Robinhood Markets, the popular and controversial stock-trading app company, has entered the college sports space through an arrangement with West Virginia University, in which the company is providing financial support and expert resources to expand the school’s financial literacy training for all Mountaineer scholarship athletes.
The four-year partnership, set to be publicly unveiled during a press conference today at the Big 12 school, had been in the works since last fall. Both WVU and Robinhood declined to disclose the financial terms of the company’s commitment, but Amy Pridemore, director of the university’s Center for Financial Literacy and Education, described it as “significant.”
Sen. Joe Manchin, D-W.Va., in a prepared statement provided by Robinhood, endorsed the partnership, calling it a ”milestone in the advancement of student athletics.”
Robinhood has been heavily scrutinized in the last few years. In March of 2021, the trading platform was the subject of intense Congressional grilling over the Reddit-fueled GameStop frenzy, during which Robinhood and other retail brokers temporarily restricted trading of certain “meme stocks.”
Not long after, Robinhood settled a wrongful death lawsuit filed by the family of a former University of Nebraska student, who committed suicide after his Robinhood app showed an account balance of negative $730,000. The suit claimed that the deficiency was only temporary, but that the company had failed to respond to the student’s desperate efforts to understand it. That tragedy was invoked by the Financial Industrial Regulatory Authority, when it slapped Robinhood with a $70 million fine, FINRA’s largest ever, for misleading and harming its customers.
Robinhood’s partnership with West Virginia is part of the company’s broader educational initiative, which includes free online articles and podcasts attempting to make financial and investing information easily accessible. Stating its core mission is to “democratize finance for all,” Robinhood insists it is receiving no financial considerations in return from WVU, nor is it actively trying to convert athletes into Robinhood traders.
“We are not encouraging them to download (the app),” said Chloe Barz, Robinhood’s director of external affairs & community. “The focus of our work is adding another layer to why people see Robinhood as a force for good in the world.”
Barz says the company hopes to form similar partnerships with “several” other college athletic departments by the end of the year, but declined to provide additional details.
“Professional athletes fresh out of high school and college are becoming overnight millionaires, but too many lack the financial literacy resources to manage this change in financial status,” Dan Gallagher, the company’s chief legal and compliance officer, said in a statement.
West Virginia athletic director Shane Lyons says the program “will play a key role in helping our student-athletes develop the skills necessary for success in the future.”
Robinhood is wading into a crowded pool of companies, academic institutes and other nonprofits offering to provide money-oriented guidance to the newly grossing demographic of college athletes. Many Power Five athletic departments now include an educational component to their NIL programs, which is either handled by main campus or farmed out to third-party firms like Altius or NOCAP.
Last July, West Virginia became the first athletic department client of digital agency VEEPIO Holdings, which does work with the NFL and NFL Players Association, to assist its athletes with their NIL sponsorships.
Pridemore says the WVU-Robinhood affiliation came together by “happenstance,” after she met Barz during one of the company’s university-focused “fireside” chats. Beginning last spring, Pridemore’s academic center began leading a financial literacy program for freshman athletes, which has since been tweaked.
“It was probably a little too advanced for that population, talking about compound interest and things above their heads,” said Brittney O’Dell, WVU’s associate athletics director for student-athlete development. “We revamped the course and are focusing more on bringing speakers in and making it more of a seminar-based course, where (athletes) are really interested in what they have to say.”
With Robinhood’s backing, Pridemore says she will now have the resources to expand the number of sections of her athlete-geared curriculum and bring in more high-profile guest lecturers. Several Robinhood employees, including a few who played D-I sports, have already come to WVU’s Morgantown campus to speak.
Earlier this week, West Virginia became the latest Division I program to announce it would offer scholarship athletes the additional education-related monies provided for in the Supreme Court’s NCAA v. Alston ruling. Shawne Alston, the class representative in the original antitrust lawsuit, was a Mountaineers running back from 2009 to 2012.