Finance Uncategorized

Website enables fans to pay graduating NCAA athletes

FanPay offers fans the opportunity to pledge money to student-athletes if they graduate from college.

(John David Mercer-USA TODAY Sports)

A new online startup is offering college sports fans an opportunity to directly compensate their favorite student-athletes.

FanPay, a Chicago-based website founded by four Notre Dame graduates, enables fans to pledge money on behalf of specific NCAA student-athletes. Funds are held in escrow and are distributed only if the student graduates from college. If a student-athlete leaves school early or refuses to accept FanPay’s money, the site will refund the pledges.

(Matt Cashore-USA TODAY Sports)
(Matt Cashore-USA TODAY Sports)

“This application could be a great thing for college sports,” co-founder Kelly Garvy explained to The Fields of Green. Some of Garvy’s partners “had been working on the application of technology in organizations and communicating ideas and sharing” and saw an opportunity to use “technology to realign the incentives” in college sports.

FanPay has set an aggressive goal of “being ubiquitous and a part of college sports.” Its founders have found a way to monetize the site, taking a small percentage ­– between four and six percent – from every transaction; the site accepts pledges via bank transactions, credit card, or even bitcoin. Though the site would consider donation limits to prevent exploitation by big donors, Garvy suggested that such manipulation is “already happening” in college sports and questioned whether it’s wrong to pledge large sums to athletes “if it’s the market value for someone.”

(Kirby Lee-USA TODAY Sports)
(Kirby Lee-USA TODAY Sports)

According to its founders, FanPay has reached out to the NCAA but has yet to receive a response. Garvy insisted that FanPay “would like to work with schools and come to arrangements that work for everybody.” However, the site has received approximately 150 cease and desist letters from individual universities worried about falling out of compliance with the NCAA.

In a November “Educational Column,” the NCAA clarified that the likenesses and names of student-athletes cannot be used in for-profit crowdfunding and that “once the student-athlete or the institution become aware that the student-athlete’s name or picture is being used to promote a crowdfunding entity . . . [they are] required to take steps to stop such an activity.”

(Dale Zanine-USA TODAY Sports)
(Dale Zanine-USA TODAY Sports)

However, there are potential loopholes: A student-athlete’s eligibility is at risk “once the student-athlete accepts the promise of pay” or “knowingly permits a crowdfunding entity to use his or her name or picture.” So if an athlete doesn’t promise to accept FanPay’s money while still a student, he or she could conceivably still be eligible.

FanPay has a long way to go, especially with regard to outreach and marketing, and has yet to distribute funds to any athletes. However, Garvy admitted that its founders are heartened to see that “the landscape of college sports could very well be changing.” FanPay hopes to challenge the “arms race in a zero-sum game” and, as Garvy explained, “put the college back into college sports.”

You can follow Nick on Twitter at @Nick_Zobel.

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