Late yesterday U.S. district Judge Claudia Wilken gave final approval of the House lawsuit settlement. This settlement not only resolves the complaints brought against the NCAA and its members by a class of student-athletes, but also sets out a structure that third-party collectives, such as California Legends, will have to follow on a go-forward basis. Under its terms, the final settlement and its limitations will take effect on June 30, 2025.
Having reviewed the settlement and its limitations, the Board and I have decided that the California Legends Collective will make its final payments to Cal's student-athletes on June 30th and we will suspend our operations at that time.
The reasons we have reached this decision are multifold. Chief among them is that under the House settlement every payment we make to every student-athlete over $600 would need to be presented to an NIL clearinghouse, who would then judge whether or not it was reflective of that student-athlete's true market value. We simply don't have the resources to make those arguments to the NCAA for each of Cal's 900 student-athletes. But as importantly, with the House settlement Cal donors will be able to receive a tax deduction for all of the money contributed to the school for NIL purposes, which is a welcome development but which also likely will make it impossible for us to argue that donors should give us non-tax-deductible contributions instead.
Based on my experience dealing with U.S. antitrust laws, I firmly believe that the $600 clearinghouse model and limitations are blatantly illegal and will eventually be challenged in court and thrown out, unless of course Congress grants the NCAA an antitrust exemption (which is still a very real possibility). But until it is thrown out on appeal or Congress acts, California Legends would have to operate in violation of the NCAA rules in order to continue to operate as we have done. And we would also be directly competing with Cal for donors and donations. As neither of those prospects is appealing, the board and I have determined our time is best spent going forward helping Cal itself raise funds to distribute as revenue share for our student-athletes. The recent campaign where my wife and I joined forces with Justin Wilcox, Ron Rivera and a few others to create a challenge grant that raised over $2.5m for Cal athletics in just a bit over a week was an early example of what we hope to accomplish. Should legal changes allow a collective like ours to serve Cal again in the future, we would also be more than willing to lend our knowledge and expertise to any alums who would like to take this on. I can promise that you won't be bored.
While it is a bittersweet moment for us all, we are pleased with what we accomplished and how conclusively we demonstrated that our community values competitive excellence and will invest to achieve it. With a lot of hard work (and your money) we have been able to begin shifting the trajectory of Cal's revenue sports. We put 10's of millions of dollars to work and brought in back-to-back top 20 portal classes for both football and MBB. We helped generate a level of enthusiasm for Cal athletics not seen in several decades and last year helped bring football college GameDay to Cal for the first time in its 37-year history.
Our robust NIL program was a key component in bringing Mark Madsen to Cal and convincing him this was a place where he could win championships and build a career. On football, while the final win/loss total for the prior season was disappointing (particularly for the coaches), we were within 9 points of a 10-win season and the team was far more competitive than it had been in decades, with the majority of our losses coming on the last play of the games. That doesn't happen without talent, and we helped provide sufficient top-tier talent to our coaches for the first time in quite some time. Of course, these recruiting battles can only be won with the tremendous efforts of Marshall Cherrington and Benji Palu on the recruiting staff don't know where we would be without them. On WBB, which had a very good regular season, we played a role, but honestly I think the main lesson is what more could be done to create a top-tier WBB team at Cal if just a few more donors would step up. Coach Smith has made great strides, but the real story is the opportunity. There's no reason Cal can't be an absolute force in women's basketball.
Through it all, we strove to maintain a reputation as not only a well-run and efficient organization, but also as a highly ethical one. On the efficiency, California Legends operated as a strictly volunteer organization with no overhead. All operating costs were paid by my fellow directors and myself, which allowed 100 cents of every dollar donated from fans to go to our student-athletes. I believe we were unique across all of college athletics in that regard. On the ethics, throughout our tenure every student who was promised a payment and remained at Cal received every penny they were promised. I was told by numerous agents that we were also unique in that regard and that our reputation in the industry was exemplary (meaning most of our deals could be done just with a handshake people knew our word was good enough). We strove to represent all of you effectively but also to allow you to take pride in our program. Hopefully we accomplished that goal.
A few words of thanks. First, I would like to thank Marshawn Lynch and BeastMode Marketing (with a special heartfelt thanks to Bryon Sheng and Andrea Ung who have been instrumental to our success). BeastMode has been an outstanding partner, creating the vast majority of our content and activations for our student-athletes. Marshawn lent us his fame and his superlative insights in brand management and asked nothing in return. He and his team did this to help Cal and our entire community owes them a tremendous debt of thanks. I also would like to thank our amazing advisory board members (DeSean Jackson, Layshia Clarendon, Valerie Arioto, Ryan Murphy and of course Marshawn himself) for their input and advice over these many years. We are blessed to have had all of them as partners.
