Does USC control the organization that holds its athletes’ NIL agreements?
Are the University of South Carolina and its main booster club really separate entities? No, says a new filing by an open records advocate who is seeking to obtain agreements on how the state’s flagship university will divide up revenue among its athletes.
An ongoing Freedom of Information Act lawsuit between Frank Heindel, a former grain merchant, and the state’s flagship university over the contracts governing revenue sharing agreements with its athletes has demonstrated the extent of the relationship between them.
The University of South Carolina has offered a number of different and at times apparently contradictory explanations for why USC does not need to disclose the agreements governing revenue sharing and NIL contracts.
Among other arguments, lawyers for the school have said that USC does not have to hand over any of these agreements because they are made between students and third parties.
By the university’s own admission, NIL licensing agreements are made between student-athletes and an organization called Ascend Carolina, LLC. But rather than being an independent organization, Ascend is a “wholly owned subsidiary” of the Gamecock Club, which is the main booster organization for USC.
But Heindel argues that public records show these organizations are run by the university’s athletic department.
The address of both the Gamecock Club and Ascend Carolina, LLC is 1304 Hayward St., which is USC’s Rice Athletic Center. According to tax filings, the director of the nonprofit Gamecock Club is Wayne Hiott, who is also the senior associate athletics director for development at USC, according to his LinkedIn.
The phone number for the Gamecock Club is a university telephone number, according to Heindel’s memo.
Heindel described the entities as being “alter egos” created by the university “in a blatant attempt” to avoid open records laws.
Legal precedent in South Carolina has previously found that organizations supported by the university are considered “public bodies” that have to produce records in response to FOIA requests.
“If it walks like a rooster and crows like a rooster, it is a Gamecock supported at least in part by the University and subject to the FOIA,” Heindel wrote in his memo.
It wouldn’t be the first time that USC has run into legal issues while trying to deny public records requests to an entity that it claims it does not control. In 1991, the state Supreme Court ruled that the South Carolina Research and Development Foundation had to hand over records under FOIA because it had received public funds.
In an earlier order in the case, Judge Daniel Coble wrote that he was “perplexed” by the school’s apparently contradictory reasons for not turning over the records. But at the same time, the circuit court judge indicated that he had some sympathy for the university’s argument that releasing information about the revenue pool could provide student-athletes’ identifying information and damage the school’s competitiveness.
Coble has yet to rule on whether the university will have to hand over the records that Heindel has requested.
What do we know about the contracts?
Attached to the memo is a template for contracts between athletes and Ascend Carolina, LLC. While the document provides few details, it does outline the structure of the contract that governs the relationship between USC student-athletes and Ascend.
Crucially, it indicates that Ascend will be allowed to terminate the contract in the case of a “material breach,” as well as withdrawal from the USC team, criminal conduct, academic neglect, misrepresentation of background and ineligibility, among other reasons.
The student-athlete could end up owing “lump-sum damages if terminated for cause,” according to the document.
All content made by the student-athletes will be considered “work made for hire,” according to the contract template. That means that Ascend Carolina will own whatever the athlete creates.
Hiott is also listed as the point of contact on the contract template. Ascend Carolina holds a sc.edu email address, which is the email domain for USC.