The NCAA is investigating the University of Tennessee football program for a possible recruiting violation involving a booster group in a major escalation of efforts to curb the rapidly expanding role of outside money in college sports, according to people familiar with the matter.
The investigation centers in part on the use of a private jet by a so-called donor collective to fly a high-profile recruit — now the school’s starting quarterback — to campus while the university was courting him.
Having the booster group pay for quarterback Nico Iamaleava’s travel would be a violation of NCAA rules. The investigation comes after the NCAA fined Tennessee for different recruiting violations and signals the NCAA’s growing concern about the scale and influence of money funneled into college sports by corporate sponsors.
The case could have profound implications for the direction of high-profile programs across the country, especially in football, where outside money raised and disbursed to players by collegiates has reshaped the finances of college athletics. News of the investigation into the Tennessee athletic program was first reported by Sports Illustrated.
Tennessee officials are deeply concerned that the investigation could result in a devastating blow to the school’s football program, according to a person briefed on the matter. The program is already on probation for past recruiting violations, and school officials are concerned the NCAA could take drastic action, such as barring the team from postseason play and expelling players.
Facing this possibility, the school has hired several law firms and is considering a range of legal options to prevent any fallout.
At the center of the research are donor collectives, which are organized groups of alumni and other boosters who donate money to support teams. They have become a major and growing force in college sports in recent years, taking advantage of a new system created to allow players to take advantage of endorsements known as name similarity deals, or NILs.
Clubs are increasingly making sure that athletes are paid sums that rival those made by professionals. Iamaleava, the Tennessee quarterback, has a deal with the school collegiate that could be worth $8 million. After playing a limited role most of last season, he became the team’s starter in the Citrus Bowl on New Year’s Day, leading Tennessee to a 35-0 victory over Iowa.
At many Division I schools, collegiate teams, while not technically affiliated with the universities they sponsor, have become closely involved in high school recruiting and, in an era when athletes can easily move from one school to another in search of better opportunities, providing lucrative deals to keep star players.
The NCAA has set rules for those teams, including prohibiting them from explicitly offering cash to lure recruits, saying any deals can only take place after an athlete commits to a school. But the NCAA has also been plagued by losses in court, eroding its authority to regulate collegiates. Until recently, there was little evidence that he was policing them at all.
As a result, top college athletic programs, especially in football and basketball, have become an almost unlimited market, with coaches openly urging alumni and other supporters to keep them competitive by donating money.
Some schools have become increasingly bold, enlisting their state lawmakers to fight back against the NCAA when it tries to enact rules.
The latest example came in December, when attorneys general in seven states — including Tennessee — filed suit against the NCAA, calling any eligibility restrictions on transfers a restraint of trade. The Ministry of Justice also joined the lawsuit this month.
NCAA President Charlie Baker asked Congress to exempt the antitrust laws. He testified on Capitol Hill that those lawsuits — along with newly enacted state laws targeting NIL rules — have made it nearly impossible for the organization to govern its members.
The New York Times has counted at least 140 fraternities operating at schools with major football and basketball programs. Collectives now account for about 80 percent of all name, image and likeness payments to athletes, far more than all the brands for which the system was devised.
In looking into Tennessee’s football program, the NCAA is investigating a team backed by one of the nation’s richest and most outspoken collegiates, a booster-funded team called the Volunteer Club. That group is closely related to a marketing firm called Spyre Sports Group: The two entities share the same top officers and the same address in Knoxville, Tenn.
Last year, the website On3.com, which tracks collegiates, named the Volunteer Club the “top collegiate in the country” after the group said it had raised $13.5 million for Tennessee athletes.
The biggest prize was Mr. Yamaleava, a 6-foot-1 quarterback from Long Beach, Calif., who was the fourth-ranked recruit in his class.
“The nice word used is ‘collective’. But make no mistake: This is a war chest,” Hunter Baddour, chief executive officer of both Spyre Sports and the Volunteer Club, said in a podcast in 2022. “We’re out to raise money, creating a NIL war chest, where the Tennessee will be as competitive as anyone in the country.”
As his collegiate body grew, Tennessee improved on the field. After a long dismal season, the Volunteers posted a 9-4 record last year and the team finished the season ranked in the top 20.
Mr. Baddour also organized a lobbying group for this new industry, the Collective Association, which reportedly asked the NCAA to share some of its extensive television revenue with collectives.
Mr Baddour and James Clawson, the other top officer at the Volunteer Club, did not respond to requests for comment on Tuesday.
The NIL rules that came into effect in 2021 allowed players to be paid for endorsements, but continued to prohibit students from being paid to play. But collectives effectively found a way around this limitation.
They signed athletes to huge contracts for a small amount of work — sometimes as little as one social media post a month — to keep them happy and playing at their school of choice.
Last July, the NCAA fined Tennessee $8 million and placed its athletic program on probation for five years after finding “repeated and egregious violations” of the ban on coaches using cash to recruit players. These breaches took place before the name, image and likeness system: Instead, managers paid footballers the old-fashioned way, in cash.
Since collegiates emerged in late 2021, the NCAA has announced two instances where it penalized schools for name, image and likeness payments by boosters. Last year, he levied lenient sentences at the University of Miami after a booster posted photos of him courting potential transfer students for the women’s basketball team.
This month, however, the NCAA levied stiffer penalties — including a fine and a two-year probation — against Florida State after a football coach there took a potential transfer student to a meeting with a team. The team then offered the player $15,000 a month to sign with Florida State, the NCAA said. The player declined the offer and stayed at his original school.
