Not all money is good money

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Last week, Illinois State athletic director Kyle Brennan resigned, after WGLT reported on some very questionable spending practices in his administration.

Specifically, Brennan and another ISU athletic administrator reportedly spent over $23,000 on a one-day junket to Indianapolis to wine and dine a major athletic department donor. That trip included tickets to the Big Ten football championship game, as well as a trip to a strip club.

I bring this up not because I want to be a moral puritan, although I do think it is a bad idea for anybody to use official university foundation funds on adult entertainment. I also didn’t bring this up to make fun of anybody spending $23,000 on a 24-hour trip to Indiana, even though it does have a Vince-Young-Spending-Five-Grand-A-Week-At-Cheesecake-Factory vibe to it.

The most interesting thing about the story is not what the group did on their Brewster’s Millions romp through Marion County. It’s the who. Specifically, the biggest megabooster on the trip...a fella named Aaron Rossi.

Rossi was the former CEO of a company called Reditus Labs, a Pekin, Illinois-based firm that made a lot of money from COVID testing. Rossi allegedly promised to donate a whopping three million dollars to Illinois State athletics, specifically for an indoor practice facility. Based on data from the Knight-Newhouse database, Illinois State typically brings in around that much in athletic donations annually…period. So a three-million gift would be massive.

There’s just one problem. Illinois State might never get that money. That’s because Aaron Rossi’s former business partners say he stole $100 million from the company to fund a bunch of ridiculous luxury goods and services, including, and I promise I am not making this up, an albino turtle breeding business. Rossi is also facing a federal tax fraud indictment. Reditus Labs has since closed.

There’s a moral to this story. Or rather, another one, beyond ‘don’t get involved with anybody in the albino turtle business’

College sports doesn’t really work without the largess of random rich people. The costs keep climbing, and outside of programs like Ohio State and Texas, nobody can hope to earn enough money to pay for capital projects and new hires without fundraising. Even the programs that could ignore every single rich person who gives them money don’t.

But generally, that isn’t money for nothing. The kinds of people who are willing to pony up real money to athletic departments, be that the athletic department proper or some NIL collective, want something in return and I don’t just mean NPR-style tote bags.

Maybe it’s just plain ol’ attention and ego-stroking. Maybe it’s to buy positive PR. Maybe it’s influence. The more money you have to ask for, the more you’re tied to those donors, and the more practical power they have.

My concern would be that schools may face so much pressure to build X, recruit Y, cut ribbon Z that they fail to do their proper due diligence on who they are letting buy influence in their programs, or at least, in how those people actually got their money.

Broadly speaking, I suspect the kind of person that you feel you need to drop 20 grand on to entertain for a day in Indiana might not be the type of person that you really want to depend on.

This is why I understand why some schools may be hesitant to throw themselves in with mega boosters.

I know a lot of Syracuse fans are upset with their school right now, particularly around NIL. Recently, athletic department appears to be going through an awkward and public divorce with Adam Weitsman, perhaps the most public and prominent face of Syracuse NIL efforts. Weitsman paid for celebrities to sit courtside at Orange games, and promised to drop millions of dollars on NIL efforts for Orange athletes. Now, he’s telling reporters those high-profile efforts are done.

Trying to predict exactly what the NCAA will do is a fool’s game, but based on the letter of the NCAA’s policies, what Weitsman says in public, and New York state law, some experts worried that Weitsman’s actions increased risk for the university. And while he is unquestionably a successful businessman now and may very well be a changed person, he’s also a convicted felon. 

Could Syracuse take the money and roll the dice that everything this guy does is on the up and up? Sure. It might work out just fine, but given the reputational risks at play with letting a single donor with a penchant for publicity stunts wield major influence, well, some degree of “discomfort” is probably reasonable.

Every dollar that an athletic department needs from boosters is a tiny bit of influence and control that they’re delegating. That doesn’t have to be a bad thing, and there are scores of donors throughout the country who are happy to give money to support athletes without needing to feel like they’re a Shadow General Manager. But if your department is suddenly relying on one guy to bankroll a project or a roster…well, you become tied to that person. And if that booster wants to do everything in public, well, you better hope that person’s business continues to operate aboveboard.

Take it from me, a guy whose alma mater is the home of the Les Wexner Medical Center. Take a second to google Les Wexner. Is that a guy whose name you want on a bunch of buildings?

Sometimes the kind of person who is prepared to drop a seven-figure check is not the kind of person you want to take a seven-figure check from. Not all money is good money.

And shoot, once the IRS and the court system gets their crack at it, not all money may even be actual money.

Anybody who is about to sign some donor commitments from anybody working in the Web3 or AI space might want to do a bit more due diligence. Just in case.

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