on their books to allow kids to make money and profit off their name, image and likeness.
Now let me go back in time. How we got here is because two years ago California announced that they will be doing name, image and likeness beginning in 2023. The NCAA says over our dead body and if your kids do this, they will be deemed ineligible. California said awesome if you do that then we are going to sue you in Federal Court, most likely get taken up by the Supreme Court and we are going to argue amateurism versus employment. Then the NCAA said great , let's do NIL. Now we are in a situation where the federal government hasn’t passed legislation, but that will eventually come. In the short term, the NCAA has a tough decision and there is only one rational choice in my opinion. Right now you have eight states that are going live on July 1st and there will be more coming. The NCAA has a division I council meeting June 22nd-23rd and they will talk about the legislation. One of their missions is competitive balance, making sure everyone has a level field. If they allow these seven states to go forth with this before everyone else, there is an issue for the NCAA. 42 states or less, say maybe 40 states will be at a complete disadvantage compared to the other 10 and they can’t have that. The only remedy would be to sue those states in federal court, file an injunction and stop them from going live on July 1st to August 1st. But then if they do that we are back to square one where those states will countersue the NCAA and we are going to have the amateurism vs. employed convo which the NCAA doesn’t want. The only way to establish that competitive balance and not have a legal mess is to just ratify the proposed legislation at this council meeting. In my opinion, the proposed legislation that was introduced last November is pretty damn good. Long story short, on June 23rd I think the NCAA will announce that every school will have the opportunity to start on July 1st.”
So we’ve seen a ton of players be very vocal in the press, on social media and etc. Most recently we saw players like Geo Baker, Jordan Bohannon and others start the hashtag #NotNCAAProperty and wear shirts with the hashtag in order to promote awareness about the situation.
Do you feel as though them doing all this has only helped to escalate the process or?
PS: Oh most definitely. I don’t know if you saw this a few weeks ago, Florida was ready for NIL rights starting July 1st this year and then all of a sudden the legislature tried to pivot and push it back to 2022. What happened was they did not anticipate the pull and the voice that these athletes have as Mckenzie Milton went on Twitter and so did some other players too and because of them and them alone the Florida legislature went back to July 1st of 2021. These athletes using their voice and their platform absolutely helps push the envelope and get this done quicker.
If it weren’t for those athletes at March Madness like Geo Baker and others with the #NotNCAAProperty hashtags, I don’t know if it gets sped up this much and I don’t know if we’d even be talking about it in the media as much. All of that really got things moving because if you remember Mark Emmerett came out and cancelled his vacation and said we have to figure this thing out and I don’t think Emmerett does that if it wasn’t for that movement.
And that all goes to NIL and why I think it’s going to be bigger than people think. These athletes have a platform and people listen to them. You don’t have to be Trevor Lawerence or Justin Fields, anyone who has a following of over 3,000 people on a social media platform has the ability to have a voice and therefore the ability to earn some money off of their name, image and likeness. Most of these deals are going to be micro deals and they will be $200 here, $300 there and that is what is going to drive name, image and likeness. Even if I’m a DII lacrosse player, I might be the local celebrity back home so I can do a social media post for that local pizza shop back home, I can run a camp or I could give lessons. There are a lot of things people aren’t thinking about, everyone’s first thought is the deals like Coca-Cola or Gatorade that are going to push for the Trevor Lawerence’s of the world, but 99% of these opportunities will be micro deals. The interesting thing about those deals, the smaller ones, is that these are going to put the student athlete at the biggest risk because Coca-Cola and Gatorade have those big legal teams, they are going to know the legislation and what these kids can and can’t do. It’s these smaller shops and parents reaching out for autographs aren’t going to know the rules and they won’t intentionally put kids in harm's way, but they will. That is why it is so important for schools to know about all these opportunities in order to guide their athletes from an eligibility standpoint.”
In terms of recruiting, you mentioned before about how if this isn’t approved some schools will have an advantage as their players can make money while others can’t.
Now to piggy bank off of that and hypothetically speaking it all gets approved, would you say a school like Rutgers can benefit more off of NIL due to their close proximity to places like New York City and Philadelphia?
