I’ve been an athlete for as long as I can remember.
Sport has taught me the impact of intentional leadership, the collective power of the team, the freedom of discipline, the fruit of adversity, and the beauty of human connection. Sport is a stage. An athlete’s peak performance is temporary, but the stage of sport provides the potential for athletes to make an eternal impact, when they leverage this stage beyond their ability to perform.
My M-O is simple. I want athletes to use the stage of sport to set the stage for the rest of their lives. I want them to use all they’ve learned to become the best possible leaders and change agents in our society.
John Shegerian: This edition of the impact podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy; and is the largest fully integrated IT and Electronics Asset Disposition provider and cybersecurity-focused hardware destruction company in the United States, and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit ERIdirect.com.
John: Welcome to another edition of the Impact podcast. This is a very special edition as I have my 2 partners on with us today, Daniel Hennes and Brendan Egan. We’ve got with us today the Founder and CEO of INFLCR, Jim Cavale. Welcome to the Impact podcast, Jim.
Jim Cavale: Great to be here guys. Excited to talk.
John: Hey, listen. My audience knows my 2 partners really well, Daniel and Brendan, and they know what they’re doing over at Engage, but we’re going to get into that a little later. But, first, Jim, tell us a little bit about your backstory. You have a fascinating backstory, both as an athlete and as a businessman. Can you share a little bit about where you grew up, how you even got to where you are today?
Jim: Yes. It’s funny. I’m a former student-athlete. I played college baseball. My journey and passion for baseball really led me into my career as an entrepreneur. I’m from Upstate New York, Syracuse. If you’re familiar with Upstate New York, and especially Syracuse or Buffalo, you know that we lead the nation every year in snowfall. Lake effect snow is our thing. So, I grew up in a snowy climate and a cloudy climate, and I could not wait when I graduated from high school to get down South and play college baseball. Because as a baseball player, I always want to play in a warm climate. And so, I took a scholarship opportunity to a Division II school in Alabama and the University of Montevallo is where I attended and played ball but also it’s where I found my real passion as an entrepreneur. I built my first business while I was there, did that for about 5 years out of college, up in Birmingham, which is about 30 miles from the University, and really fell in love with the South, but also fell in love with just the opportunity of taking the things you learned from sport. So, the disciplines you learned with your body, the team collaboration, and leadership aspects, and applying it to building something that’s going to bring value to the market. That’s what business is. I really had some fun with our first business as a recruiting network that connected high school athletes with college coaches, did that for about 5 years. And I exited that business to start building a fitness brand, Brick and Mortar, and did that for 7 years. Grew it from a garage to 47 locations across the country. We franchised that. It was a fun ride.
During that time, I met my wife, built a family. I was joking[?]. My wife is from Boston and Puerto Rican. I’m an Italian guy from New York. We met in Birmingham, Alabama. What are the odds? But we have 3 kids and they get mom’s Boston accent, Dad’s New York accent, and their teacher’s Southern drawl every day, so you can only imagine how unique they talk and act. But we have a lot of fun down here, great family. My wife’s also an entrepreneur. She has a beauty on-demand app called Glow that helps women get hair and makeup spray tents on-demand at their houses and hotel. So, it’s funny. As I built INFLCR, which we’re going to talk about in a second, it’s been fun because it’s been happening in conjunction with my wife building business. We’re in the same building. INFLCR’s on the 3rd floor, Glow is on the 2nd floor; and we have a lot of fun, not just raising our kids but also doing businesses together. INFLCR is something that really is in the mid-2010s. I started hearing more and more about Ed O’Bannon’s case. Being in Birmingham, this is the mecca for college sports. The SEC headquarters in Birmingham, Swag[?] headquarters is in Birmingham, the Gulf South Conference, which is a big Division II league is in Birmingham. So, you have a lot of conference headquarters here and, of course, a lot of schools are around here. Being friends with Greg Sankey, another Upstate New Yorker that ended up in Birmingham, is the leader of the SEC. I started hearing a lot about this whole O’Bannon case in NIL from him and other peers of his in the mid-2010s. I found it interesting. There’s this aspect of NIL is not a matter of if but when, and this whole case of Ed O’Bannon realizing that his likeness had been used by a video game. Here he is, 10 years after winning a national title at UCLA, selling used cars in Las Vegas, the owner of the dealership. He says, “Come on for dinner tonight.” He goes to the guy’s house and he’s playing a video game with the guy’s son, that he’s in. He’s like, “Wait a second.” That leads to him realizing that there’s some value being lost by athletes and a case that the Supreme Court votes in favor of O’Bannon against the NCAA.
