Web service, UVM clash over cash for NCAA athletes

A new website with a mission to fund NCAA athletes was asked by UVM athletics to stop funding their athletes.

FanPay, which has raised about $1,300 since its launch, is designed so that fans can donate money to college athletes. The athletes will receive these funds when they graduate. The NCAA rules prohibit any form of compensation for student-athletes beyond aca- demic scholarships. No college athlete may compete if he or she has “taken pay, or the promise of pay, for competing in that sport.” This includes accepting pay for any activity that is related to that athlete’s skill.

The company FanPay was launched Dec. 25 2014 in response to this ruling. FanPay hasn’t removed any names from their site per UVM’s request. 

“We recognized that there was a kind of huge economic and social problem in sports today,” co-founder Tony Klausing said. “The software that we were building, we thought, was particularly suited to help college athletes because we could hold on to the money in an escrow account until they graduate, he said. “That way, we aren’t breaking any rules. It’s just a straight financial transfer, a person-to-person gift.”

Despite the high revenue that the NCAA will make during March Madness — last year it made over 1.15 billion in advertising alone, according to Forbes, — its players are 29 percent less likely to graduate than their non-athlete peers.

These statistics are what prompted the FanPay founders to take a “step in the right direction” for college athletes. “I think it’s really important for us to convey that our top priority is the well being of student athletes. Over time, incentive has been mixed up, and I don’t think that they’re looking out for the student-athletes,” Klausing said. “We are interested in changing college sports for the better.”

The FanPay website went live in August 2014, but the company had to delay their launch until December due to over 100 cease and desist letters from colleges. “The NCAA, they’re the ones with the rules, and they’re the ones with the power, at least for right now, so I could understand why some people and some universities were a little hesitant,” Klausing said.

Universities have taken issue with the website’s posting athletes’ names without permission, and the threat of “the promise of pay.” FanPay has refused to oblige these letters.

“We don’t take schools down just because their NCAA compliance officers or athletic directors request that,” Klausing. “We do take names off if the students themselves request it. I don’t know if the student athletes know what the schools are doing ‘on their behalf.’”

FanPay has received 252 cease and desist letters from colleges as of last week. Despite the backlash, FanPay plans to “keep on trucking,” Klausing said.  The founders of the group believe that they have a “practical plan that the schools will like,” in order to eliminate some of the controversy surrounding the group. “Our goal is to get all the facts on the table and let people decide for themselves whether they think FanPay makes sense,” Klausing said.

Tacy Lincoln, the compliance coordinator at UVM athletics, received a notification from America East that the company FanPay did not follow NCAA bylaws.  After checking the website and finding names of UVM student-athletes, she sent a cease and desist letter to the founders of FanPay.

“I understand that the premise of the fundraising is that the money would go to the students once they’ve exhausted their eligibility, it therefore would be permissible,” she said.  “But the fact of the matter is that it’s up and running while the student-athletes are still students.”

Lincoln said FanPay’s work is a violation of extra benefits, a “broad-ranged” bylaw.  The bylaw was set in place in order to prevent student-athletes from receiving benefits that they would only receive because of their status, Lincoln said. “A cup of coffee or a car — either way, it’s not permissible,” said Lincoln.

UVM athletics cannot promote organizations like FanPay because it jeopardizes student athletes’ affiliation with the NCAA, Lincoln said. “In a way, [FanPay] has put them at risk,” Lincoln said.  “If a student athlete is out there and someone is donating money to an account, they could get in trouble… if they are putting people’s names up without asking, how do you know to ask for it to be removed?”

While companies like FanPay claim to have the interests of the student athlete in mind, Lincoln made clear the rules of the NCAA cannot be avoided.


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