I would also like to offer thanks to my fellow directors, John Stock, Greg Richardson and, until she recently stepped down to avoid conflicts given Ron Rivera's new role with the football team, Stephanie Rivera. They have been the rock on which all of our efforts and accomplishments were built. No one could have possibly given more or be more deserving of praise and appreciation for this (largely thankless) task. Their sage advice and help with fundraising, to say nothing of the considerable amount of their own money they have contributed, are beyond laudable and exemplary. A special shout out to my friend Greg Richardson, who not only willingly joined the board, but also owns and operates Bear Insider and maintains a full-time job. Greg also was the point person in dealing with a few player agents over the years that I had neither the patience nor frankly the temperament to handle. Truly a giant in the pantheon of Cal superfans.
Most importantly, I would like to thank our donors. Nothing we accomplished would have been possible without your support. While some established donors embraced this opportunity, we also found an entirely new class of donors for Cal athletics. People who were frustrated with the way things had been run and Cal's self-imposed limitations. They wanted to make a difference and change the trajectory of Cal athletics and saw our Collective as a way to do so. Interestingly, of the people who gave over $1m to the Collective, none of them had given anything remotely equivalent to Cal athletics before NIL. They were engaged by the mission and the opportunity we provided and they embraced it. Several became Builders of Berkeley through their donations to us. Finding and activating this vital constituency may be our proudest legacy.
And of course, to all the thousands of fans who contributed to us, thank you. The breadth of support we received was beyond heartening. You showed that you cared and you put your money to work. Regardless of the amount, ALL of your donations were meaningful and we could not have been more grateful for everything you did to help Cal.
I hope that those of you who have seen what can be accomplished and are encouraged by the progress we have made will continue to support Cal Athletics. I know I will. Cal needs your help more than ever and with your support our best days are truly ahead of us. Here is a link to the Cal Athletics donations page if you would like to help. https://give.berkeley.edu/funddrive/50?ac=92213&freq=MON. If you might like to write a bigger check, I know that Beth Voetsch and Adam Brooks from Athletic Development would love to hear from you (special shoutout to Adam who was my primary fundraising partner at Cal over many years, endlessly helping strategize how best to engage our donors. Thank you Adam).
Go Bears!
Having reviewed the settlement and its limitations, the Board and I have decided that the California Legends Collective will make its final payments to Cal's student-athletes on June 30th and we will suspend our operations at that time.
The reasons we have reached this decision are multifold. Chief among them is that under the House settlement every payment we make to every student-athlete over $600 would need to be presented to an NIL clearinghouse, who would then judge whether or not it was reflective of that student-athlete's true market value. We simply don't have the resources to make those arguments to the NCAA for each of Cal's 900 student-athletes. But as importantly, with the House settlement Cal donors will be able to receive a tax deduction for all of the money contributed to the school for NIL purposes, which is a welcome development but which also likely will make it impossible for us to argue that donors should give us non-tax-deductible contributions instead.
Based on my experience dealing with U.S. antitrust laws, I firmly believe that the $600 clearinghouse model and limitations are blatantly illegal and will eventually be challenged in court and thrown out, unless of course Congress grants the NCAA an antitrust exemption (which is still a very real possibility). But until it is thrown out on appeal or Congress acts, California Legends would have to operate in violation of the NCAA rules in order to continue to operate as we have done. And we would also be directly competing with Cal for donors and donations. As neither of those prospects is appealing, the board and I have determined our time is best spent going forward helping Cal itself raise funds to distribute as revenue share for our student-athletes. The recent campaign where my wife and I joined forces with Justin Wilcox, Ron Rivera and a few others to create a challenge grant that raised over $2.5m for Cal athletics in just a bit over a week was an early example of what we hope to accomplish. Should legal changes allow a collective like ours to serve Cal again in the future, we would also be more than willing to lend our knowledge and expertise to any alums who would like to take this on. I can promise that you won't be bored.
While it is a bittersweet moment for us all, we are pleased with what we accomplished and how conclusively we demonstrated that our community values competitive excellence and will invest to achieve it. With a lot of hard work (and your money) we have been able to begin shifting the trajectory of Cal's revenue sports. We put 10's of millions of dollars to work and brought in back-to-back top 20 portal classes for both football and MBB. We helped generate a level of enthusiasm for Cal athletics not seen in several decades and last year helped bring football college GameDay to Cal for the first time in its 37-year history.
