The NCAA is investigating the University of Tennessee football program for recruiting violations involving a group of outside donors, signaling an escalation of efforts to curb the growing influence of money flooding college sports, according to documents and people familiar with the case.
The investigation focuses on Tennessee’s high-profile donor collective, a group of wealthy alumni and boosters who support the team by funneling payments and other benefits to players. The investigation looks into, among other things, the group’s role in flying a high-profile recruit to campus on a private jet while the football team courted him, a person familiar with the case said.
Making the booster group pay for the travel of recruit Nico Iamaleava, now Tennessee’s starting quarterback, would be a violation of NCAA rules. The investigation comes after the NCAA penalized Tennessee for previous recruiting violations and signals the organization’s growing concern about the enormous sums that donor groups pump into the nominally amateur world of college sports.
The case could have profound implications for the direction of high-profile programs across the country, especially in soccer, where outside money raised and disbursed to players by collectives has reshaped the economics of the game. News of the investigation into the Tennessee athletic program was first reported by Sports Illustrated.
Tennessee officials are concerned the investigation could result in a devastating blow to their football program, according to a person briefed on the matter. The program is already on probation for previous recruiting violations, and school officials are concerned about the possibility of the NCAA taking drastic action, such as banning the team from postseason play and disqualifying players.
Faced with that possibility, the school has hired several law firms and is considering a variety of legal options to avoid any consequences.
At the center of the investigation are donor collectives, which are organized groups of alumni and other boosters who donate money to support teams. They have become a major force in college sports in recent years by exploiting a new system created to allow players to benefit from endorsements, known as name, image and likeness agreements, or NIL.
Collectives are increasingly organizing for athletes to receive sums that rival those earned by professionals. Mr. Iamaleava, the Tennessee quarterback, has an agreement with the school collective. That could be worth 8 million dollars.. After playing a limited role for most of last season, he became the team’s starter in the Citrus Bowl on New Year’s Day, leading Tennessee to a 35-0 victory over Iowa.
The precise violations the NCAA is pursuing in the Tennessee case and what sanctions it might seek remain unclear. As of Tuesday, Tennessee had not yet received formal notification of the allegations, which would lay out the conclusions of the investigation.
On Monday, after NCAA law enforcement agents met with Tennessee officials to discuss the investigation, university President Donde Plowman sent a letter to NCAA President Charlie Baker criticizing the allegations as “factually false and procedurally flawed.”
In the letter, obtained through a public records request, Ms. Plowman attacked the NCAA for “two and a half years of vague and contradictory memos” about how schools should address NIL issues and donor collectives. She said the NCAA had “created extraordinary chaos that student-athletes and institutions are struggling to overcome.”
At many Division I schools, collectives, while not technically affiliated with the universities they support, have become closely integrated into the recruitment of high school students. And in an era where athletes can easily transfer from one school to another in search of better opportunities, they have intertwined to offer lucrative deals to retain star players.
The New York Times has counted at least 140 groups that operate in schools with major football and basketball programs. Collectives now account for about 80 percent of all name, image and likeness payments to athletes, far more than all the trademarks the system was designed to protect.
The NCAA has set rules for these groups, including a ban on explicitly offering cash to attract recruits, saying any deal can be closed only after an athlete commits to a school.
But the NCAA has also been hurt by court losses, eroding its power to regulate collectives. Until recently, there was little evidence that he was monitoring them.
As a result, top-tier college sports programs, especially in football and basketball, have become a nearly limitless market, with coaches openly urging alumni and other sponsors to keep them competitive by donating money.
Some schools have become increasingly emboldened, recruiting their state lawmakers to fight the NCAA when it tries to set rules.
The latest example came in December, when attorneys general from seven states (including Tennessee) filed an antitrust lawsuit against the NCAA, calling any eligibility restrictions on transfers a restraint of trade. The Justice Department joined the lawsuit this month.
Amid the flurry of litigation, the NCAA’s Baker asked Congress for an antitrust waiver. He testified on Capitol Hill that these lawsuits, along with recently enacted state laws targeting NIL rules, made it nearly impossible for the organization to govern its members.
In examining Tennessee’s football program, the NCAA is investigating a team backed by one of the richest and most outspoken collectives in the country, a booster-funded group called the Volunteer Club. That group is closely tied to a marketing agency called Spyre Sports Group: the two entities share the same top management and management in Knoxville, Tennessee.
Last year, the website On3.com, which tracks groups, called the Volunteer Club “theleading group in the country” after the group said it had raised $13.5 million for Tennessee athletes.
The biggest prize was Mr. Iamaleava, a 6-foot-6 quarterback from Long Beach, Calif., who had been a top-ranked national recruit in his high school class.
“The nice word used is ‘collective’. But make no mistake: This is a war chest,” said Hunter Baddour, a top official with Spyre Sports and the Volunteer Club. said in a podcast in 2022. “We’re raising funds, creating an NIL war chest, where Tennessee will be as competitive as anyone else in the country.”
As their team grew, Tennessee improved on the field. After a long dismal stretch, the Volunteers posted a 9-4 record last year and the team finished the season ranked in the top 20.
Baddour also organized a lobby group for this new industry, the Collective Association, which has apparently asked the NCAA to share part of their considerable television income to groups.
Baddour and James Clawson, the other top Volunteer Club official, did not respond to requests for comment Tuesday.
NIL rules that came into effect in 2021 allowed players to be paid for their endorsements, but continued to prohibit students from being paid to play. But the groups that emerged in many schools effectively found a way to get around that limitation.
They signed athletes to big contracts for small amounts of work (sometimes as little as one social media post a month) to keep them happy and playing at the school of their choice. Some of the groups, although not the Volunteer Club, were created as nonprofit organizations that allowed donors to claim a tax deduction for their contributions.
Last July, the NCAA fined Tennessee $8 million and placed its athletic program on probation for five years, after finding “repeated and atrocious rapes” of the ban on coaches using cash to recruit players. Those violations took place before the NIL system. Instead, coaches paid football players the old-fashioned way, in cash.
Since the collectives emerged in late 2021, the NCAA has announced two cases in which it punished schools for promoters’ name, image and likeness payments. Last year, imposed light sanctions on the University of Miami after a booster posted photos of himself courting potential transfer students for the women’s basketball team.
This month, however, the NCAA imposed stricter sanctions, including a fine and two years of probation, against Florida State after a football coach took a prospective transfer student to a meeting with a collective representative. The agent then offered the player $15,000 a month to sign with Florida State, the NCAA said. The player rejected the offer and stayed at his original school.
The NCAA is also investigating the University of Florida over its recruitment of Jaden Rashada, a quarterback who signed a deal with the now-defunct Gator Collective worth $13.85 million over four years. Rashada, who had originally committed to the University of Miami, ultimately landed at Arizona State.