College Players Not Getting Rich From Endorsements

NIL is not nothing.

It’s short for “name, image & likeness,” what the NCAA is allowing student athletes to sell to support their college sports careers.

Several states have now passed laws regulating this practice. Maryland’s law won’t take effect until July 2023.

But in the meantime, the University of Maryland has partnered with Brandr Group, so its athletes can legally use the school’s trademarks and logos on their own products.

With the Big 10 schools being the leading conference for player compensation, UMD has instituted a number of guidelines while waiting for the law to kick in, including: deals must me disclosed within 14 days, students can sign with competitors of the school’s advertisers (so a player can endorse Adidas over the University’s UnderArmor sponsor) but banned products (tobacco, adult entertainment or #cannabis) are outlawed.

Just so you don’t think there are a lot of college millionaires, the average Division I player is making $1,256 per the last survey.

SEC Going After Cryptocurrency Players

So, if your Bitcoin investment (which has lost about 20% of its value since January 1) is leaving you a little depressed, you may be more depressed if you’re in the cryptocurrency “industry.”

A recent report from the SEC “SEC Cryptocurrency Enforcement” notes that the country’s securities regulator is not holding back on going after crypto promoters.

Down from 35 actions in 2020, the SEC filed 21 actions in 2021, consisting of going after delinquent filings, litigation and administrative proceedings.

Of the enforcement actions, 65% alleged fraud, 80% alleged an unregistered securities offering violation and 55% alleged both.

And if you think they’re just playing, as of year-end 2021, the SEC had imposed approximately $2.35 billion in total monetary penalties against digital asset market participants. Ouch.

Click to access SEC-Cryptocurrency-Enforcement-2021-Update.pdf

SEC Says Take the Hit

If you run a public company that has invested in Bitcoin or other cryptocurrency you have to take the hit.

The SEC has told companies like Microstrategy and Tesla that they cannot use non-GAAP financial measures to strip out losses from cryptocurrency downturns when filing their periodic reports on Form 10-Q and 10-K.

Image Credit: REUTERS/Dado Ruvic/Illustration

The staff of CorpFin stated in its comment letter “…we object to your adjustment for bitcoin impairment charges in your non-GAAP measures. Please revise to remove this adjustment in future filings.”

Language like this is a policy statement, so take it as gospel.

See the SEC Comment Letter:

Click to access filename1.pdf

Anonymous No More

One of the benefits of being a member of a limited liability company or a stockholder of a private company was that the public and the government didn’t know about it.

Unless you are an organizer of an LLC or a director or officer of a corporation where your name is on a public filing with the state the company’s organization, you are anonymous.

That’s going to change with the recent new regulation from the Financial Crimes Enforcement Network, a Treasury Department agency that enforces the Corporate Transparency Act which is part of the Anti-Money Laundering Act of 2020.

When the regulation goes into effect about 28 million entities will be required to “confidentially” report to FINCEN each beneficial owner’s:

full legal name,

date of birth,

current resident or business street address, and

driver’s license or passport number and a scanned copy of that document.

Gamers Not Happy About NFTs

Non-Fungible Tokens (NFTs) are quickly becoming the new way to monetize almost anything.

Since the NFT is “virtual” not real what you see is not what you get. What you get is a digital representation of the physical thing, so it’s like buying a picture of a car, but not getting the car.

There is a somewhat surprising backlash growing over the move by some fan-based companies over their attempt to sell NFTs to their customers.

Recently, the rabid Stan Lee fans have revolted over the tweet that his first Indian hero, Chakra The Invincible, would be selling an NFT (digital art) collection.

Per CBR-dot-com, his followers found “the tweet to be a degrading and irresponsible message that disrespects the legacy of Lee and his influence on popular art.”

Ubisoft issued NFTs in its Ghost Recon Breakpoint game to similar upset (their NFTs are getting low ball bids in the market) and GSC GameWorld backed off its plan to sell NFTs of players faces pasted on their avatar characters.

Many reason that the backlash is due to the anti-ecological effects of the need for extreme power for crypto mining, but the real reason is that fans feel that the gaming companies are picking their pockets.

The Eyes Have It?

I have a bridge to sell ya.

But if you’re not interested in a bridge in Brooklyn, how about a Non-Fungible Token of Melania Trump’s eyes?

