Walk the red carpet at the College Football Hall of Fame in June 2022 and you’ll discover an event that might have been unthinkable 12 months ago: The NIL Summit. The three-day event featured awards recognizing athletes not only for their competitive accomplishments, but also for their marketability and commercial success in the new era of college sports.
On July 1, 2021, the economy changed forever when almost half a million college athletes became overnight eligible to monetize their name, image and likeness (NIL). For better or worse, college sports are a uniquely American institution, and that makes it difficult, if not impossible, to separate the NIL from the numerous issues surrounding the NCAA. In fact, because the undertaking is so vast, NIL’s tentacles have intertwined and amplified things. While sources agree that the NIL is a positive in and of itself, the way it has been established has a college athletics source, who told Sports Illustrated on the eve of its initial distribution that “it’s going to be a cluster of —-,” prescient.
The NIL isn’t going away, and Sports Illustrated talked to a wide variety of people from athletes to lawyers to school administrators — and plenty in between — to get a sense of what it’s been like to navigate this radically evolving market.
The more you delve into the landscape, the clearer it becomes that there are actually two worlds of name, image and likeness. The Atlanta Hall of Fame exhibited this: a celebration of a new era as it was largely envisioned. Then there’s the fast-expanding space that fueled the recent spat between Jimbo Fisher and Nick Saban in particular: bullpen-funded collectives moving for recruiting incentives and pay-to-play.
Ohio State football players were among those who took advantage of the NIL rules early by signing autographs. The school says its athletes have signed more than 1,000 deals.
Barbara J. Perenic/The Columbus Dispatch/USA TODAY Network
The battle over collectives—and enforcement
Florida-based attorney Darren Heitner works with the NIL in a variety of ways, including representing athletes, helping Florida lawmakers draft the state’s initial NIL law, and working with University of Florida groups. The collectives have grabbed the headlines through their direct sponsorships and large sums of money, and come to define what NIL is to the public through understanding, because football drives the bus in college sports.
In retrospect, it’s easy to see how collectives acting as an across-the-board extension of the under-the-table recruiting lure market that’s always existed for college football and men’s basketball would be a natural progression, but even Heitner admits he didn’t expect so much focus and attention on the collegiate side of the NIL. Read also : 2022 Prime Day travel deals: save on luggage, headphones and more.
“If you’re a school that doesn’t have a collective—obviously not [officially] affiliated or connected—but whose mission is to directly promote and benefit a particular school, are you behind the curve? And the answer is yes,” says Heitner. “And I don’t know that I would have definitely expected that on July 1.”
The path of least resistance has always been to allow third parties to pay players, but when states and the NCAA cut schools out of the equation to the extent they did, a vacuum was created — and nature abhors that.
The NIL has further exposed how little control the NCAA currently has over college sports, or at least how much it wants to reveal. Why the governing body didn’t establish anything approaching strict guidelines before the NIL era began comes down to the fact that the organization is being sued left and right, reportedly spending just over $300 million in outside legal fees over the past seven years. In many ways, the current mess with the NIL is the NCAA cutting what has been sewn up by over a century of inaction; specifically, the recent failure to be proactive about where college sports is headed. The NCAA was content to fight instead of maintaining the definition of amateur.
The organization enacted an interim policy on the eve of NIL’s introduction, leaving schools on the hook to either navigate their state’s legislation or develop their own institutional policies. The NCAA’s interim policy has not been updated since its implementation on June 30, 2021. More than half of the states in the union had NIL laws in place on July 1, but now many early adopters are experiencing buyer’s remorse.
Mississippi, Tennessee, Illinois and Louisiana have already made their changes. The main concern was that many laws limited in one way or another how much athletic departments could bring in. South Carolina suspended the law in March, and Connecticut introduced new legislation updating the law. Every state prohibited athletes from using school colors, insignia or logos for transactions. Many state laws prohibit colleges from paying benefits to athletes.
When introducing his state’s revised bill on the floor of the statehouse, Representative John Stefanski of Louisiana was clear:
“If we want LSU or any of our universities to be able to compete [in recruiting] with Texas A&M and Alabama and see Nick Saban upset on the sidelines on a regular basis, we have to be competitive,” he said. .
