The $12 Million Quarterback

The 2024 Michigan Football season is likely to be remembered for two things: After a tepid start, the Wolverines upset the Ohio State Buckeyes. And Bryce Underwood upended Michigan athletics.

Though he’s just graduated from Belleville High School, Underwood is already a household name. On December 4, he officially signed a letter of intent to play football for the University of Michigan, reversing his earlier commitment to attend Louisiana State University.

The quarterback, considered the nation’s No. 1 college prospect, according to Sports Illustrated, was admitted early to Michigan and was eligible to start practicing on December 19. Even before he put on a uniform, Underwood was already receiving VIP treatment, starting with the incentive package that brought him to Ann Arbor.

Numerous reports said he will receive $12 million—$3 million for each year he stays at Michigan.

While alumni for years have played a role in convincing prospects to attend their alma maters, until recently financial incentives were forbidden. In the early 2000s, after a federal investigation confirmed that a Detroit numbers runner had loaned hundreds of thousands of dollars to prospective and active Michigan basketball players, the U-M agreed to vacate the records of more than 100 games dating back to the Fab Five era.

Things began to change in 2019, when a federal district court ruled that college basketball was subject to federal antitrust laws and overturned National Collegiate Athletics Association rules forbidding direct compensation to athletes. California lawmakers legalized the practice in 2019, and the U.S. Supreme Court upheld the lower court ruling in 2021.

That allowed states to authorize a program called Name, Likeness, and Image, or NIL (each letter is pronounced). But while the Michigan legislature did so in 2022, the U-M was relatively late to the NIL game.

Current NIL rules allow college athletes to make money from corporate sponsors, sell merchandise and memorabilia, and accept payments from booster-led cooperatives, which can hire players to appear in advertisements, take part in charity events, and attend receptions with their members. At Michigan, the M Den and other stores offered memorabilia from players such as quarterback J.J. McCarthy; some players, like cornerback Blake Corum, made personal appearances. Corum memorably donated his NIL money to pay for Thanksgiving food drives in Ypsilanti, which he still funds as a player for the Los Angeles Chargers. 

Related: Including the Wolverines

Yet prior to Underwood’s announcement, no Michigan athletes were listed among the top ten athletes ranked by On3.com, a website that estimates NIL value, in part by measuring their appeal on social media. 

The epic deal also added a patina of celebrity. It was crafted by alum Dave Portnoy, the founder of sports and pop-culture media site Barstool Sports, and billionaire Larry Ellison, the cofounder of technology giant Oracle.

Ellison had not previously been connected to Michigan, but in December, the Wall Street Journal reported that his fifth wife, Jolin, is a Michigan alum (international studies, 2012).

Tom Brady, the former U-M quarterback and NFL superstar, also played a key role in wooing the Belleville native. Jay Underwood, Bryce’s father, told the Journal they talked three or four times a week.

Underwood’s signing day at Belleville High on December 4 was crowded with sports reporters and camera crews from around the country. A photographer and videographer livestreamed the event on Underwood’s Instagram account. (They later told Observer photographer Adrian Wylie that they’ve been following him for years.)

Joining Underwood that day was teammate Elijah Dotson, a safety who is the No. 2 ranked high school player in the state. Like Underwood, Dotson also flipped to Michigan after committing to Pittsburgh. The size of his NIL deal, if any, wasn’t reported.

They will not be the last players to be lured to Michigan—or other schools offering equally mind-boggling sums. “It’s the new Wild West, man,” says author John U. Bacon, a longtime observer of Michigan athletics. “You compete, or you lose.”

In early December, Underwood cracked the On3 list at No. 9. His 249,000 social media followers were still a fraction of the millions attracted by others. including Colorado quarterback Shedeur Sanders, who has a deal with Nike, and LSU gymnast Livvy Dunne, known as the most-followed NCAA athlete on social media with nearly 14 million fans. Nonetheless, Underwood has arguably the highest profile of any college football freshman.

Even before signing his letter of intent to be a Wolverine, Underwood appeared on the sidelines at Michigan’s last home football game. He took a courtside seat at a Detroit Pistons game, inked an endorsement deal with trendy clothing brand Hollister, and rolled out a line of official merchandise on his website. Fans can buy a “Big House Bryce” T-shirt for $50 or a pack of autographed trading cards for $1,900.

On the website, Underwood writes that he’s “so pumped to take the next step in my football journey at the University of Michigan!” On X, he describes himself as “University of Michigan Quarterback.” And in an Instagram post, he writes that he will “always remember the journey that got me here. I appreciate everybody’s support, let’s go all the way!”

The upheaval in college athletics hasn’t stopped. In October, a federal district court judge tentatively approved a $2.8 billion settlement with five major NCAA conferences, including the Big Ten, that allows schools to directly pay students. It would limit roster spots but allow schools to give scholarships for every player on their NCAA-sanctioned team. The settlement also calls for athletes since 2016 to be retroactively paid for their missed NIL opportunities. The deal would take effect this summer, although California and two other states are objecting.

Warde Manuel, Michigan’s athletic director, told Wolverine fans this fall that the school needed to step up. In a letter on October 9, Manuel said Michigan anticipated paying $22 million to athletes that compete on twenty-nine NCAA teams beginning with the 2025–26 academic year. And scholarship costs will rise by $29 million to cover all 780 eligible athletes.