To me, that was the writing on the wall that led to a lot of other dominoes that helped me realize it’s time to, after 7 years, sell my share of the Iron Tribe Fitness brand I had been building, and start building something in the tech realm for student-athletes to build their brands. Because while they can’t do NIL today, this was 2016, they’re going to be able to do it eventually. Today, they do need to start thinking of their social media as a channel that they need to manage and use to grow their brand for whatever opportunities are out there ahead of them. We launched INFLCR in 2017. Kentucky men’s basketball and football were the first 2 clients. We grew fast. In 2 years, we grew to pass 100 Division 1 schools and 1,500 teams. Teamworks acquired us at that point. Since then, we’ve grown past 200 Division 1 schools and more than 4,000 teens. We’re probably abroad as well, I guess, primarily in other areas. We help athletes build their brand. And more recently with NIL, we help them build and manage their NIL business. It’s been a lot of fun.
John: Teamworks is owned by you, also, is that correct?
Daniel Hennes: Teamworks owns them.
Jim: Teamworks acquired INFLCR in 2019, about 2 years after I founded INFLCR. We did a really awesome transaction with them that really was tied to a series C, that Teamworks was raising $27 million rounds to fund growth, and obviously, one of the biggest verticals in college sports at that time, and still, is NIL. Instead of raising a series A with Venture Capital, we chose to go the route of being a part of the Teamworks family and having the backing of the series C and just ecosystem. At that time, Teamworks are already at all major college institutions under multi-year contracts, and they already had most of the teams Pro Sports here in America and abroad under contract. So, it was really a cross-selling growth opportunity for us as well.
John: Okay, but I mean, Jim, you already were a successful entrepreneur, obviously financially you did well with your analog gyms and sold your interest in that but taking the Ed O’Bannon case and then starting INFLCR and for our listeners and viewers out there to check out INFLCR, you can just go to…I have it up here on my screen so give me one second here, www.inflcr.com.
Jim, but it’s almost like a prophecy that you connected the dots with the O’Bannon case and that you thought that, “Hey, NIL would be big.” But you didn’t know when so you started managing the social media and online presence of these athletes before. So, it was almost like you were 3 to 5 steps in the chessboard that nobody else was doing that just now manifest itself on July 1, 2021. So, how did you even connect the dots and what informed you enough, as an entrepreneur, to connect those dots so far in advance where no one else really saw it and connected those dots as you did in INFLCR?
Jim: I mean, it’s from a decade before that just making mistakes and learning, right? In my first business, we had a really good subscription revenue business and we changed the model to have more users and make money off of advertising. It was an awful decision. Do you know what I mean? We killed the value of the company with that decision in a lot of ways. In my second business, Iron Trap Fitness, we didn’t really pick a vertical in a market to go after. We try to kind of be everything to everyone, and we watched Orangetheory start at the same exact time. We laughed at Orangetheory. We thought, “I’d never go run on treadmills in a group fitness environment. Why would they do it?” But in Orangetheory, we’re going to help women who want to sweat a lot and feel like they’re in a club again, and they attack that market and they went from 0 to 500 gyms while we went from 0 to 50, and I learned you had a focus on 1 market. So, I had all these learnings from mistakes. Those are 2 of many. One mistake as entrepreneurs makes a lot is they get so passionate about their idea that they don’t go to the market with the idea, even before it’s [inaudible] before I spent a bunch of money on it to see what the market says; and learn what will the market write a check for. Because the market will talk to you with their checkbook, kind of an old-school reference for the younger audience. They’ll talk to you with their venom[?].
