Is Mat Ishbia Leading UWM Into A Title IX Lawsuit?

When United Wholesale Mortgage CEO Mat Ishbia announced his company would be paying $6,000 stipends to all 133 Michigan State University men’s basketball and football players this school year, some sports fans cheered. But advocates for women’s issues and equity jeered.

Ishbia and UWM are longtime supporters of Spartan sports, so it was no surprise when he announced nearly $800,000 in company-funded stipends to all football and basketball players for the 2021-22 school year under the NCAA’s new “Name, Image and Likeness” (NIL) rules. But the lack of support for women’s sports did not go unnoticed.

“In 2021, this sort of blatant sexism is unacceptable,” Democratic Michigan state Representative Laurie Pohutsky said when Ishbia announced his plan. “All athletes, regardless of their gender, should have the same opportunities and be invested in.”

And it’s possible UWM could face a bigger problem than just bad press: Title IX.

Part of the Education Amendments of 1972, Title IX prohibits discrimination based on sex in educational institutions receiving federal funding. The law applies to all aspects of education but is commonly invoked regarding college athletics.

Ishbia’s stipends come as the NCAA debates its handling of NIL rules. A player’s name, image, and likeness are the elements that make up a person’s legal “right of publicity.” Examples include an athlete’s name on a jersey for sale or an image of an athlete appearing in a video game. 

Importantly, like Ishbia’s stipends, NIL payments do not go through universities. It is a direct payment to an athlete for their NIL rights, which the university has no say or involvement in. But does that mean they are exempt from Title IX considerations?

The answer isn’t clear, says Jason Chung, Executive Director of Esports and assistant director of Sports Management at the University of New Haven.

“I think it would be a stretch to have those federal regulations impact third parties. But honestly, we’re at a critical juncture right now and nothing is really clear,” he told The Mortgage Note.

“We’re not quite sure, to be honest. There will be several rounds of litigation around it, I’m very sure.”

He added third-party compensation for NIL “would definitely lead to inequality between the treatments of male student-athletes and female student-athletes, which is entirely what Title IX was designed to avoid.”

But Title IX only applies to money handled by universities. Ishbia’s payments go directly to the athletes themselves without university involvement.

“So, the question becomes, is this a free market situation? Does it need to be mitigated through some sort of other institution?” he said.

“In athletics, there are some obvious trends where schools almost always give more money, more resources, and more opportunities to boys and men’s sports. That has been illegal for 50 years now. But it still happens, and it happens in a big way,” said Sherry Boschert, author of “37 Words: Title IX and Fifty Years of Fighting Sex Discrimination,” coming out next March.

Third parties have tried to fund men’s collegiate sports outside of the scope of Title IX since its inception. One classic example is booster clubs. Booster clubs were challenged under Title IX for raising money for specific men’s sports teams. The result? Courts said money raised by boosters had to be split evenly between men’s and women’s teams because the university was involved in doling it out.

While NIL seems to sidestep university involvement, Boschert isn’t convinced it’s possible to separate the university from player stipends.

“I am skeptical that if third parties are paying students Name, Image, and Likeness, men’s athletic departments will be able to completely ignore that, completely disassociate themselves from that,” she told TMN.

“If the donor who’s paying has any contact with the university, you could say the university approved it, or the university knew about it.”

And NIL payments could easily slip into recruitment practices. If recruiters mentioned the stipends to players, even accidentally, they’ve violated Title IX.

Does this mean Ishbia’s enthusiasm for Spartan sports is putting UWM in potential legal hazard? Will advocates for women’s equity take note of his company’s gender-specific policy? The future is uncertain.

“There is no right answer on this right now. What I can say is the NCAA had literal decades to try to figure this out and instead decided to abdicate the responsibility because they fought the entire concept of outside payment to students rather than thinking about how to roll this out in the most equitable way possible, and of course now here we are,” Chung said.

“We’re in the Wild West, and we’re not quite sure what’s going to happen and what the long-term effects will be.”