Athletes.org, the newly formed nonprofit college players group launched by INFLCR founder Jim Cavale, is financially linked with a for-profit entity that Cavale simultaneously launched this year.
The relationship between the two entities, which has not been previously made public, exemplifies the interwovenness between entrepreneurship and advocacy in the present-day shifting sands of college athlete commercialism.
According to the application for tax-exempt status from Athletes.org (AO), filed with the IRS in June, AO had a “written sponsorship agreement” in place with Cavale’s Athletes Innovations Inc., the for-profit company. Athletes Innovations paid the nonprofit an unspecified fee that “allows it to support its mission.” Per the application, Athletes.org claimed the sponsorship agreement was negotiated and approved by AO’s directors, who “do not have an interest in Athletes Innovations,” which ensured that it was “negotiated at arm’s length.”
Cavale, in a phone interview with Sportico this week, said Athletes Innovations was established to serve as the entity through which strategic partners could provide the initial funding for AO. However, at least one of the organization’s partners, the NIL-focused media outlet On3, has engaged directly with the nonprofit entity.
When asked what determined whether AO sponsors would go through Athletes Innovations, and why, Cavale said that is “still stuff we are trying to figure out.” Cavale was similarly vague when asked whether Athletes Innovations would exist solely as AO’s funding vehicle, or if it had its own corporate ambitions, as well. He did not disclose how much the for-profit had paid the non-profit on account of the sponsorship agreement.
Athletes.org, which is seeking status as a 501(c)(3) public charity, has yet to receive a determination from the IRS. Upon request, AO provided Sportico a copy of its conflict-of-interest policy, which requires directors, officers and members to disclose potential conflicts and sets forth a voting process by which the board would determine whether “a transaction or arrangement is in the Foundation’s best interest.”
While the conflict-of-interest policy dissuades employees from owning a financial interest in a “competitor’s, customer’s, contractor’s or supplier’s business enterprise,” it does not make the same prescription for board members.
In 2017, Cavale, a former fitness gym purveyor, launched INFLCR as an app geared at helping college athletes develop their social media brands. The company evolved to become an online NIL marketplace after merging with sports technology company Teamworks in 2020.
Cavale unveiled AO last week in conjunction with announcing that he would be stepping down from his role as Teamworks’ chief innovation officer, which he had held since the merger.
Athletes Innovations was incorporated on April 27, two weeks after Teamworks closed a $65 million round of Series E funding. Cavale is not the only link between his former company and his new nonprofit.
Former Obama White House official Reggie Love, a Teamworks director, is also a board member with AO, according to its introductory press release. He is joined by former America East Conference commissioner Amy Huchthausen, sports attorney Mit Winter and “others to be announced at a later date.”
Cavale’s official role is as Athletes.org’s board chairman, while his unofficial role may be the mail sorter: Both AO and Athletes Innovations list his Birmingham house as their principal address.
Athletes.org hails itself as an organization “for athletes, by athletes.” The college players association is co-founded by Cavale, who played D-II baseball at the University of Montevallo in Alabama, and former NFL and Penn football player Brandon Copeland.
Copeland, in his capacity as AO’s first executive director, also has a financial interest in the sponsorship deals struck by the nonprofit. His compensation package includes a commission for such agreements. While Cavale said Copeland would not receive a bonus based on the initial funding from Athletes Innovations, he did not rule that out for future payments.
The IRS permits nonprofit employees to receive incentive compensation but scrutinizes that those payments do not inure to a private benefit. Cavale said Copeland and other AO employees would be eligible for what he called a “standard bonus.”
The pair have established their association as an alternative to a potential college athlete union, at a time when that notion has reached its height of popularity. A recent Sportico/Harris Poll survey found that majorities of Americans support college athletes’ rights to obtain employee status (64%) and to collectively bargain as a labor union (59%).
However, in promoting Athletes.org, Cavale has criticized labor unions for being top-down in their leadership structure. He has also warned about the potential unforeseen financial consequences arising from a future in which athletes are deemed employees of their schools.
Athletes.org reported to the IRS first-year revenue estimates of $1.25 million—most of which would come in the form of contributions and grants–and $815,000 in expenses. As a public charity, it would be required to detail any transactions with those who the IRS calls “interested persons” on its future tax returns.
Cavale said he anticipates AO rolling out a number of new partnerships in the coming weeks.