Anyway, so to me, taking that principle, take your concept and idea and let the market take it to where it needs to be. And then the second principle was Instagram, a lot of tech companies have taught us this, find[?] one sticky clean hook to get users and then you can do all the other things later. And so, brochures and videos are I went out into the market to see if they would write a check for talking to Calipari and Kentucky, talking to Gus Malzahn in Auburn. Through[?] connections I had for my first business, I can set those conversations up through those visits. I realized the kids, student-athletes, were lining up at the locker room for the photographer and videographer to give them pictures and videos after the game. They wanted pictures and videos of that so they can share them on social. And so, I realized if we just start there, if we just create an app, it’s easy to organize and personalize all the pictures and videos for each athlete in real-time after the game is over. They’ll be in there every day and the schools will pay for it. And sure enough, schools paid for it and kids used it, and then you build the NIL stuff that’s coming. Then, you build stuff even before NIL. Like helping them understand how much their followers have grown and what that could be worth of their approach in INFLCR and those kinds of things. And so, Instagram would have that pictures. You’re going to share pictures, not even on Instagram. Why? You got Instagram stories, which was done just by building Snapchat and their Instagram. Get Instagram reels, which is then building TikTok and Instagram. You got to get your audience first then you can expound on your feature set. And so to me, this was a perfect way to start before NIL is real because we get multi-year contracts with the schools then we’re going to have the problems NIL was going to create for us to solve later. And that’s somewhat how it worked out. It wasn’t that easy. But that’s the principle.
John: Okay, so, you had such a strong vision and a conviction of what you were doing. How did you get Teamworks to believe in that and when you sat down at your table together, you and the leadership from Teamworks, what was your hypothetical vision as to when NIL would go live? Did it turn out to be faster than you thought or later than you thought?
Jim: I, first of all, want to say that I love predicting the future and love taking risks. I think over time I’ve gotten better at seeing what’s next, but I’m not Nostradamus. I never saw it. NIL rolling out like it rolled out this past year. I don’t get anybody did. But there were clues. So in 2019, the state of California passes the Fair Pay to Play Act and it’s going to start in 2023. At that point, the NCAA has a decision to make. If you talk to any of the leaders in the college sports world, especially commissioners, they’ll tell you they could have sued the state of California or they could have just sat and watched, which is what they did. By sitting and watching. The clue was this is going to happen. At that point, look at other states namely Florida, who don’t want to be second or third. They want to be first and now, they’re not first because California passed a bill. Unless. they passed their own bill and make it earlier. So, Florida, who we happen to have a lot of friends in Florida, Darren Heitner is a friend and he kind of tipped us off to, “Hey, this is going to happen in Floria, faster. It’s going to move the data.”
So at that point now, the NCAA lost all control and they’re still, even at that time in the middle of the Alston case, which makes them feel a liability of setting yet another, what is looked at as another limiting role to student-athletes with any trust exposure to them. So, they really weren’t acting for a reason even though a lot of Commissioners and folks will say they could have sued the state of California regardless of their stance and position with the Alston case. And so, these clues showed that this was going to start in 2021. And then the solidifying factor was the NCAA pass its recommendations for NIL rules in April 2020, a month after the pandemic really started. And at that point, it’s definitely going to happen. They’re telling everybody they’re going to set the rules in January 2021. We see they’re not going to set the rules. They’re going to wait out the Alston case. In June 2021, they lose the Alston case like they lost the O’Bannon case. Now, you know they’re not going to set the rules at all. Ten states have their own rules, which hurts the 40 states and schools that don’t. So, the NCAA passes a waiver a week before July 1 saying, “Everybody can do what I own[?]. Instead of having one set of rules, we’re going to have hundreds of sets of rules because every school can make their own policy.” And that’s where we are today to the point where states are even trying to repeal their laws. Alabama is one of the dozen or so states that has an active law. They want to repeal it because they really want to limit the University of Alabama, Auburn, South Alabama with their policy. They would have had whatever policy they want. If your school is in a state that has a policy, you kind of got a basis under state law. So, I never saw that last part. I saw a lot of the other things. I felt like the assembly wasn’t going to set these rules, starting at the beginning of last year. I didn’t need to wait until June to find that out. But every school having its own rules. I don’t think anybody saw that, and the lack of involvement from the federal government is something that I only think surprised some but is probably going to continue because I think they’re just watching the chaos to see. If we did step in, what are the roles need to be? And to do that, you got to see who’s breaking. The rules are doing things the wrong way. So, you can set the right laws.
John: Okay. I’m going to get into now what NIL really is for? Our listeners and viewers don’t know, and I want to get into what you’re doing with Engage. But before we did that, were you now better situated to take advantage of the NIL chaos that ensued and opportunity therefore that was created because of the vision that you had to and the guts that you had to partner with Teamwork a couple of years prior?