PS: Nope. I think you can make an argument either way, saying hey we are close to NYC so more opportunities but you also have a bunch of pro teams, celebrities, influencers, bigger companies so that might not help. Now you can look at Tallahassee and see there are no pro teams and a lot of supporters of the university in the town so maybe there are more opportunities that way. I think it’s less market driven and more university driven. How creative can you get with your athletes and teaching them how to be aggressive and how to seek out opportunities while also protecting them. It comes down to schools embracing it, if you have coaches and administrators who don’t like this, are against it and they are trying to dissuade athletes from doing this then it doesn't matter what market you are in, your kids won’t get opportunities and get used against you. Now if you are all about it, all about player development and you support these kids and encourage them, I think your kids will be more successful. Personally I do think you’ll get more deals in smaller markets. The good thing about Rutgers is that you have the big city close, but you also have the college town of New Brunswick as well. They are in a good position where they have both and there will be a lot of good opportunities as well.
We’ve talked a ton about all the positives that the NIL will bring to student athletes all across the country at all levels of the NCAA. Now my question to you is there any negatives in your eyes to all this happening?
PS: I don’t see a negative in terms of how this will impact schools or athletes. The negative is kids are going to be put at risk from not only an eligibility and legal standpoint, but also are at risk of getting taken advantage of and I’ll give you an example. Alejandro Bedoya who is actually a New Jersey native is on our board, he is the captain of the Philadelphia Union. The reason we put him on our board is because, even though he is a dear friend of mine, I feel that the best athletes to discuss name, image and likeness with are MLS players. You have players in the MLS from 5,000 followers up to 1 million followers, so there is a big range. So I said to him, he started with 5,000 followers when he went pro and decided to leave Boston College and you now have 250,000 currently on Twitter, so talk to me about how you get opportunities. He said I’ve been on marketing platforms and I don’t get anything from those, I get opportunities from my DMs and people reaching out to talk to me through Twitter to offer me things. When he first went pro and was in Sweden he got a DM on Facebook saying I’m going to give you $1500 to wear this t-shirt and post about, are you interested? Of course he said absolutely, why not and he’s 23 at this time, they responded to get his bank account info, social security and he quickly realized it was a scam and had a salary already and realized he really didn’t need to do this or whatever. So now these college athletes who are younger, don’t have the luxury of a salary might fall for that and they don’t have someone guiding them from that standpoint. A student-athlete might be vulnerable to give that information up and next thing you know they are the victims of identity fraud. So that is a pitfall as well. Also not knowing the legislation, as it states right now athletes can’t use trademarked logos and some kids might not know that. It also states that they can’t do anything marijuana, alcohol, gambling and others. You’ll have kids not knowing that and getting an NCAA violation not too long after that. So there are pitfalls, but the good absolutely outweighs the bad, but end of the day we have to do whatever it takes to protect these athletes.
End of the day you guys are still a business and you need funding like everyone else, so how is this all beneficial to you guys?
PS: We license our softwares to universities, the first semester (prior to July 1st) we are offering our software to universities for just $1,000. Because it is really hard in my opinion and kind of wild that we still don’t know what name, image and likeness really is. So it’s really wild that people are going out there charging these schools 40k, 50k and 60k when we don’t know what the space is just yet. There are a lot of these fake experts out there and I’m not an expert in college name, image and likeness because you can’t be an expert on something that does not exist. The problem is there are all these people in the field acting like it and to me NIL is like an election, everyone is a prognosticator and telling you how an election is going to go, but nobody knows until we find out how people actually voted. We want to bring people on it up front in order to work with our pilot schools and we are looking at bringing on 20-25 schools that first semester in order to make sure that we fix bugs quickly, pivot, answer tickets because things are going to come out of left field and if you don’t have a software that works with you in fixing and getting answers quickly you could be dead in the water. These athletes have fought for this right for 115 years and it would be a damn shame if they lost it because they didn’t have the ability to get guidance from an eligibility standpoint.
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