What is Ohio State doing with NIL? The Buckeyes collectives and whats next, explained -

Two weeks before December’s early signing period, Ohio State athletic director Gene Smith released a statement describing how NIL collectives can help Buckeyes athletes and asking for more fan support.

A week later, coach Ryan Day added to that statement. After being asked about how the ever-changing name, image and likeness landscape is impacting recruiting, he said it had become “the conversation” among prospects.

“As time has gone on, it’s become more and more of a priority for folks. Navigating those times is important,” Day said. “It’s a priority for us to make sure we have everything we need to support our players. We have some folks that are really helping and doing everything that they game, and that’s great, but we’ll need as much help as we can moving forward.”

In the ensuing six months, Ohio State’s NIL strategy has evolved even further. At the time of Smith’s email, he referenced The Foundation, The O Foundation and the Cohesion Foundation as Ohio State’s NIL collectives. Since then, The Foundation and O Foundation have merged and The 1870 Society, a for-profit collective, has launched with backing from Ohio State.

As the athletic department has put a higher emphasis on NIL, the people leading those collectives say they have seen a shift behind the scenes and with recruits.

“There is inertia from the entire athletic department understanding how important NIL is to the future,” said Todd Markiewicz, the president of The 1870 Society. “We are partners even though we are separate entities. You can feel from the top down that there is more of a focus on getting NIL up and running the way it should.”

Still, despite the more aggressive push by Ohio State, there’s a looming wave of uncertainty around NIL, especially when it comes to nonprofit collectives. A memo released by the IRS on June 9 said that many nonprofit collectives should no longer be deemed tax exempt, meaning those who donate would not be able to write it off on their taxes. NCAA president Charlie Baker publicly agreed with the IRS, as well.

“It’s a game-changer and potentially a game-ender,” said Gary Marcinik, president of the nonprofit Cohesion Foundation.

Is Ohio State doing everything it can in the NIL space now? And what happens if collectives aren’t allowed to have tax-exempt status?

While it looks like things have improved for Ohio State, those are complicated questions on the surface — and they will continue to linger as the Buckeyes try to get back in the win column against Michigan and compete for national championships in 2023 and beyond.

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Who are Ohio State’s NIL collectives?

The Foundation: The Foundation was launched in March 2022 and is a 501c3 that supports football and men’s basketball. The nonprofit merged with The O Foundation, which was supporting just men’s basketball, in April. Fans can donate and help the collective online, as it partners the athletes with local charities for appearances.
Cohesion Foundation: Launched in March 2022, Cohesion Foundation is a 501c3 that supports every sport at Ohio State. According to the website, the foundation has partnered with 70 athletes across 18 sports. The collective matches athletes with charities where they can use their name, image and likeness to help give back to their communities.
The 1870 Society: Announced in April 2023, The 1870 Society is the only for-profit collective at Ohio State. Like the Cohesion Foundation, The 1870 Society supports every sport, but it does things in a different way by helping athletes navigate marketing opportunities with businesses. There are eight membership options ranging from $10 to $5,000 per month.

How do Ohio State’s collectives work?

Brian Schottenstein is the co-founder of The Foundation. He created the collective with former Ohio State quarterback Cardale Jones.

He understands that NIL, at times, can have a negative connotation to those who don’t understand how things are run behind the scenes. But for him and many others who run collectives, NIL is something that allows fans to help athletes across the country.

“I think people need to understand NIL is student athletes doing marketing for business or an individual,” he said. “… Everyone goes crazy when you say NIL, but it’s very positive what we’re doing.”

There are a few ways that collectives work. One is the nonprofit sector that Schottenstein and the Cohesion Foundation’s Marcinik entered early.

With 501c3 collectives, their goal is to link athletes with charities where they can be paid for appearances for doing charitable work. For example, Ohio State defensive end J.T. Tuimoloau hosted a no-cost football camp on June 9 as part of his partnership with the Cohesion Foundation.

Reliving the best day — @JT_Tuimoloau football camp with our friends at @KIPPColumbus, @LiveLikeLindy, & @BGCCentralOhio. #ALLinOSU pic.twitter.com/wu7MAIvxtw

— Cohesion Foundation (@cohesionohio) June 20, 2023

The key for the nonprofit collectives is fan donations. The charities do not pay the players. Instead, the collectives connect the two sides and pay the player as part of their contract.

“It’s no different than when a professional athlete gets paid to do charitable work,” Schottenstein said. “Now the charities don’t pay the athletes; we pay them and they do the work,”

Each contract has a base salary for the player based on their value and also includes a non-disclosure agreement, so individual payments are not publicly available.

“It’s better left with non-disclosures and confidentiality,” Marcinik said.

The Cohesion Foundation has expanded ways that fans can donate, including the launch of a 50/50 raffle during Ohio State’s spring game. It raised $22,295, with half of the pot going to the winner and the rest going to the collective. The 50/50 raffles will continue during the regular season.

“That’s a big deal,” Marcinik said. “That’s going to put us in a position to raise a lot of money.”

