For years, the pressure has been on the NCAA to allow athletes to be financially compensated for their dedication, hard work, success, & profitability for their schools & the NCAA itself. For some time, it seemed the NCAA would never budge. According to Forbes, some of the top NCAA Division 1 schools generate about $8.5 billion in annual revenue. 58% of that comes from football & men's basketball alone. Yet, the athletes earning that money weren't even allowed to profit off of a YouTube channel using their NIL (name, image & likeness), even if the channel had nothing to do with sports or the NCAA!
The argument of the actual colleges paying their athletes is very nuanced. There are pros & cons to that system & people have many different opinions on the matter. However, allowing NIL deals seems like a no-brainer & there's no good reason it should have taken this long.
What Is NIL?
NIL stands for Name, Image, & Likeness. In this case, it represents that of student athletes. Before, athletes couldn't receive compensation for the use of their names, image, or likeness without risking their eligibility to play. We've seen so many players get caught up with this ridiculous rule.
Notably, Terrelle Pryor & his teammates at Ohio State who sold some of their memorabilia off to make some money. Their statistics, wins, & records have all been wiped from the books due to this, & as of now won't be coming back any time soon.
Reggie Bush had to return his Heisman Trophy & had his achievements erased from the NCAA's books as well because he received $300,000 in gifts throughout his time at USC. Had NIL deals been allowed, Reggie would have never even needed "gifts.” His achievements & Heisman don't look like they'll be coming back either.
Former UCF kicker Donald De La Haye Jr. had a profitable YouTube account, & the NCAA banned him from being eligible to play. I can go on for days with examples, unfortunately.
Thankfully, as of July 1st, student athletes of the NCAA are now allowed to be compensated off their names, image, & likeness. It's about damn time.
I gave it a month to see how everything would play out, & based on what I've seen so far.. Here's everything you'll need to know about NIL deals & how it can re-shape college athletics
As soon as July 1st came around, college athletes were signing deals left & right. Some have signed some pretty lucrative & creative deals. University of Miami QB D'eriq King started a website to sell his merchandise & autographs. Along with that, King partnered with FSU QB McKenzie Milton on a business which will schedule bookings, speaking appearances & autograph signings for student athletes. Their goal is to get more athletes compensated for their likeness & also expand into digital sports trading cards for college athletes. This is one of the more creative ideas I've seen from college athletes thus far.
Hercy Miller, son of Master P, signed a 4 year, $2 million deal & his college career hasn't even begun yet. I'll get into this later, but take note of the fact that he's going to bring in $2 million at HBCU Tennessee State. Master P also made a fantastic point when discussing NIL:
This is gonna change the way college athletes want to stay in schoolMaster P
He's right. There's now an incentive to stay in school, especially for players who are college superstars but unsure of potential at the next level. It makes sense to make as much money as you can before taking that risk in that case.
This is also motivating athletes to start school early as well. The top high school QB recruit in the country, Quinn Ewers, is skipping his senior year of high school to get to Ohio State ASAP. People are saying he could potentially sign NIL deals worth 7 figures.
Alabama QB Bryce Young, who hasn't started a college game yet, has already been offered over $1 Million in NIL deals. Talk about pressure! On the surface, it's easy to think the schools like Bama, Ohio State, & Clemson will be the big beneficiaries of this new rule, but I have reason to believe otherwise.
Closing The Gap
The new NIL rules won't boost the Blue Bloods even further ahead of their competition, but will actually give the competition a better chance at competing. The Blue Bloods had everything going for them. Most are in great media markets, with all the resources, the big stadiums, elite facilities & equipment, passionate fanbases & everything else they need to recruit the best talent in the country. Now, the schools with fewer resources have a chance to land guys or gals who want to stand out with hopes it'll make them more profitable than a school with 15 star players all inking endorsement deals. Fewer people to share that local business money with.
Even if I'm wrong, college football (one of the two biggest revenue earning college sports) barely has any competition anyways. It's the same few teams actually contending for the championship each year, so how much worse can it get anyway? Smaller/less popular schools who get creative will find ways to make this a recruiting angle that they did not have before.
