Friday Dump 🥟 - New NCAA transfer portal, Windy City media, Caitlin's Nike deal

Author

Michael Sheinfeld
April 19, 2024

What a day for a Friday Dump 🥟

Each Friday, we’ll breakdown 3 sports business stories that have caught our eye throughout the week. They will be assembled in the following format:

🔴 - Stories that make us stop, think, and question.

🟡 - Stories with a hint of risk and unpredictability.

🟢 - Stories that make us feel good to go and empowered.

We’re so excited, we can’t stop dancing.

(Photo: Katelyn Mulcahy/Getty Images)

🔴 NCAA all in on player movement. Sometimes it feels like our college athletics forefathers look back on the beast we’ve created and shake their heads in utter disgust. On Wednesday, the NCAA Division I Council approved a new transfer rule that will allow undergraduate athletes to transfer an unlimited number of times and play immediately, if they so choose. The only things they must adhere to are: 1) meeting specific academic requirements and 2) they are not allowed to transfer midyear and play for a second school in the same season. Previously, the transfer rule allowed athletes to play immediately at the first school they transferred to but they then had to sit out a year if they chose to transfer again.

What are the academic requirements you might ask? Well, the athlete must…

  • Leave their previous institution academically eligible

  • Be in good standing with the previous institution (e.g., not subject to disciplinary suspension or dismissal)

  • Meet all progress-toward-degree requirements at the new institution prior to competing

Ultimately, this transfer rule was updated because in December 2023, seven state attorneys general sued the NCAA in the U.S. District Court for the northern district of West Virginia, arguing that the NCAA’s rule requiring multi-time transfer athletes to sit out a year violates antitrust law.

In a dumpshell…the point of the transfer portal from the beginning has always been clear — it’s all about giving athletes the flexibility and freedom of movement. And now, they can do that even more as long as they hold up their end of the “student-athlete” bargain.

To be clear, this newsletter couldn’t be more go-get-yo-bag 💰. But there is such thing as rules going too far. The transfer portal has essentially been used as a “free-agency bidding war” with the coupling of NIL. Add on the fact that there’s no cap to the number of times an athlete can transfer, it brings up way too many questions, with little answers:

1) With little to no regulations in place, why would athletes care about the team they play for if they have the opportunity to make more money elsewhere from NIL sponsorships? And what would stop them from doing that year after year?

2) Will we see student-athlete graduation rates suffer? If an athlete can transfer multiple different times without ramifications, will they really see progress with their degree?

3) Sure, there are times when transferring is necessary (coach leaves, little playing time, didn’t click with the team, etc.) and those should be accounted for. But allowing athletes to transfer an unlimited number of times opens a pandora’s box of a lack of continuity and stability we’ve never seen before.

🟡 Chicago under one regional sports network umbrella. According to a report from the Chicago Sun-Times, 3 Chicago sports teams: the White Sox (MLB), Bulls (NBA), and Blackhawks (NHL) are closing in on a local media rights deal that would move the teams’ games to be shown on the multi-platform sports network, Stadium. The teams are currently under contract with NBC Sports Chicago, where the contract is set to expire in October. If you’ve never heard of Stadium, don’t worry you won’t have to do the walk of shame like Cersei Lannister. It’s a Chicago-based company that currently offers a series of live games, mostly within college sports, as well as highlights and studio programming. They also have key on-air personalities (who you might have heard of? 😬) such as basketball insiders, Shams Charania and Jeff Goodman. But why is this happening? Well…

  • White Sox and Bulls owner, Jerry Reinsdorf, recently acquired a controlling stake in Stadium that was previously held by Sinclair Inc.

    • If you’ve been with us since the early days, you know Sinclair Inc. has had their issues with regional sports networks (RSNs), starting with their subsidiary, Diamond Sports Group (DSG), filing for bankruptcy.

  • Now that Reinsdorf essentially runs the Stadium platform, he can utilize it in a way so it can operate as Chicago’s RSN — though he still needs to find over-the-air partners (ex. Comcast, DirecTV, etc.) to carry the games…since Stadium doesn’t have the type of background like DSG’s brand, Bally Sports.

Pictured: Jerry Reinsdorf (left) and Michael Jordan in 1998; Photo: AP

In a dumpshell…it’s an interesting move from the owner who still feels like he’s the greatest owner in sports going back to the Michael Jordan-led Bulls. Why is it interesting?

Because RSNs are struggling because cable viewership is declining, while streaming usage is rising…and he’s essentially starting an RSN from scratch.

So why would Reinsdorf purchase Stadium only to have them partner with traditional cable companies? It’s a question we continue to mull over unless Reinsdorf has other plans to create his own Chicago Sports Streaming Service (CSSS)…that one was free for you, Jerry 😉 

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🟢 Caitlin Clark’s seismic shoe deal. On Monday, Caitlin Clark was selected with the #1 overall pick in the WNBA draft by the Indiana Fever. And to put a cherry on top, just yesterday The Athletic reported Clark is nearing a lucrative, $20M+ endorsement deal with Nike. This deal will also include the opportunity to receive a signature shoe deal. Nike now joins her top tier list of sponsors that includes, Gatorade, State Farm, and Panini.

  • Once Clark’s college season ended with Iowa, so did her NIL deal with Nike, which made her a free agent in the apparel endorsement market…where Under Armour and Adidas also made “sizable” offers to the #1 overall pick.

    • Future Hall of Famer, Stephen Curry — who launched Curry Brand as a signature, standalone venture with Under Armour — was apparently also in attendance to pitch Clark.

  • Clark joins a prestigious group of 12 WNBA players (including 3 current players) to have their own signature shoes.

    • Current Players:

      • Sabrina Ionescu (Nike)

      • Breanna Stewart (Puma)

      • Elena Della Donne (Nike)

      • Candace Parker (Adidas) - previously had a signature shoe

      • Diana Taurasi (Nike) - previously had a signature shoe

    • Former Players:

      • Sheryl Swoopes (Nike), Rebecca Lobo (Reebok), Lisa Leslie (Nike), Dawn Staley (Nike), Cynthia Cooper (Nike), Nikki McCray (Fila), Chamique Holdsclaw (Nike)

(Photo: @IndianaFever / X)

In a dumpshell…we keep going back to it, but if you’re new here, welcome to the Caitlin Clark Effect people! She’s kicking ass and taking names…from a business perspective, of course.

From showing off her comedic jabs on Saturday Night Live, to setting viewership records in this year’s WNBA draft (2.4M viewers — 4x as many viewers compared to last year), to her No. 22 Indiana Fever jersey, made by Nike, that sold out on Fanatics’ website two days after she was selected.

The sky’s the limit for her. As long as she continues to play well and be a role model for young girls, the sponsorship dollars will continue to rain on her success.

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