It comes with a one sentence audio inspirational message from the seller.

You can buy this watercolor digital thing on her website for one SOL, a cryptocurrency that runs on the Solana blockchain valued by her website today at $182.35.

A “portion of the proceeds from the sale of the artwork will be donated to support children in the foster care community.” That portion is not disclosed.

Or, you can gaze into her “cobalt-blue” orbs below for free.

(Credit: Marc Antonine Coulon)

Like other NFTs that have copies floating around in cyberspace, it’s unclear the value of the NFT other than for sentimental or historical value (the first former First Lady’s NFT?).

But these days there seems to be a buyer for just about anything, so it and the other NFTs coming down the pike, will probably sell (although this one has been for sale for 4 days with no takers).

NFTs To Fund Films. Really?

Is it really a “new way of financing” independent films?

Or is it just another gimmick to find funding in the ever harder world of movie making?

Non-Fungible Tokens are now being touted as the way indie producers can raise funding for projects.

THR reported about “financing the movie through a combination of NFTs and a first-of-its-kind public offering to sell shares in the film.” It’s unclear what makes the IPO a one-of-a-kind when filmmakers have been crowdfunding films for years.

And NFTs are the opposite of what most producers want: an NFT has a single owner/viewer, and most filmmakers seek a wide audience.

If NFT’s are simply “chotskies” (ie, little mementos) of the movie like a poster or a gif, then what’s so new about that?

However, if you can find a wealthy someone who, like the PharmBro who spent $2 Million for a music CD, to buy an NFT of the film for its production cost plus a profit, then you’re on the right track. That woman is the “executive producer.”

https://www.hollywoodreporter.com/business/business-news/nft-independent-film-afm-2021-1235038434/

Software Glitch Starts CEO Pissing Contest

A software “glitch” resulted in traders not being able to withdraw their Dogecoins from Binance, a cryptocurrency exchange.

That started a pissing contest between Elon Musk and Binance CEO Changpeng “CZ” Zhao on Twitter. Musk tweeted that something “sounded shady” and Zhao responded noting software problems with Teslas.

Dogecoins were created in 2013 as a meme joke but rocketed to a 6,000% increase to about $0.64 in May 2021 and now trades at $0.21.

However, the problem prevented withdrawals for more than 2 weeks.

If that happened to a bank in the U.S., there would have been panics and long lines to withdraw deposits, which could have resulted in another 1930’s like depression.

Perhaps a cautionary tale…

https://www.bloomberg.com/news/articles/2021-11-29/binance-reopens-dogecoin-withdrawals-after-musk-spat-with-ceo

Power in Negotiation

Negotiation is a study in power and economics.

Power in negotiation (IMHO) is the ability to walk away from any potential transaction, no matter how far along you are in the process.

The power element is the desire. It’s not the need.

In a commercial setting, especially in the movie business, no one “needs” to get a picture made. Needs are what Maslow describes.

The person who has the most desire for the deal to happen is the one with the least amount of power. That’s why many people cut bad deals.

The other aspect is, of course, simple supply and demand. There are millions of film scripts floating around in the ether. (Most aren’t so good, but many bad scripts get made).

So, when a studio picks one over the other, the negotiating power shifts to the studio.

With the supply outweighing the demand, when a producer picks a script, (unless you’re Aaron Sorkin), your desire bell starts ringing like mad. And the negotiation goes something like “here’s the deal-take it or leave it.” Would you walk away?

Cryptocurrencies Under the Microscope

In 1908, there were 253 automobile manufacturers in the world. Today, about 20.

There are more than 7,000 cryptocurrencies in existence as of November 2021.

If you don’t see a comparison, don’t worry, the new Chairman of the Securities and Exchange Commission does.

Mr. Gensler, a former professor of blockchain technology at MIT, has likened the cryptocurrency wave to “wildcat” banking in the years before the Federal government created the Office of the Comptroller of the Currency.

Back then, banks made their own paper money.

His view is that it just won’t work.

He has likened stablecoins (digital assets tied to the US dollar) to casino gambling and has urged cryptocurrency exchanges to register under the Securities Exchange Act of 1934.

The urging has come with threats of prosecution.

And the large companies like Binance are taking notice, putting a full page ad in today’s Washington Post, noting that regulation is coming.