Photo illustration: Cora Veltman.Photo: Jamie Schwabelow/Getty
Earlier this year, NIL university consulting firm Altius Sports Partners signed a four-year “Athlete Services Collaboration” agreement with the University of Michigan. A press release hailed it as part of a “forward-thinking” effort to strengthen UM's name, image and likeness capabilities in collaboration with Learfield, the school's multimedia rights holder.
Key to the deal with Altius was the creation of a general manager position, which will be based in Ann Arbor but will be hired by Altius. UM was his 18th school to participate in what Altius called an “on-campus GM program.” Last month, Western Michigan State became No. 19.
In addition to bringing in a general manager, Altius is also planning to “future-proof” UM's $2.5 billion athletic department against a number of current risks, from athlete unionization to Title IX litigation. I also promised to set it up.
“ASP's team of industry experts helps institutions stay ahead of inevitable change and position their athletics departments for sustained success,” the contract, obtained through a public records request, said. It is stated in Exhibit C of the book.
What isn't written is that Altius' own future appears to be no more certain than the school he's advising. In fact, we can speculate that Altius and his clients' concerns about his NIL are inversely related. As space becomes more stable and predictable, schools may need to rely less on the expertise and responsibility of outside companies.
Over the past two years, as the NCAA has begun lifting restrictions on schools' direct involvement with NIL athletes, Altius has adopted a proximity strategy with an on-the-ground approach reminiscent of the practices of multimedia rights companies like Learfield. I've been doing it. And IMG built its business by making physical inroads into the athletic department.
But MMR companies needed decades to make this happen, and the school's intellectual property, a valuable anchor for their business. Companies like Altius, which was acquired last year by marketing services firm Underdog & Company for an undisclosed sum, do not retain any such rights, including the rights required to enter into group licensing agreements. yeah.
One of the main points the NCAA leverages is that it has so far restricted schools from soliciting direct trades on behalf of athletes. But it may not last long.
Last week, the NCAA's Division I Council unanimously passed a proposal that would allow schools to increase their athletes' involvement in NIL activities by “identifying opportunities” and “facilitating transactions.” The proposal is scheduled to take effect on August 1, but still requires approval by the DI board.
As a consulting firm focused on NIL regulation, what is Altius' value proposition in the face of ongoing deregulation by governing bodies? It's hard to know for sure. Neither Altius founder and CEO Casey Schwab, a spokesperson, nor representatives for Underdog responded to repeated requests for comment. In a statement accompanying the acquisition announcement last November, Underdog co-founder and managing partner Dan Mannix said the current era of college sports is “full of possibility” and that “Altius The acquisition combines our collective experience and creates new opportunities for schools and institutions.” Athletes and brands. ”
Like other college sports third parties, whether it's an MMR firm or an executive search firm, Altius provides athletic departments with the ability to outsource risk. For public universities that are generally subject to state transparency laws, Altius also provides a mechanism to participate in his NIL process avoiding public scrutiny. (That's why Wisconsin refused sporticodemanded that the Altius contract be handed over, arguing that it was held by the university's foundation. )
Even if schools ultimately decide that much of what Altius offers can be done with athletic staff, these attributes could give the company staying power.
Altius has two pillars of business: ASP College, which works with schools, and ASP Brands, which works with companies seeking NIL deals with college athletes. For example, Altius was recognized last week for supporting a new five-year, $25 million NIL agreement between FedEx and the University of Memphis. It's unclear what kind of revenue Altius makes from the brand side, but a review of its current contracts with university partners shows that the company earns a relatively small profit on contracts that universities can opt out of midway through. I understand.