Alabama has gone a step further, repealing its own law entirely in February, largely because it was more restrictive than the NCAA’s meager NIL policy, which doesn’t actually prohibit schools from facilitating trades.
Meanwhile, the NCAA turned to Congress to bail it out through state legislation. But college sports officials say Congress won’t come up with a solution anytime soon as the U.S. faces issues ranging from gun control to inflation to the Supreme Court overturning Roe v. Wade in a midterm election year. Florida, meanwhile, will have to wait until the next legislative session to change its law, having missed an opportunity this spring.
Teams will certainly not disappear in the eternal off-field competition, which has a direct impact on on-site products. “Now it’s like a battle between them because they can be engaged not under the table,” says one SEC employee. employee “They poke each other in the chest. These are millionaires trying to show other millionaires who has the biggest d—.
There are currently more than 100 collectives, with many of the Power 5 programs having one already developed or in the process of being developed, and some groups of five schools are also involved. Schools interact with them to varying degrees. The loudest collectives right now have something in common: the football program has a history of success that’s a little too distant for their tastes. Think Miami, Texas A&M, Tennessee, USC and Texas to name a few. But not all collectives play the recruitment-incentive game.
In this way, the NIL and its collective infrastructure have fueled an ever-bubbling issue in college football: Should some or all FBS schools secede from the rest of college sports to establish their own rules and, most importantly, make more money? This debate is in addition to the hand-wringing the transfer portal has received as NIL deals are used to entice player movement. If there is a need to regulate the space, the most likely way would be to restrict collectives that operate with recruitment incentives.
But instead of any significant crackdown on the NIL, the NCAA took a hit in May, opting instead to simply reword the rules effectively, reminding schools what they have. Who wants fulfillment? Some people collectively and on the school side do this, but with a purpose – not just to enforce a byzantine rule book for the sake of it, but to help create guardrails and guidelines for the industry. The NCAA is investigating Miami’s collective action, at least initially, and it remains to be seen if the Hurricanes are finally driven to the wall. The enforcement drive is the key factor that determines the NIL in year 2 and beyond.
“I think it’s disappointing right now, but it’s understandable that the NCAA, as well as the coaches you’ve seen taking their thoughts to Congress, have all approached this by trying to delineate what shouldn’t be done and what can’t be done. What needs to be avoided. That generally refers to recruiting ,” says Adam Fleischer of the Illini Guardians in Illinois. “So while everyone is rushing to reach a consensus on what’s not allowed, there’s very little guidance on what NIL can be and what it should be and what its potential is.”
Clapper, a Florida gymnast, created a gymnastics board game that he now sells online.
Brad McClenny/The Gainesville Sun/USA TODAY Network
The agent question
What redeems college sports when it goes through one legislative crisis or another is always the athletes, and the NIL has solved the problem by simply allowing them to be paid. This may interest you : Prime Day 2022: Best Video Game Deals.
In addition to money, there is a very real workplace education component that cannot be replicated in the classroom. Duke cross country runner Emily Cole has more than 160,000 followers on TikTok and 57,000 followers on Instagram. But notoriety comes with lessons other than balancing school, exercise, and content creation. He is now much more careful about posting his location on his Instagram story in real time, is aware of his personal safety and asks permission from teammates who may be in the photo he posts.
Cole’s older sister, Julia, is a country music artist who had been telling him to get on social media for years. Before NIL was even on his radar, Cole began working on his brand and was able to seize the moment in July 2021. At first, he went through NIL’s online marketplace to make deals, the easiest way for athletes to connect with brands. Marketplaces are the go-between that connects as many athletes with as many brands as they sign up to start a conversation that hopefully leads to a deal. Some marketplaces charge a small membership fee to either companies or athletes, and marketplaces question their reputations by vetting the companies themselves.
Others did it themselves, taking the bull by the horns and becoming entrepreneurs. Take Rayquan Smith, a Norfolk State track athlete and “King of the NIL,” who estimates he’s signed more than 70 contracts.
“As a small school, you have to work a little harder because you don’t have the same opportunities as larger schools to show people that you can get offers from the NIL at a small school,” Smith says.