Jim: I mean, listen. So, Teamworks is a collaboration tool that has spawned into the operating system for the athlete altogether. If an athlete needs to know about flights, get a playbook digitally, if they need to report attendance to a class, anything and everything that the team is going to message the athlete or communicate and collaborate with them on goes through Teamworks. And so, it’s used frequently on a daily basis by athletes and teams. Its company, as I said, started about 10 years before we did and had a huge, huge market share and operational infrastructure that could help us grow faster. So for me, it was getting to know the CEO [inaudible]. Before, I was really even going with INFLCR. I even had a client. I was introduced to Zach, and I realized that Zach loves entrepreneurship as I do. He’s cut from a similar cloth[?] is me. He’s a Greek from Chicago, then ended up in North Carolina. I’m Italian from New York ended up in Alabama. We got a lot in common and [crosstalk]
John: I think it ended up down south.
Jim: Yes. So, we hit it off. We hit it off. When I raised a seed round, he was there to kind of help with that and give me some advice. And when I was setting my investor updates, he saw the growth and I was ready to raise a series A. He came to our Storyteller Summit, which is our annual user conference for all the schools and their officials to come to. We had over at Atlanta, Turner Studios. He came there, saw the event, and pulled me aside after he’s like, “I got an idea[?].” What was an idea turned into a conversation with the board that turned into an offer to acquire INFLCR in a way that not only was a good cash deal for everybody involved but also traded our stock for Teamworks stock? Teamworks is a company that’s slowly but surely becoming the titan of sports tech. Teamworks has since acquired other companies like Notemeal, which is the dietitian tool that athletes used to report their nutrition, and there are others that Teamworks will surely acquire overtime to really become kind of like a Google app for the athlete.
John: So, you’re filling out one role in their ecosystem, but they’re an ecosystem play.
Jim: Ecosystem play. Yes.
John: And your vision was you felt and you saw the chemistry that you and the CEO of Teamworks had and you were culturally aligned as companies. So, you saw that that was a good fit.
Jim: Yes. I think you know with M&A deals, it’s dangerous when a company is so young because it’s a smaller team and everybody’s tied to the founder. If the founder is not happy and if the deals that right for the team, things could blow up. Products young. All these things. But I’ve done things on my own. At the time, I owned 100% of INFLCR and I was the board. And now, I’m going to Teamworks and I’m going to be the CEO of INFLCR but now I got a board. I got a reporting structure. I can be fired. And a lot of people knew me or were concerned for me that I couldn’t handle that environment. But the only challenge I saw in the deal was ego and pride, and I felt like it was going to work a really good muscle for me and my progression as an entrepreneur to have a venture capital board. To have a business partner with Zach that owns a bigger piece than me. Also to have all these operational sales and marketing and other advantages that were going to help us grow faster.
It turned out to be a very, very big blessing because, near the pandemic, we didn’t grow 400% like we did the year before. I mean, we still grew almost 100% but not 400%. But this 2021, we grow almost 3x again. And so, Teamworks has been the best decision I’ve made in building INFLCR and being a CEO that’s been able to do a deal and stay. It has been a lot of fun for me to prove to a lot of people who didn’t think I could do it or didn’t things that can I can do it wrong. So, I’ve really enjoyed it.
John: So now, where are we with NIL? And how did you meet Daniel and the partners that he has at Engage? Daniel is living almost through the flow of your career. Dale’s[?] partnering with great entrepreneurs just like you did with Zach. He’s looking for great people to partner with as well culturally and also in terms of vision. Where is NIL right now? What does NIL mean for our listeners and viewers out there that have no clue what that acronym stands for and then why Engage and INFLCR?
Jim: So first of all, NIL is just for the layperson, every athlete has a name, image, and likeness that they sign away when they play college sports and the school can use their name, image, or likeness on the media guide. The media can use it in promos for the game. They can use the athlete’s name, image, or likeness on the tickets. I mean, you name it, right? EA Sports could use them to a degree in video games, right? So, that is not happening anymore. The waiver that NCAA passed last June 20 21, basically [inaudible] that by law and provided an avenue for student-athletes to be able to monetize and manage their name, image, and likeness in a way that’s never been possible before. So, whether they want to do an endorsement for a company, whether they want to make an appearance for a company, signed autographs, sell apparel, you name it. There are things they couldn’t do before that weren’t even profiting them. But they want to do like raising money for a charity. There are so many different things they can now do. And so, individuals and businesses can engage an athlete in a monetary deal. Now, the media wrote about this in a way that misled athletes and really the market and etc. to think that NIL is this overnight payment. Because the media wrote about NIL like about Zion Williamson and Trevor Lawrence who, of course, if NIL was possible when they were in college, they would have made a lot of money. But the reality is NIL is the same as getting a 4.0 GPA or having a 500-pound deadlift that you can do 3 times or in playing time or being the best player on your team, scoring the most points. You get out what you put in. And everybody is not going to make 5 and 6 figures, let alone 7 figures, a year with their NIL.