For example, Michigan State plans to pay Altius approximately $1.64 million over the next four years. This is on top of the standard consulting fee of $5,000 per month, and the in-house general manager's annual payments from his $255,000 to his $309,000. But most of that money will go toward compensating GMs who haven't yet been hired. (The Athletic The company was the first to report the financial terms of the deal. )
In an interview, Kurt Svoboda, UM's associate athletic director, said he originally pitched himself to handle much of the NIL work within the athletic department, but that the University of Michigan already has enough space to do it. He said he believed he was in a position of
“I am very frustrated by this very exciting outlook and changing environment around the NIL, which is balanced by very restrictive measures by the NCAA,” Svoboda said. “The Altiuses of the world are able to step in and provide resources that existing experts are not allowed to provide. My complaints aside, this is the path forward for us, and to support our student-athletes more closely.” If that's the way to go, we need to explore that path until the structure within the NCAA changes.”
The fundamental challenge for Altius is no different than the entire NIL-focused consulting and technology business that emerged in the wake of a 2019 California law that gave college athletes the right to promote while playing. . How many of these startups will still be around in the next few years is an open question.
But Altius bills itself as a permanent force, with an audacious roster of executives (including Chairman Oliver Luck) and subject matter experts.
The company, founded by Schwab in October 2020, entered the NIL space touting its ability to guide athletic departments and athletes through the regulatory abyss. That initial proposal would have garnered a number of five-figure contracts from Power Five athletic departments that were scrambling to get their bearings after the NCAA's interim NIL policy went into effect on July 1, 2020. That was enough. One of Altius' early deals, for example, was his 11-month contract with LSU that paid him $56,000.
In an interview with sportico In September 2021, Schwab admitted his surprise at how quickly NIL turned into an “open market, laissez-faire system.” With that in mind, he predicted that by next year, “there will be very few restrictions on purchasing NIL rights.”
Altius officially launched its on-campus GM program in summer 2022. sportico At the time, it was reported that six schools had started: LSU, South Carolina, Virginia, Oklahoma State, Northwestern, and Cincinnati. Two years later, approximately half of the 41 school customers were using the expanded service.
Among Altius' more lucrative contracts is with Oklahoma State, where he signed a second amendment to his original five-year contract in August 2023. His current contract runs through 2028, so OU had to pay Altius $15,000 a month in consulting fees for the first six months. , then $5,000 per month for the remainder of the term. OU's on-campus package includes both a general manager position, which starts at a salary of $225,000 per year and increases by 5% annually, and a “revenue analyst” position, which earns up to $75,000 per year with discretionary bonuses. 20%.
To fill these two positions, Altius will receive a 25% annual management fee, which equates to between $150,000 and $200,000 per year. In Norman, Oklahoma, Altius will net $1.3 million over the next five years, including management and consulting fees.
According to the agreement, Oklahoma State has “favored nation” status with Altius and has the right to renegotiate the agreement if Altius offers new types of pricing models or services to other Power Five schools. That's what it means. Oklahoma, like other schools, has the right to terminate his most recent contract within two years.
At the other end of the financial spectrum, Altius' contract with South Carolina State, which will pay Altius $80,905.23 this year, gives the school's on-campus NIL GM about three times as much revenue as Oklahoma State. This suggests that it is 1. South Carolina's agreement runs through June and states that if at least three Altius employees are not on the Gamecocks' campus as of December of this year, the parties will use their best efforts to agree to terms of an extension. ing. Currently, Altius has only one employee: a general manager. A South Carolina spokesperson said the school is “actively exploring future opportunities with ASP,” adding that the school is “a great partner in this space.”
Other Altius GM program participants include: Rutgers will pay Altius $137,849.99 annually. Cincinnati pays $173,092.60 annually. And Iowa State will pay him $546,555.28 over her three years.
That's not a huge change, but it's also not a return that would necessarily satisfy private equity. (Five months before his acquisition of Altius, Underdog & Company was acquired by his PE firm NewSpring Capital.)
Another obvious challenge for Altius to capitalize on its on-campus GM program is finding people to do the job. According to Altius' website, the company has GM contracts with 19 schools, but has only staffed 13 campuses so far. Svoboda said there is currently no timeline for when the University of Michigan's GM role will be filled, but if history is any guide, it could take some time. Consider that Altius announced earlier this month that he had filled his NIL GM position at Rutgers, more than a year after the parties entered into an agreement to create the position.
