College sports enthusiasts who wish to influence an athlete’s choice of school can now do so through financial contributions, thanks to the launch of a new crowdfunding platform known as Fanstake.
Fanstake aims to create a more equitable marketplace for athletes, according to CEO Greg Glass. “We’re introducing a free market approach,” he stated. “The missing element in the current NIL landscape is the democratization of it, empowering athletes to see their true market worth as determined by demand, while allowing everyday fans to engage without any financial risks.”
This innovative platform is a twist on the traditional model where fans contribute to booster-supported collectives. These collectives pool resources to facilitate name, image, and likeness agreements for athletes, which have gained momentum since 2021. With NIL funding increasingly becoming a crucial element for recruiting and retaining talent in college sports, it is expected to complement direct payments from educational institutions by next year.
Fanstake enables individual fans or fan groups to influence recruiting and retention strategies by financially supporting specific athletes. Fans interested in “staking an athlete,” as the platform describes it, can decide how much money they wish to pledge towards a recruit, transfer, or current player on the team.
For instance, a supporter of Nebraska may choose to contribute amounts such as $5 or $10 to back an athlete. Should that athlete select Nebraska and wish to access the funds pledged by fans, they would need to enter into an NIL agreement with Fanstake to comply with NCAA regulations. Glass noted that the nature of the NIL arrangements varies with the funding amount, but all athletes must endorse Fanstake in some way.
If the recruited athlete chooses to play for another school, like Notre Dame instead of Nebraska, the pledging fans from Nebraska would receive a refund to their accounts. In contrast, fans supporting Notre Dame would finance the athlete’s endorsement arrangement. According to Glass, no NIL agreements are finalized until an athlete is officially on a school’s roster.
Fanstake ensures that athletes retain a minimum of 90% of the pledges made, with an additional 3% shared among teammates who also choose to promote Fanstake. The remainder is allocated to the platform itself.
Since its launch in November, Fanstake has primarily leveraged social media for promotional efforts. Glass mentioned that more than 5,000 fans have committed over $20,000 through the platform so far.
Currently, the platform features athletes from Division I football and men’s and women’s basketball, as well as the top high school talents in these sports, with plans to expand to additional sports and athletes from lower divisions in the future.
Recently, Fanstake announced its first brand ambassador: five-star quarterback recruit Julian Lewis from Colorado, who will receive an equity stake in the company as part of his NIL agreement.
A significant federal court ruling in Tennessee last February, which lifted restrictions imposed by the NCAA on NIL compensation for recruits, paved the way for Fanstake’s competitive bidding process for athletes. The court determined that such restrictions limited athletes’ negotiation power and obstructed their ability to comprehend their true NIL potential.
“We have reached a pivotal moment, particularly following the federal injunction, where athletes need to negotiate terms before choosing their schools,” explained Glass. “They must understand the financial landscape, comparing opportunities at places like Nebraska and Notre Dame. Fanstake facilitates this process by allowing fans to guide athletes regarding the present demand and potential financial rewards.”