The mere fact that there are people who say this is a billion-dollar mark. Well, there are 500,000 student-athletes. Each of them makes $2000, that’s a billion dollars. So, the per athlete value here is not meant to be tens of thousands of dollars, let alone hundreds of millions per athlete. But it’s an opportunity. It’s another way athletes can benefit. And unfortunately, athletes have been misled. So, on July 1 when NIL started, tens of thousands of athletes posted a viral post that was a screenshot of somebody’s notes app, basically, say the NCAA is allowing me to now profit off of my name, image, or likeness; and I want to let every brand out there know my DMs are open for business. As if July 2nd, they’re going to get a bunch of offers; and by July 7, they were going to be in the money and that’s just not what happened. There are 500,000 student-athletes; 10 of them will make 7 figures; 100 of them will make 6 figures; 1,000 of them will make 5 figures, and the rest of the 499,000 will make 4 figures per year, and that’s okay.
And I want to say that because I want to credit the power of the market and why this opportunity is so awesome. And that’s because you’re going to have billions of dollars flow to athletes, and athletes are learning a skill beyond anybody they make, which is thinking of yourself as more than an athlete. Realize you’re not going to play forever, and start to use the stage you’re on today. Set the stage for the rest of your life. Just like I’ve been playing DII baseball. That’s the great part about NIL. But the part that’s a little different is, “Geez. I start for my team in this other starter for this other school makes $10,000 a year and I make nothing. I’m a failure of my NIL.” And that’s not true. It’s just that that person is taking initiative in building their own business, and you’d have to do the same and you got to learn and have some skill to do that. And so, I worry about the mental health side of all this a little bit, because I think there can be a lot of athletes that feel like failures. A lot of coaches. They feel like failures because their athletes are making a ton of money. A lot of athletes that might feel like failures to the whole student body is me[?]. We’re talking about your top 10% could make some good money doing this, and that’s okay. Everybody’s not going to have a 4.0. Everybody’s not going to start. And I think we’ve got to continue to look at the numbers to support that message. But that’s what the numbers are telling us so far.
John: Daniel, when did you meet Jim in your journey as an entrepreneur? And then, when did you realize that he’s someone that you want to be partners with just like he realized that was he wanted to be partners with Zach? Explain the entrepreneur to entrepreneur cultural alignment and visionary alignment that you saw?
Daniel: Yes. I mean, well, I’ve been following INFLCR for a while just because, obviously, you got to know what’s going on in the space, and I always thought they were very sleek, well-branded providing a lot of value; and also just having friends, playing college sports at Tennessee and Auburn and schools that are are INFLCR schools. I was pretty familiar with them. We had a feature come out on us on ESPN like June 28. And right after that, INFLCR’s PR person, Steve, I think the last name is Delsohn or Desean[?], whatever. He reached out and set a call with sort of the INFLCR team with me and Josh[?] and everyone in. Right away, it was just clear that this was a company that was all about providing value for the athletes and helping the athletes. We are also a company that is about providing value for the athletes and helping the athletes. And I thought for us, I think everyone sort of saw the fit where they helped with a lot of the compliance, brand-building, storytelling, all of those things that are so important. And we have a really good platform that helps them monetize all the work they’re putting in. So when they do everything right, we have a really good platform that helps them, as Jim said, raise money for charity, and I’m glad he brought that up because people really underestimate how many athletes want to do that and how many of them are doing it quietly. So, we have a platform that helps guys raise money for charity or helps guys get endorsement deals or speaking deals. So, it’s just one of those things where it’s like it was an easy fit. The more athletes we have on our platform, the better. And for INFLCR, the more they can be doing to provide value for athletes, the better. So, it was a very simple easy fit. And it’s nice to have a partnership not take a year to execute. It was very, very efficient. It was a good thing.
