USC opposes new donor-run NIL collective for football program

USC players head to practice during the first day of fall training camp.

Staff Writer

Aug. 9, 2022 5:13 PM PT

When USC partnered with an outside media company to launch BLVD LLC, the hope was that its unique approach to facilitating name, image and likeness endorsement deals for Trojans athletes would help stave off the rise of a donor-run collective — and keep USC out of the crosshairs of any future NCAA crackdowns.

But less than two months later, The Times has learned that a group of deep-pocketed USC donors and diehard fans are proceeding with their own NIL operation against the school’s wishes.

The group plans to soon launch “Student Body Right,” a third-party collective they say is essential for USC to properly compete with other top schools that feature collectives. They’re hardly alone among Trojans football fans, especially those frustrated by BLVD.

Within USC, however, the effort to start a collective outside of the university’s reach is being viewed as an existential threat that could invite serious scrutiny if the NCAA opts to enforce its NIL policies.

Dale Rech has no such concerns. A Florida-based businessman and lifelong USC fan, Rech was a Trojans football donor into the Pete Carroll era, but grew disenchanted with the athletic department and eventually cut ties. He’s leading the effort on Student Body Right, he says, to offer an NIL alternative to BLVD “for those who want to contribute to the football program without any connection to USC at all.”

The group includes Brian Kennedy, who was once one of USC’s top athletic donors and whose name still graces the Trojans’ practice field. Kennedy’s relationship with USC soured nearly a decade ago, but he confirmed to The Times that he has been involved in discussions about Student Body Right.

Details regarding how payments will be distributed to players have yet to be finalized, but Rech said the collective’s intent is to provide “the equivalent of a base salary” for every member of USC’s football team who is academically eligible. To receive those payments, players would perform community service and take part in charitable work with local organizations.

How that charitable work will be valued or how payments would be divided among players is still up in the air. Student Body Right has filed for 501(c)(3) status as a charitable organization, which would make certain donations to the group tax-deductible. BLVD is not a 501(c)(3) charitable organization.

Student Body Right is not the first outside NIL outfit to apply for such status. Several collectives, including those at Texas, Texas Tech, Notre Dame and Arizona, have either sought or already received the same 501(c)(3) status, even as some experts warn it could invite an audit should either the IRS or state governments decide to take a closer look to whether the collectives exist for charitable purposes.

The murkiness of that definition, coupled with the regulatory uncertainty surrounding NIL, is already making leaders at USC uneasy.

In response to questions from The Times, USC athletic director Mike Bohn issued a statement, representing the university’s position. It refused to acknowledge the existence of Student Body Right.

“Earlier this year, USC worked with Stay Doubted to create BLVD LLC, an agency and media company that provides NIL services to all USC student athletes,” Bohn said. “USC is not aware of a formal donor-created NIL collective. We ask any donors who would like to support USC’s athletes through NIL to please work with BLVD so that all activities are conducted in compliance with state laws and NCAA rules.”

Rech said that his group has consulted with multiple outside attorneys and tax experts while setting up the collective to ensure they’re in compliance with all applicable NCAA rules, however uncertain the current interpretation of those rules may be. New guidelines outlined by the NCAA in May do, however, explicitly prohibit boosters — as well as the collectives they may represent — from being involved in the recruiting process or offering NIL deals as an inducement to sign with a school.

USC could presumably be held responsible by the NCAA for any breach of those rules. But Rech says Student Body Right has no intention of being involved with recruiting or anything involving prospective Trojans athletes. NIL payments would only be made to enrolled athletes who completed the required charitable work.

“This is a standalone collective, with no affiliation or ties to the university,” Rech said. “The NCAA cannot go back at the university as long as we’re in compliance and stay within what the guidelines of the NCAA and state require. There’s no blowback from us on the university. They just want control.”

That power struggle isn’t unique to USC. As third-party collectives have continued sprouting up across college football, universities now find themselves grappling with deep-pocketed donors who may now wield outsized influence in athletics, without any real recourse to keep them in check.