Our robust NIL program was a key component in bringing Mark Madsen to Cal and convincing him this was a place where he could win championships and build a career. On football, while the final win/loss total for the prior season was disappointing (particularly for the coaches), we were within 9 points of a 10-win season and the team was far more competitive than it had been in decades, with the majority of our losses coming on the last play of the games. That doesn't happen without talent, and we helped provide sufficient top-tier talent to our coaches for the first time in quite some time. Of course, these recruiting battles can only be won with the tremendous efforts of Marshall Cherrington and Benji Palu on the recruiting staff don't know where we would be without them. On WBB, which had a very good regular season, we played a role, but honestly I think the main lesson is what more could be done to create a top-tier WBB team at Cal if just a few more donors would step up. Coach Smith has made great strides, but the real story is the opportunity. There's no reason Cal can't be an absolute force in women's basketball.
Through it all, we strove to maintain a reputation as not only a well-run and efficient organization, but also as a highly ethical one. On the efficiency, California Legends operated as a strictly volunteer organization with no overhead. All operating costs were paid by my fellow directors and myself, which allowed 100 cents of every dollar donated from fans to go to our student-athletes. I believe we were unique across all of college athletics in that regard. On the ethics, throughout our tenure every student who was promised a payment and remained at Cal received every penny they were promised. I was told by numerous agents that we were also unique in that regard and that our reputation in the industry was exemplary (meaning most of our deals could be done just with a handshake people knew our word was good enough). We strove to represent all of you effectively but also to allow you to take pride in our program. Hopefully we accomplished that goal.
A few words of thanks. First, I would like to thank Marshawn Lynch and BeastMode Marketing (with a special heartfelt thanks to Bryon Sheng and Andrea Ung who have been instrumental to our success). BeastMode has been an outstanding partner, creating the vast majority of our content and activations for our student-athletes. Marshawn lent us his fame and his superlative insights in brand management and asked nothing in return. He and his team did this to help Cal and our entire community owes them a tremendous debt of thanks. I also would like to thank our amazing advisory board members (DeSean Jackson, Layshia Clarendon, Valerie Arioto, Ryan Murphy and of course Marshawn himself) for their input and advice over these many years. We are blessed to have had all of them as partners.
I would also like to offer thanks to my fellow directors, John Stock, Greg Richardson and, until she recently stepped down to avoid conflicts given Ron Rivera's new role with the football team, Stephanie Rivera. They have been the rock on which all of our efforts and accomplishments were built. No one could have possibly given more or be more deserving of praise and appreciation for this (largely thankless) task. Their sage advice and help with fundraising, to say nothing of the considerable amount of their own money they have contributed, are beyond laudable and exemplary. A special shout out to my friend Greg Richardson, who not only willingly joined the board, but also owns and operates Bear Insider and maintains a full-time job. Greg also was the point person in dealing with a few player agents over the years that I had neither the patience nor frankly the temperament to handle. Truly a giant in the pantheon of Cal superfans.
Most importantly, I would like to thank our donors. Nothing we accomplished would have been possible without your support. While some established donors embraced this opportunity, we also found an entirely new class of donors for Cal athletics. People who were frustrated with the way things had been run and Cal's self-imposed limitations. They wanted to make a difference and change the trajectory of Cal athletics and saw our Collective as a way to do so. Interestingly, of the people who gave over $1m to the Collective, none of them had given anything remotely equivalent to Cal athletics before NIL. They were engaged by the mission and the opportunity we provided and they embraced it. Several became Builders of Berkeley through their donations to us. Finding and activating this vital constituency may be our proudest legacy.
And of course, to all the thousands of fans who contributed to us, thank you. The breadth of support we received was beyond heartening. You showed that you cared and you put your money to work. Regardless of the amount, ALL of your donations were meaningful and we could not have been more grateful for everything you did to help Cal.
I hope that those of you who have seen what can be accomplished and are encouraged by the progress we have made will continue to support Cal Athletics. I know I will. Cal needs your help more than ever and with your support our best days are truly ahead of us. Here is a link to the Cal Athletics donations page if you would like to help. https://give.berkeley.edu/funddrive/50?ac=92213&freq=MON. If you might like to write a bigger check, I know that Beth Voetsch and Adam Brooks from Athletic Development would love to hear from you (special shoutout to Adam who was my primary fundraising partner at Cal over many years, endlessly helping strategize how best to engage our donors. Thank you Adam).
Go Bears!