Jim: Well, the thing is to be one of the places that athletes need a ton of help with NIL is this kind of bookings category, appearances category, and another so many problems we need to solve with NIL. The misconceptions I mentioned before, I won’t repeat that. They’re also met with this reality that the only place NIL has been done in sports before July 1, 2021, was Pro Sports. In Pro Sports, every pro athlete has an agent. That’s part of being a pro athlete [inaudible] represents.
John: [inaudible] their small businesses.
Jim: Yes. And then, they also have a Players Association. And so, those 2 agent Players Association help with is how do you do a deal? What are you worth? When do you do the deal? How do you fulfill it? Where do you go? When you are going to be there? When do you smile? What shirt do you wear? If you’re doing an endorsement, what should be behind you? What should enlighten me? Athletes don’t have any help with any of this, unless you’re great[?] and young in Alabama with CAA representing you and you got to make a million dollars for CAA to one work with you. So, that’s a real issue, and I feel like people just kind of gloss over it. Another thing is student-athletes, our students. So, they don’t have as much time. It’s not just playing the sport. They got class to goat. And so what I love about Engage is what streamlines that for this category that’s going to be a big opportunity for your appearances. For our athletes to be exposed to and that’s why we have a partnerships team that Daniel and company worked with to put this together, neither Street Camp and Joshua[?] Lander and company, they’re helping our athletes get exposed to the very best platforms that can save them time and also bring them opportunities and give them what they need to fulfill them properly so they can make money. And that’s what Engage solves for us and that appearance.
Daniel: The most important thing, before you move on John, it’s about helping athletes get what they’re worth. What happened on July 1st, a lot of companies were saying, “Oh. We’ll pay every student-athlete.” And they’re giving them 30 or 40 bucks. At the end of the day like fundamentally what’s happening there is like, “I’m sorry. It’s nice for the college kid to have that money.” But the company still taking advantage of the kid in that case. They’re paying $30 for something that with a pro-athlete would cost them thousands because what those agents in Players Associations do is help protect value. So with our platform like I take, Velus Jones and Hendon Hooker, 2 kids in Tennessee we worked with a lot.
One of my favorite things about their process with appearances from now to when it started is they now we use our platform to go back and negotiate because they know, “Oh wait. I have a market rate. I need to be getting a few grand. I need like…” They understand their value and they’ve learned their worth. They learn what they can charge for these things, what these groups are willing to pay and not to just accept every first offer. One of my favorite things now is like when one of our athletes, Velus is a great example, he’ll send me a contract and say, “Hey, just wanted you to know, to put this to your platform for final review.” He’s like, “I noticed these few things were off. Am I right?” And to have athletes who’ve been through our platform and used it on their own, and now understand what really goes into these deals. That’s the most rewarding thing for me is they’re getting what they’re worth and they understand conceptually why that is the way it is. So, they’ll be better at picking their agents. They’ll understand how to protect their value long-term. Getting what they’re worth is the most important thing. And there have been way too much of companies trying to get PR wins by saying will pay every college athlete. While at the end of the day, they’re just exploiting them. That’s what’s happening.
Jim: What’s happening is those are great points. I love the idea too, of not just them getting what they’re worth annual but in the process of that learning how long they’re all me to keep protecting and getting what they’re worth, even without you or me or anybody involved. That’s huge. That’s a life lesson they’ll keep for the rest of their life. They will be teaching young people that 10 years from now. [inaudible] talking about. It’s a sad part about NIL is this democratization, commoditization aspect that once again, do we want every athlete to win and a bunch of athletes to make maybe a smaller amount while other athletes are going to make more like…I mean, that’s the market. That’s great.