Given those two expenses, Michigan will need to generate more than $50 million, either through new revenue or cost cuts elsewhere, to “maximize” what NIL permits. 

“This is a challenging time in higher education and college athletics, but it is also an opportunity to show the world who we are at Michigan,” wrote Manuel, whose AD contract was extended in December to 2030. “To help secure the long-term success of our athletics programs, we need the support of everyone associated with Michigan Athletics.”

The linchpin of that effort is the Champions Circle, the official collective providing funds for Michigan athletes.

Cofounded by Jared Wangler, who played fullback at Michigan, and Phil Hollyer, an engineering grad and Chicago tech executive, the group calls itself “a community of fans, alumni, and supporters whose goal is empowering University of Michigan student-athletes to be the leaders and best, through name, image, and likeness.” 

This fall, Champions Circle ran ads during Michigan football broadcasts encouraging the public to become members, at prices ranging from $10 monthly, which includes a decal, to $500 a month, which rewards donors with a signed football. Wangler’s Valiant Management Group has been hired to help with fundraising and marketing activities.

On its website, Valiant, whose name was inspired by Michigan’s fight song, says it has served more than fifteen teams and 400 athletes, including $5.5 million in NIL deals for Michigan players since 2021. They range from social media endorsements, at $10,000 each, to appearing in television commercials and print and digital ads, which can cost the advertisers hundreds of thousands.

In a testimonial on its website, former Michigan head coach Jim Harbaugh says the company was “a trusted agent” and encourages “our Michigan family to support them in their NIL efforts.”

For coaches, NIL is an entirely new complication, Bacon says. Previously, “A football coach only had to coach and recruit. Now they have to take into account financial systems.”

Bacon wonders what happens if Underwood doesn’t pan out in his first season, and head coach Sherrone Moore has to bench him for a more experienced player. “Is he going to hear from Larry Ellison?”

NIL, Bacon says, is turning college football into the equivalent of a minor league for the National Football League, which does not have one, unlike Major League Baseball and the National Hockey League, which do. Rather than amateurs hoping to turn pro, today’s college athletes will already be professionals when and if they choose to enter the draft.

As professionals, they’ll continue to look for the best financial deals while they are in school. And they may not stay at the university where they begin their careers.

Transfers have always taken place, but on an informal level. Sometimes students left for academic reasons or to play closer to home. But whatever the motive, those who did were penalized: the NCAA required them to sit out their first year at the new school.

The system was formalized in 2018, when the league created the transfer portal: an official list of players who have signaled their willingness to leave their schools. Starting in 2021, players were allowed to transfer once without penalty. Then, last May, the NCAA reached a consent decree with the Department of Justice to allow unlimited transfers. 

During the 2023–24 season, more than 2,000 football players said they were up for new opportunities, according to On3, which keeps a running tally. As the Observer went to press, twenty-six current and former Michigan football players were in the portal. (Former means they were at Michigan but were not active players this fall.) At that point, Michigan had signed five new players from other schools, according to On3.

Like free agency in baseball, the portal brings up the prospect of a bidding war that is likely to benefit big and wealthy schools and penalize those that can’t match their fundraising. “What is going to happen to poor Eastern Michigan?” Bacon wonders.

One possibility is that schools with less money will have to discontinue some NCAA-level teams. That is already happening in men’s gymnastics, where Michigan’s is one of just fifteen NCAA teams left in three conferences. The biggest donation to the U-M men’s program to date was $1 million, says coach Yuan Xiao, even though the current group boasts two members of the U.S. Olympic Team.

Related: From China to Ann Arbor to Paris

Manuel said in his letter that the school planned to continue supporting all of its twenty-nine teams. But changes in what fans see when they arrive for athletic events are undoubtedly coming.

Michigan has never allowed advertising at its major athletic venues, including the Big House, Crisler Arena, and Yost. Nor has it displayed the logos of corporate sponsors, although numerous buildings, classrooms and venues across campus bear donors’ names. Last fall, Manuel said he wanted to get feedback on that step before it’s implemented.

Given that fans are constantly surrounded by advertising and branding in the sports world, the shift might barely be noticed.

But researchers are noticing the impact that NIL may have on college athletes. In a 2023 report, William Hollabaugh, Aaron Jeckell, and Alex Diamond at the National Institutes of Health said NIL posed “novel responsibilities and stressors to athletes.”

The trio called on academic programs to provide resources to athletes and their families so that students could navigate the confusing and potentially predatory financial landscape.

“We must provide resources to youth athletes to minimize the risks associated with NIL involvement and related activities,” they wrote, “and to ensure that athletes with NIL contracts are able to balance their academic and athletic responsibilities.”

Amid the hoopla, Bryce Underwood has displayed an extraordinary amount of zen, at least in public. Asked at his signing how it felt to have Tom Brady and others stepping up to bring him to Michigan, he replied, “It was a great opportunity, but I’m just more focused on getting into the school and starting my classes.”

Michigan football fans are looking farther ahead: Underwood’s first test as a Wolverine could come as early as August 30, in the Big House, against New Mexico.

—

Calls & letters

The Rams, not the Chargers