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Crowdfunding site FanPay gives cash to college players

posted Jan 16, 2015, 1:34 AM by J Shaw   [ updated Jan 16, 2015, 1:36 AM ]
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Brendan Collins opened two more letters this week and added them to the pile— with 152 just like it.

It is not a pile of fan mail. They are letters from the NCAA requesting that Collins' company, FanPay, cease and desist its operations.

FanPay is a crowdfunding website that allows fans to donate graduation gifts to their favorite college athletes. Contributions are tallied under each players' name on the site, fanpay.org, and held in an escrow account. Once a player graduates and exhausts eligibility, he can claim the pledged funds from FanPay.

"We want to help student athletes to incentivize them to graduate and have a little something after their playing careers," said Collins, who launched FanPay with three fellow Notre Dame University graduates in August.

The site initially limited fans to virtual dollars. FanPay began allowing actual donations on Christmas Day. Contributions have been made to merely 15 college athletes. Cease and desists letters have flowed into FanPay more steadily.

The NCAA contends that FanPay's fundraising model violates regulations governing athlete compensation. According to an educational column posted by the NCAA in November, an athlete's amateur status and eligibility is jeopardized if he accepts the promise of pay from a crowdfunding site, even if the funds are earmarked for the athlete upon graduation.

According to the NCAA, once a player discovers his name is being used on a crowdfunding site, he must initiate efforts to remove his name. Any player who knowingly permits his name to be used on a crowdfunding site loses eligibility.

Collins asserted that FanPay does not attempt to contact athletes directly to inform them that a contribution has been made in their name. He said, technically, the funds are not offered or promised to athletes. After graduation, athletes must contact FanPay to claim the funds pledged to them.

Thus, Collins contended that FanPay operates within NCAA guidelines and that the company is prepared if the NCAA pushes its opposition past cease and desist letters.

"We understand why they send those. They're trying to protect the eligibility of their athletes," Collins said. "We think we've positioned ourselves very well legally. I think any attempt to sue us would be pretty frivolous. We've stated our claim pretty clearly."

When reached Wednesday, the NCAA declined to comment on FanPay or UBooster, the Greenville-based crowdfunding website that allows fans to pledge donations to their favorite school if the school signs a coveted recruit.

Both Collins and UBooster founder Rob Morgan said their websites were fostered while following the Ed O'Bannon trial. O'Bannon, a former UCLA basketball player, sued the NCAA seeking an injunction to reform regulations for compensating athletes for use of their likenesses, names and images.
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On Aug. 8, U.S. District Court judge Claudia Wilken ruled that the NCAA's regulations limiting athletes' compensation to tuition, room, board, books and fees violate anti-trust laws. She said schools can cap the amount but it can be no less than the amount to attend the school.

The NCAA has appealed the judge's ruling to the 9th Circuit Court of Appeals and asked for an expedited ruling.

Former Clemson football player Darius Robinson is a plaintiff on the O'Bannon case. He complimented the premises of FanPay and UBooster to help players, but he questioned the idea of adding another middle man between athletes and the compensation he asserts they deserve.

Robinson said he prefers the compensation model pitched by University of Texas athletic director Steve Patterson in October. Texas is prepared to pay a yearly stipend of $10,000 to each athlete. The stipend would cover expenses above tuition, room and board as well as an additional $5,000 in exchange for the school's use of players' names, images and likenesses.

"It's been given to everyone around the athlete," Robinson said. "As far as the amount of income college athletes bring the universities, it will never be fair. Life isn't fair, but at the same time, more has to be done."

According to a USA TODAY report, representatives from the Power Five Conferences, the Atlantic Coast, Southeastern, Pacific 12, Big 12 and Big Ten, will vote at the NCAA convention Saturday to adjust the scholarship model. In addition to tuition, room, board, books and fees, schools can award incidental costs of attendance.

Those costs will be calculated differently at each school. To follow Texas' stipend model without adjusting other expenses, most programs would need to raise approximately $6 million. Morgan said UBooster is intended to help programs absorb that new expense. He said UBooster also could be converted easily into a direct pay mechanism, like FanPay, if further NCAA legislation allows it.

Robinson's former Clemson teammate Martin Jenkins is a plaintiff on another class-action suit against the NCAA seeking an injunction to allow a free market to pay college athletes.

"Think about the storm clouds on the horizon," Morgan said. "If that becomes the law of the land, then it's very easy for UBooster to be in a situation to help facilitate, so that the schools don't have to panic."

While supportive of more compensation, Robinson contended an open market could create too much room for manipulation.

"There are a lot of people out there that take advantage of college athletes," Robinson said. "Not saying that everybody out there is bad, but at that age you can't be exposed to too much game. A lot of people run game out here in the real world. If you've never encountered it before, never been put in that situation or been taught the game from someone else, you can never catch it."

Collins anticipates the market will open someday. He said, until then, FanPay will continue to push the envelope, despite the mounding pile of letters.

"Even when I was a student, I probably thought it was unfair the special treatment athletes get," Collins said. "It took a little maturing afterwards to really understand the injustice of it. People are more and more comfortable with giving athletes more. We like to think we've been part of that movement a little bit."