But to create gimmicky group campaigns that devalue a great deal of the athletes that are in the campaign just so we can say we help this many athletes. It’s a commoditization that’s happening. That is distracting people and giving brands the wrong idea about what these student-athletes value truly is. Because I’ll tell you these student-athletes aren’t necessarily true INFCLR in that they don’t post 5 times a day on social media. They don’t all understand how to have a very good context on their social that the brands they promote could fit into. They could all be better than that because they got their followers because of the position they have for the team more than posting every day. But they have followers that are whether their peers or youth, very, very targeted to the spoiler [inaudible] in what they’re about and very engaged. These athletes get 25% engagement. A brand gives 3% when opposed. So, they bring a ton of value, especially to a company that’s trying to reach people in the sport that the student-athletes playing huge opportunities. And so, we got to find ways to show how student-athletes are a really great deal for brands to invest into and not a way to get around working with pro-athletes [inaudible]
Daniel: It’s funny. Talking early on to just to some of the brands we work with the brand marketers. We know we’re very blunt there. NIL seems like the greatest value proposition ever because we know exactly what we’re getting and we have to pay like half of INFLCR or like half of the normal INFLCR rates. And now, [inaudible] like we have a campaign coming up that I’m really excited about what this cool company, MEAL learning, where I’m not going to disclose terms, but they’re spending a really, really significant amount of money, and they’re paying these college athletes like they would pay INFLCR, and it’s a EdTech startup that wants young athletes to do online learning. o So, they understand the value. They’re doing it right. They’re paying the athletes right. And it’s the entirety of their marketing plan. And instead of just going out and giving every athlete $30, they’re picking 10 to 20 kids to our platform that really matters and our right to come in and shoot content and do this right. And Jim you’re so right like the commoditization of it is concerning for me because companies are taking advantage of it and doing the wrong way and other companies are coming in and saying, “Oh, well, literally, we think we can get this kid for $50.” And it’s like, “No. It’s actually going to cost you 5,000 and the kid knows his worth now.” And we’re trying as much as possible to educate kids and protect them on that so that they know what they are worth and avoid that stuff happening.
Jim: It’s awesome.
John: Daniel’s partner, you never heard of the acronym NIL before. Daniel started bringing it up to you and then you never heard of INFLCR either. Neither had I. Why with all the opportunities that come across the desk at Engage that Daniel brings to you as the senior partner on the team and the CMO of the company? Were you so excited about INFLCR and the partnership and NIL opportunity?
Brendan Egan: I think, John, Jim [inaudible] with us. He was years ahead of the trend. So, I think, Jim, you guys had a unique advantage in this phase from a platform standpoint, technology standpoint, a marketing standpoint. I mean, you guys check all the boxes. I think you were the front-runner. So you guys, kind of had that for the first comer advantage I think. And what’s interesting is Engage, when we got started, NIL was this idea that Daniel told us about and we were like, “Yeah. That’s really ever going to happen during our business lifetime.” Luckily, it kind of fell into our lap.We were just kind of taking advantage of the Pro Sports market and the speaking Market but it kind of fell into our lap as well. And I think it’s something that’s probably as you would agree, Jim, probably just getting started. So, I think it’s going to be an incredible opportunity, not just for our companies but I think there’s a lot of other interesting companies that are going to emerge as a result of it.
Jim: First quarter mile of the marathon[?]. It’s very early.
John: I know, we’re up against some timelines here. I want to be respectful of everybody’s resources. But Jim, I recently read about you, when I was doing some homework on your career, and someone asks you online, what you love about your job? And you said making an impact. And here we are on the Impact podcast. Share what making an impact means to you as an entrepreneur and then give us a little vision on where we’re going to be a year from now with NIL before we have to sign off for today?
Jim: Well, making an impact starts when your founder and it might just be you and one or two other people and you’re all dealing with the client, the user, whoever you’re serving, and you’re just trying to figure out where do they have problems? How can you solve those problems? And so, that’s fun and that lasts for a certain phase until you start to scale. But then you realize that making an impact isn’t just thinking in line with your clients, it’s creating a great place for your team. You have to build a team that’s talented. But a team that you’re pouring into your learning, their stories, your understanding why they’re here, you’re understanding what they want to accomplish, your understanding everything about the people on your team so you can pour into them. You can impact them. You can transform them. And if you do that whether they’re an engineer, a product person, a marketer, sales, partnerships, they’re going to pass that impact down to the client through their department, through their concentration.
And so, that’s one way just through the operation, not just impacting the clients but impacting people on your team. But then bigger than that, I thought for a while that I was being led into getting more into nonprofits or having a ministry or something that I could spend all my time on. We could help people that were less fortunate. And there’s been a non-profit I worked on for the last 10 years that helps fatherless children, and that’s one of my passions. But I’ve also traveled abroad and been part of groups, bringing clean water to 3rd world countries. Seeing all the stuff, I started thinking that’s what I need to do. That’s what God wants me to do. And then I realized about 10 years ago, you can use a for-profit business to fund and impact so many causes out there. And so thinking about your business from a philanthropic standpoint where instead of thinking all about being profitable, instead of thinking all about everybody growing individual, which is super important; shareholder value, people grow in salaries, and opportunity with themselves for their own purposes; but the business can do a lot to support other initiatives. And so, that’s what impact also means to me is using business as a launching point to help causes that you’re passionate about. People that are less fortunate. I’m a big believer. I promise this is not a political statement, but I don’t think the government can solve our problems. I think only we care. And so, we’re blessed for a reason, and we’re not blessed to want more and go get more. We’re blessed to bless others. And so, I actually don’t think it’s the government’s job to solve this problem. It’s my job and our job. And so, let’s go figure it out. And so, that’s kind of how I look at life, whether it’s through my family in that lens or through business. And I think that we have an opportunity with all the wealth we have here in America to continue to fix problems when we’re successful with business.