The new NIL rules allow more businesses into the game of NCAA sponsorship. Before sponsoring players, businesses had limited options (TV commercials, team uniform sponsorships, etc). Due to this, only the biggest brands were able to get their feet in the door. The competition was so high.
Now, smaller businesses have entered the chat.
More money will be spread across more campuses, & like I said, creative staffs will use this to their advantage when it comes to recruiting.
On the surface, yeah, the best of the best will probably go to Bama & other prestigious universities based on their sports because their presumed profitability will be higher there. However, now the smaller businesses can play too. Alabama University doesn't have their own TV deal.. the SEC does. Bama will be on National TV more times than not throughout the season, but the SEC is gonna get Ole Miss, South Carolina, etc on TV as well. Plus, Bama has to play these teams on National TV too. Now, the smaller businesses have a way to advertise during these games that wasn't possible before, via player endorsements.
If I'm a small business, I'm doing business with some of these smaller/less prestigious schools. I'd have the coaches offer my endorsements to its potential recruits (in whatever words make it fall within the NCAA's regulations). This will prove to be an advantage for these schools. The more businesses a school does business with, the more money to be shared amongst the players who come.
There's already an example of this, with more to come! Dan Lambert, a man who owns a prominent chain of MMA gyms, created a company called Bring Back The U. Lambert, a huge Miami Hurricanes football fan, started this company as a way to create NIL opportunities for football players at The U. The company will raise funds & then donate them to any local businesses who want to sign deals with Hurricane players. I know this isn't a small school but they've been struggling lately, compared to their history. This is literally going to help resurrect Miami's football program, I bet you. Don't be surprised if more schools have similar programs very soon.
“I am familiar with the hard work and dedication it takes to become a college athlete. I am also very much aware of the fact that there is no guarantee of future rewards for choosing this path. That is why I have joined Bring Back the U to help build relationships between local businesses and UM players that will allow both to prosper. Let’s come together as a city and a community and together we will BRING BACK THE U!!”Kendrick Norton, VP of Community Outreach for Bring Back The U
Impact On Smaller Schools
The smaller businesses won't be targeting Ohio State for football & Michigan for basketball.. they still can't compete with those price tags. Being the star player at a smaller school can be very fruitful.
For example, Boost Mobile signed twin basketball players Hanna & Haley Cavinder. They play at Fresno State, & Boost Mobile stated that they were targeting female athletes who were NOT top prospects. They're stars at Fresno, but being such a small school, being top WNBA prospects wasn't in the cards for them.. but Boost Mobile's money was.
A black owned hair product shop struck a deal with Jackson State's Antwan Owens. They specifically wanted an HBCU athlete. I'm sure we'll see many more examples like this one. We've already seen Hercy Miller's $2 million deal as an HBCU athlete.
Local businesses will be offering players at the schools near them, regardless if it's a big school or not. In general, the new NIL rules provide a recruiting advantage to every school with fewer resources than the big guys. There's incentive to go anywhere you want, because you can get paid on any campus. You just have to show up & ball out.
The bigger schools who were already paying their top recruits anyways (shhh) don't have that same advantage.
This evens the playing field.
Watch our most recent episode of Russo's Playbook for more on this discussion. Hunter & I argued about whether or not this would help close the gap in College Football. Make sure to subscribe & turn our post notifications on while you're there as we'll be attacking this issue again, along with others, later in the week.
Social media is going to be a huge factor when it comes to athletes getting deals. I mentioned the Cavinder twins from Fresno State. The reason they were a target for Boost Mobile is because they have 3.3 million Tik Tok followers.
Dan Lambert, the man who created Bring Back The U, offered every Miami Hurricane football player $500 per month to promote his chain of gyms on social medias.
The digital footprint of the teams' social media accounts will be another huge factor for athletes striking deals. In this case, the Blue Bloods have the advantage.. for now. If you pay attention to college football, you probably saw LSU's social media success during their undefeated championship season. Their graphics were just on another level & it resulted in amazing social media growth.