Florida gymnast Leah Clapper had, in some ways, been training for the NIL era throughout high school, even though she didn’t realize it. He had always wanted to start his own business and this gave him the best opportunity to take advantage. At the height of the pandemic, he created a gymnastics board game and an accompanying e-store to sell it and an LLC to keep the proceeds.
There are countless NIL success stories that any proponent of the system can point to as success. Just like in any industry, some people take it upon themselves to be proactive in order to get what they want, while others may need help. Some schools make sure to help their athletes navigate the system, and several athletes say it’s generally a hot topic in locker rooms. What athletic departments do to help their athletes can vary from school to school.
“I wish other athletes could talk to me about their experiences,” Clapper says. “I had it with my teammates and we had great discussions, but it can feel a bit taboo to talk about NIL with teammates who don’t use the same opportunities. It’s like, ‘I don’t know what your goals are, you don’t know what my goals, it’s a weird thing.” Oh, you don’t make money with these posts? You do it for free and I make money?” This can feel a little weird, especially if you don’t want to hurt anyone’s feelings or do them alone.
Two female athletes from an Illinois school say their schools haven’t really given them the resources to manage NIL and related matters, including taxes and financial literacy. A recently released NCAA survey of nearly 10,000 athletes across all three divisions found that 49% of athletes needed resources on these topics and 40% needed help navigating the NIL. As you might expect, well-equipped schools do well. Ohio State announced in January that it would assign one athletics department employee to each of its 36 sports as the points of contact for those athletes. But not all of the NCAA’s 1,100 member schools are adequately resourced—in fact, the vast majority are not. So where do these athletes turn?
Clapper is trying to answer that question by starting a community for college athletes called NIL Island, which originally started as a Discord server.
“I feel like I’ve gone through all the NIL markets, I’ve understood how to read a contract and negotiate deals,” Clapper says. “I’ve done so much research it’s ridiculous, but I wouldn’t want every athlete to go through this timely process. So I think bringing athletes together and helping each other is really valuable.
Talking to a coach may seem natural, but it can put both them and their athlete in a position where they have to figure out if they can even have the conversation based on state law or institutional policy.
“They’re basically telling us as coaches not to do anything,” says the 5th grade track and field coach. “I understand that, because what is our job? Everything. At the same time, who will this child ask first? Probably still me. They don’t see fulfillment every day.”
Some athletes have parents to help them take the reins, and some are lucky enough to have a family connection to a lawyer. If not, the world of agents and representation in college athletics can quickly become murky.
“There are a lot of students who act as agents on behalf of their friends and classmates,” says Kristi Dosh, a former corporate attorney now in the sports business. “I feel like there are a couple who know what they’re doing, and some of them are somewhat terrible. Because they can, there’s no one to say they can’t if they’re in a state that doesn’t have any agency laws or registration — or certification processes, and they’re working with a gymnast who doesn’t have a certifying professional organization like you have in the NFL.”
The agent component is behind the NIL fiasco involving Miami quarterback Jaden Rashada. A 19-year-old SMU college student named Jackson Zager allegedly brokered Rashada’s endorsement deals, and that job is now in limbo after a California attorney who apparently also represents Rashada, Michael Caspino, sent him a cease-and-desist letter. The saga also involves Heitner and the University of Florida Collective, to whom he has provided legal counsel after the Gators lost Rashada’s commitment, and Caspino alleging that the Gator Collective offered the QB “a lot of money.”
Pro leagues have an agent certification process for professionals, but there has always been a visible relationship between college sports and agents thanks to old rules that revoked a player’s amateur status if they hired one. The NIL allows players to be represented by an agent in a marketing deal, and high-profile players who sign with high-profile agencies are always on the rise, but not all contracts are. Athletes, like many non-lawyers, do not understand contracts, and players dealing with complex contracts can be difficult for athletes and their families. There is no standard contract language because each brand has its own.
The agent room is another one that cries out for some kind of federal law or NCAA rules, but the momentum on that issue seems to have died down. Almost every state has some sort of agent certification process, usually overseen by the secretary of state or attorney general. Some states have their own standards and regulatory responsibilities for certified agents, but do they all?