John: You’re a baseball guy. So, Jim, let’s leave it at this. Where INFLCR is right now, Teamworks is, and NIL? Where are we at the top of the second inning, the bottom of the first, top of the fourth? Where are we?
Jim: Yes. I think we’re in the second inning but I think that the bases are loaded, and I think the visiting team is going to bat around, and I think that the umpires might have to figure out there’s a 10-run rule. Where I’m going is you asked me to predict the future, there’s a lot of frustration right now about just the lack of regulatory uniformity. And I don’t think that’s going anywhere. I think it is going to become more and more relaxed until there’s any regulatory uniformity. I think the way that the system will be played by people who want to essentially use NIL as an excuse to legalize pay per play is going to become more and more of a brow razor. People are going to say, “Well, is that legitimately NIL? What is the athlete do for that birthday party appearance at the donor’s house where they got paid $50,000?” That’s all just the reality of where this is going. But I actually think that while it will eventually lead to regulatory uniformity, I think that like a lot of administrators said, this is also going to lead to Media Revenue sharing and actual employment status options for student-athletes. I say options because I think that with those new provisions that athletes will be able to take advantage of in the near future in 3 to 5 years, I think that new expenses and liabilities will be added to the athlete experience, tuition. “Hey, we have one straight coach here.” But we got 4 because we want to use that recruiting. You guys are going to share the expenses of the additional three. “Hey, we give you one pair of sneakers at the beginning of basketball season. And if you want to have a pair of sneakers every game, you’re going to now pay for every pair of sneakers over one pair.” That’s how this thing is going to kind of flow. It’s going to be really interesting. I think a lot of student-athletes pass maybe the top. I don’t know, 30 schools and sports segmental in basketball and football are going to realize that they actually have a good deal right now with NIL. Tuition is paid for and the cost of attendance stipend. And I think that 31st school and on[?] are going to probably want what they have today. Whereas the top 30 schools are going to look a lot different and sports may be canceled at some schools. That schools have 30 sports. You’re sharing Media Revenue with football players. It can be tough to pay for women’s field hockey. And so, all of these issues running to be opened up by NIL and the reality of NIL. It’s going to be talked about and argued about and debated. All these things are being talked about internally at athletic departments across the country right now. They’re all being modeled financially right now because it’s going to become the Hot Topic of future college sports.
John: Well, Jim, I think there’s such a huge landscape in front of you that you’re going to just like you said, crush it, run the bases; and I know Engage is going to be part of that with you, and I know Daniel and Brendan are so excited. For our listeners and viewers out there that want to learn more about Jim Cavale and all the great work him and his colleagues are doing, you can go to www.inflcr.com. To find Brendan and Daniel at Engage, you can go to www.letsengage.com. Jim, I love to have you back on Impact. You’re definitely making a huge impact. You’ve convinced me that you’ve got this down. You have the right vision from the beginning, and you’re just executing against it now with Zach and the great people of Teamworks. Daniel, you are the same. We’d love to have you back together a year from now and see what’s happening in the third inning of this NIL game. Thank you all for joining us today. We can’t wait to see you on our next episode. Again, thank you so much, Jim, for making the world a better and more impactful place and for all the great work you’re doing as an entrepreneur.
Jim: Thanks, John. Daniel and Brendan are super excited about our partnership, and I appreciate you guys having me.
Daniel: Thanks, guys. Thanks, everyone.
Brendan: Thanks, Jim. Thanks, John.
John: This edition of the Impact podcast is brought to you by Engage. Engage is a digital booking platform. Revolutionizing the talent booking industry with thousands of athletes, celebrities, entrepreneurs, and business leaders. Engage is the go-to spot for booking talent, for speeches, custom experiences, live streams, and much more. For more information on Engage or to book talent today, visit letsengage.com.