No other school was close. This would be an advantage for LSU now with these new rules. Also, USC hired a few of LSU's digital video people after that, proving that other schools can get in on the action. Social Media accounts are now very very important for every school's athletic programs.
A Team's social media platform's success is directly related to it's players' earning potential. Having a fire social media game is now a talking point when recruiting top athletes. Even smaller schools can compete with that, they just need to make social media a focus. Student athletes' social media success also holds the same weight when it comes to earning potential.
Regulations & Monitoring
Some states have regulations in place, some don't. Athletes need to be careful when choosing endorsement deals & make sure that the company they are signing with aligns with their state's regulations, or they'll risk their eligibility.
Some schools have already come out with specific rules & regulations when it comes to NIL deals for their student athletes. These can become advantages & disadvantages as well when it comes to this new style of recruiting which will be taking place.
For example, the University of Arkansas has decided that they won't allow their student athletes to use their logo or colors in their NIL endeavors. Meanwhile, LSU is allowing their athletes to use the logo & colors as they please. Obviously, throwing your school's logo & colors on helps with personal brand awareness which will lead to being more profitable.
Clemson WR Justyn Ross signed a deal with The Players Trunk which is helping him create his own merch. As you see below, he released some gear which shows him in his Clemson uniform. Clemson has stated it's athletes were not allowed to use it's logo for NIL ventures. So, that's a potential problem.
I wouldn't be surprised to see schools move to hiring a new position to the staff focused solely on managing NIL contracts & ensuring that everything goes as smoothly as possible.
There will surely be more companies like King & Milton's focused on leveraging & mediating relationships between student athletes & brands.
How Will This Effect The Locker Rooms?
This one is a wild card. It really depends on leadership, coaching, & camaraderie.
I believe there is potential for locker rooms to get a little spicy if a team lacks leadership. Think about it.. 11 players need to do their job every play in a game of football. 11 players doing their job, but only 6 of them being paid for it. I foresee some issues arising in some cases due to that. However, teams with strong leadership & focus will be just fine.
Speaking of focus, what are student athletes going to be most focused on now? Will it still be winning games, or will it be racking up stats to hopefully lead to a better endorsement? Are they going to be worried about the money, not focused on the preparation? Will their speaking events, video shoots, business meetings, etc get in the way of their duty & responsibilities as student athletes, whether on the court or in the classroom?
I guess it depends on the athlete & the culture of any given locker room. I'd like to think most will be able to handle it well, & it's definitely good preparation for the next level & the real world after college in general. However, these are valid concerns & possibilities that should definitely be considered.
Will The NCAA Get A Federal NIL Law?
The NCAA is pushing for a federal NIL law. They want to be able to regulate what kind of deals the student athletes are able to do, and make sure they still have control over these players & schools. They've asked congress to help create the law. The NCAA definitely wants to avoid boosters from attempting to influence a school's recruiting power, but they'll likely need a detailed federal NIL law in order to do so.
As of right now, the guidelines are very new & very loose. There's definitely a ton of gray area that can be simplified & made more specific. However, I kind of like the idea of each state doing their own thing. It makes the recruiting aspect of this more exciting, knowing that some states have different rules, which could result in an advantage or disadvantage with recruitment.
Don't think for a second that this will only apply to Division 1 athletes. The money might be significantly less, but D2 & D3 athletes will surely be cashing in as well.
Also, every player who ever got anything taken away from them or erased from the record books due to NIL violations should get all of their accolades back along with a formal apology from the NCAA. Not because they didn't break the rules, but because the rules were stupid, as we discussed in this episode of I Got Next.
Since you liked reading about the business behind college sports, you'll surely enjoy our podcast I Got Next, where we discuss the culture & business side of the sports world. Every Monday night live @ 9PM Eastern Time on the YouTube given above.
Also, check out Russo's Playbook. We cover a bunch of sports every week & keep you up to date with important news from the sports world.