“I went through [government agency policy] right at the start of NIL; some of them are quite vague and some of them only review applications once a year,” says Dosh.
It’s hard to see which entity (NCAA, conferences, or pro leagues) even wants to take responsibility for not only legislating agents, but ongoing oversight. That’s why Dosh hopes the agent space will remain the Wild West of the Wild West for athletes who don’t have the arm of Emily Cole, whose agent found her after winning a TikTok contest.
One attorney who spoke to SI proposed a model where schools could have an insurance company send athletes to review the paperwork, but that runs counter to schools being comfortable facilitating such a thing and running afoul of the “causing compensation” clause. in their state legislation.
“You can’t pack everything into an hour-long lecture about doing taxes and reading contracts and managing your time and building your brand,” says Florida lawyer and former gymnast Morgan Frazier. “These athletes need to have ongoing education. I believe what should happen is that there should be a lesson that is now mandatory for athletes and administered by the university in their freshman year. Familiarize them. It’s our state law and it’s our school policy.
Entering Year 2, the central question is whether or not the NCAA can and will do anything to enforce its NIL guidelines.
“I’m not gonna post your stuff if I don’t like your stuff”
While it’s obvious what the players have gotten out of NIL, what about the brands? Here we find the way NIL was adopted at a very interesting time. This generation of athletes is tuned into social media and brands want to use it to their advantage. See the article : Sandra Bullock, Justin Bieber and Other Stars Lost Money on Real Estate in a Booming Market. That’s why you have to walk past the flower wall backdrop, Instagram photo booth and 360-degree rotating selfie station that LSU coach Brian Kelly made famous on social media in January to get into the Hall of Fame at the Summit.
NIL may be very new, but social media influencer marketing doesn’t exactly have ancient beginnings. In fact, it’s only really been a big market since the middle of the last decade (note that TikTok didn’t exist in the US until 2018). Thus, NIL is an emerging market that has been absorbed into an even larger and only slightly older market.
That’s why Frazier says the NIL would have looked a lot different for him even when he was in college from 2013-16, when he had to turn down a Chipotle gift card he was given for hosting a campus competition. “You saw a couple of these brand deals, but there was no creator economy,” Frazier says. “When I was a college athlete, it wasn’t like that. I think it would have been more like getting a free sandwich or a free salad or wherever in Gainesville.
Just as the states that passed the original laws pushed back, some brands that were early in the NIL game found that caution may have been a slightly better strategy. Heitner says that in his experience, brands are familiar with the concept of NIL and how it works functionally in general, but are still figuring out their specific strategy to actively jump into the space.
“I talked to a couple of brands that were the first ones out there [when the NIL started], and their number one complaint or regret is that they didn’t know the kids’ personalities when they signed them,” Frazier says. “They just looked at the number of followers and didn’t dive deep into who the athlete is as a person. And they were disappointed in some of the numbers because they weren’t getting the ROI they thought these athletes just weren’t communicating well.
Not every athlete who is on social media is good at it; some have to be taught. It comes naturally to others, like Smith, a Norfolk State athlete, who says he doesn’t have a complicated social media strategy. He’s just posting like always, but now he’s making money for it.
“Different people look at me like, ‘Is he posting because he wants to post, or is he posting because he wants money?'” says Smith. “Is she posting because she likes their product?” People have different views on this. I’m posting because I love their product. I won’t post your stuff if I don’t like your stuff. I reject things if I don’t like your product. If it doesn’t suit me, I won’t do anything because they want me to.
Athletes present a unique opportunity for brands as an influencer audience can not only connect with, but actually implement. This is the next evolution of why using athletes as on-field personas is a tried and true marketing strategy. Athletes provide high engagement rates, allowing brands—especially national ones—to gain hyperlocal appeal, especially in small college towns. And it’s not even just the All-Americans that are the focus of the brands, because you don’t necessarily have to be a great athlete to get a big following. UCLA QB Chase Griffin, who won NIL Summit Male Athlete of the Year, has thrown just 62 passes and started four games in his three-year college career.
The vast majority of transactions tracked by NIL technology company Opendors involve social media posting. It found that up to May 2022, almost 68% of all transactions involved posting content, accounting for 34% of all zero compensation. Football, men’s basketball and baseball account for the lion’s share of NIL activity, but it’s probably impossible to get an idea of the total volume of future transactions.