As the only for-profit collective, The 1870 Society makes money off of NIL deals but also uses its platform to market athletes in a different way. Because of its for-profit status, The 1870 Society is able to pair athletes with businesses around the area for marketing opportunities.

“We are putting together large-scale marketing opportunities, marrying business opportunities with business leaders with the power of the athlete’s NIL,” Markiewicz said.

By rule, The 1870 Society isn’t allowed to speak with recruits before they sign. Once signees are enrolled, it can reach out to the athletes and give them an idea of their value in the marketing world. From there, The 1870 Society can partner them with various businesses around the area.

The wait is over! We're proud to officially announce the Ryan Day Podcast, co-hosted by Ohio's very own @mike96bennett.

The first episode will air at the end of the month exclusively for members of The 1870 Society. 🌰 pic.twitter.com/V8wxPCOTI4

— The 1870 Society (@the1870society) June 14, 2023

How does the IRS memo affect the collectives?

Ohio State has come a long way in the NIL space since Day voiced some frustration in December, though the situation will inevitably continue to change.

The IRS memo questioning the tax-exempt status of nonprofit NIL collectives came about because the IRS believes that in many cases, the benefits athletes are receiving are “not incidental both qualitatively and quantitatively to any exempt purpose.”

How that impacts Ohio State’s collectives is to be determined, but Schottenstein said The Foundation would transition to a limited liability company (LLC) if needed.

“Nothing is in place, but if something were to change, the IRS is really just hurting our charity partners,” Schottenstein said. “Our student athletes do so much good work for the community and it’s one of our main parts of our nonprofit collective. It’s the athletes giving back to the community. … We’d create an LLC and run it in the same fashion as our 501c3 — the only difference would be that the individual donor wouldn’t be able to get a deduction.”

The Cohesion Foundation had a different reaction. If it loses tax-exempt status, Marcinik said that his collective would likely finish up its contracts by the end of the year and dissolve.

“I don’t want to operate in the gray. We don’t want to navigate with any ambiguity,” Marcinik said. “For us, it’s just not where we want to be. Between the IRS and the president of the NCAA saying he agrees with the IRS, that’s enough for us to say let’s conclude our obligations and let this evolve in a different way. We have made a tremendous impact, but it’s unfortunate there are bad actors out there. Some of the good people are going to get swept out.”

How have the collectives impacted Ohio State?

The three collectives share some goals but have important distinctions.

The Foundation is solely focused on football and men’s basketball, while the Cohesion Foundation and The 1870 Society work with every sport. Because of that, The 1870 Society and Cohesion Foundation have worked together. In fact, Marcinik helped set up the board for The 1870 Society and continues to help the organization.

“I hand-picked those people and put them together,” Marcinik said. “What they do is different than what we do so we have constant and open communication with them. It’s really good.”

Marcinik thought it was important that Ohio State also had a for-profit collective. It allows the university to cover all of its bases in the NIL landscape.

As for The Foundation and Cohesion Foundation, there’s not much of a relationship.

“It’s like any business. What they do is different than what we do so there’s no opportunity to weld there,” Marcinik said. “We are all sports, they are very public, that’s just football and basketball.”

🚨Our brand new Experiences MENU is now Live! Visit https://t.co/63y4Qstq0Z to place your orders today! Go Bucks‼️ pic.twitter.com/tRP2dWH7lX

— THE Foundation (@TheFoundation1_) May 22, 2023

As the structure of Ohio State’s NIL efforts has rapidly evolved, Marcinik has seen some things change for the Buckeyes behind the scenes.

Not only has the administration put a high priority on NIL, but the collectives have been able to see what works and what doesn’t for the past year. That’s not only helped the current athletes, but it’s helped in recruiting, as well.

Ohio State no longer has to speculate about what recruits can get financially when they choose to join the program. It has tangible evidence.

“I think it’s gone from, ‘Hey this is what we hope,’ to, ‘This is exactly what we’re doing and if you follow us you’ll get a feel for what we’re doing,’” Marcinik said.

While contracts aren’t available to the public, the Cohesion Foundation has given out more than $1 million to athletes, Marcinik said, while partnering with over 70 athletes across 18 sports. The 1870 Society doesn’t publicize a full list of names, but it announced a partnership with Ohio State safety Cameron Martinez. The Foundation helped raise a six-figure NIL deal for quarterback C.J. Stroud, running back TreVeyon Henderson, wide receiver Jaxon Smith-Njigba and corner Denzel Burke last July and has partnered with 44 athletes between football and men’s basketball, according to its website.

Ohio State football has the No. 4 recruiting class for 2024 in the country in the 247Sports Composite and could continue to build momentum in what is shaping up to be a big month on the trail. Men’s basketball has had a top-10 recruiting class the past two years and the women’s basketball team are fresh off an Elite Eight trip and added Duke transfer Celeste Taylor, one of the best players in the portal, during the offseason.

There’s little doubt that NIL strategies will continue to evolve, but regardless of what the future of collectives holds, the Buckeyes have at least established a base to build on that they needed.

(Photo: Joe Robbins / Icon Sportswire via Getty Images)

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