“We feel really good about the way we’re aligned, associated with BLVD, and we’re looking forward to a successful agency that’s going to be compliant with NCAA rules,” Bohn told The Times when asked if the two organizations could co-exist.

When Rech began exploring the prospect of a third-party collective at USC, he says he reached out to BLVD to inform them of his plans and inquire about working together.

“They were confident that they didn’t need our help,” Rech said.

USC quarterbacks Caleb Williams and Miller Moss warm up at practice.

So he decided at the time to pause progress on the collective, as BLVD planned to pitch to members of USC’s Scholarship Club, which includes top-level donors who have committed $20,000 or more to the Trojan Athletic Fund.

BLVD hosted two Zoom meetings last month outlining the organization’s goals. One slide from their presentation, which was viewed by The Times, shows that BLVD set a fundraising goal of $75 million during the next five years, amounting to $15 million per year.

But the presentations also raised concerns from some donors about where their money would be allocated. As explained during the meeting, only 50% of any given donation would be allocated where the donor chose, while the other 50% would be set aside in BLVD’s general fund to be allocated however BLVD saw fit.

That policy is in the process of being changed in light of pushback from donors, two people familiar with the decision told The Times. But concerns about BLVD’s viability in the NIL marketplace persist among top-level donors and USC fans, many of who have been calling for a third-party collective to emerge for months.

For Rech, those concerns were the final impetus to move forward with Student Body Right. He doesn’t see why USC is so certain the two can’t co-exist.

“We’re not taking away from BLVD,” Rech said. “We’re filling a gap of money that they weren’t going to get anyway.”

Like USC’s administrators, Mike Jones doesn’t see the need for an outside collective and the potential liability that comes with it. As CEO of Stay Doubted, the outside media agency that partnered with the university to create BLVD, Jones told The Times that BLVD “has the ability to operate like any other collective in the country.”

Jones went on to refer to BLVD as a “collective-plus” — a shift in phrasing from its June rollout when USC sought to distance itself from any association with collectives.

“We see ourselves as the future model of what collectives will get to,” Jones continued.

Asked for proof of that progress, Jones said USC is “looking at eight-figures-plus annually” in private donations, before considering potential corporate sponsorships, content sales or merchandise. He also said that USC has already issued “seven-figures-plus” in deals to Trojans athletes since BLVD was rolled out.

New USC coach Lincoln Riley echoed that positive outlook at Pac-12 media day when asked about BLVD’s launch.

“I took this job feeling like we’d have advantages in the NIL space over any team in the country, and I know that now,” Riley told The Times. “I know [BLVD] is still a little bit in its infant stages, and I think this thing is going to turn out to be a huge part of USC athletics and USC football. It’s something that has my complete support, our staff’s complete support and I would encourage every single Trojan fan out there to get involved because it will make a difference.”

While supporting BLVD, Riley acknowledged there may be a time when collectives are standard for every major college football program.

“If this world becomes a collective world, our supporters here will support our guys as much as anyone in the country,” Riley said. “If it doesn’t become a collective world, who has a better setup than this? However these rules evolve, we’re positioned.

“The thing we don’t want to do for a future athlete, our current program, any of the staff is that we do something now that’s later deemed against the rules or they decide to enforce the rules, and now we’re in trouble. Now we’re in trouble. Now we’re on probation. Now people are getting fired or guys are losing eligibility. Nobody wants to go through that. We don’t have to. Here, you can have all the benefits, and you don’t have to take on that risk. Then whenever they actually define these rules, we’ll set our course and go.”

Rech is less confident in BLVD. In the rapidly changing world of NIL, he insists he wants to ensure that the living expenses of every football player at USC are taken care of. If that means working in concert with BLVD or continuing an already contentious relationship, so be it.

“We welcome anyone that can get USC back to winning national championships,” Rech said.