There is no NCAA clearinghouse to track transactions and no reporting requirements to the NCAA. Ohio State alone claims its athletes had 1,000 inked by June 2022. Some athletes themselves don’t even know how many contracts they’ve signed; For example, Cole says he’s not sure.
As Jason Bergman, CEO of Marketpryce Marketplace, describes it: “It’s kind of like how many marriages has Tinder led to?” He didn’t even begin to try to put a number on it, saying only how many conversations were initiated between the athletes and companies he serves. According to him, the good result is that athletes and companies leave the market platform to transact. And Marketpryce isn’t in the game for six-figure deals—instead, it might be for three- and four-figure deals, or just products like a protein bar, for example.
“You talk to every market person, obviously we give the athletes their disclosure forms that they can download and send to the university, but does every student-athlete disclose that to their compliance departments?” asks Bergman. “Does every compliance department say you have to disclose it when you see it? That’s tough, that’s probably the part we have to figure out.
Kentucky AD Mitch Barnhart, left, and coach John Calipari shake hands after special testimony on Senate Bill 6, the State Name, Image and Likeness Act, in February.
Sam Upshaw Jr./Courier Journal/USA TODAY Network
An uncertain future
It’s hard to even call NIL a real market at this point. There’s no publicly or privately available place to track the trades, and even industry insiders are curious about that aspect, like a Big 12 football coach who asked SI, “What’s going to happen to Jordan Addison?” while the former Pitt wideout was in the midst of transferring and wildly increasing the numbers for what USC or Texas offered.
In this void, rumors about player earnings run wild and can quickly inflate the bill. If the NIL is thought to be out of control, the game of telephone that has forever pushed dollar amounts for under-the-table recruiting will only continue in this more legal era with more money.
Triple-digit offers and freebies are one thing, but there’s sticker shock when, for example, it was originally reported that Rashada received offers in any amount up to $11 million. It sucks much of the oxygen in the public-facing NIL space and functionally defines for many people – including the athletes themselves – what the name, image and likeness really is.
“What’s your college experience like and what’s your collegiate amateur like?” Fleischer says. “If you believe it’s just a stepping stone for professionals, then you see NIL and the NIL world as a much more commercial endeavor. But if you look at it and say that kids come to university to get an education, to be part of a community and to understand how to interact with the world around them, NIL has a very different take on that. . It’s much more of a teaching mechanism and community opportunity intertwined with commercial benefit.
While athletic feats don’t necessarily translate to zero success, we haven’t seen whether teams or brands’ appetite for big-money deals persists a few years down the road. The question many people in the industry have is what happens if the athlete you paid six figures for doesn’t turn out to be very good? Or what if they transfer? A $100,000 deal is a lot different than a free pair of shoes.
Poor performance hasn’t stopped the coaching arms race in college football, but boosters heading into coaching hires have a mechanism to get around the problem by buying the coach out of the remainder of his contract. An investment in a collective or outright player that doesn’t pay off can become a sunk cost, especially as Ohio State’s Ryan Day acknowledges the $13 million price tag of maintaining a championship-caliber roster. It will be interesting to watch how this part of the company pans out as we are likely heading into some turbulent times for the US economy.
Athletic departments also have other concerns regarding donations to teams and athletes providing donations or sponsorships to schools. Tom McMillen, president and CEO of Lead1, an athletic department lobbying group, says 70% of the ADs he works with are concerned about some kind of shift, whether it’s sponsorships or donations. For the most affluent schools, it’s almost exclusively about athletic department control, but for the rest of the athletic departments, it’s a legitimate concern about funding things. The economics of college sports have changed forever, and it all happened right, as it looks like the country may be headed for a market correction, if not an outright recession. So what about donations? What happens to the marketing budgets of brands that usually become one of the first things? What happens to startups that jump into the NIL space?
“[Startups] could easily raise money in the recent past by just pushing investors away left and right, and now they’re begging people for capital as they burn through their money,” Heitner says. “And I think a lot of these startups, one, spent a lot on marketing, zero and outside of that. And then even two, I think there are a lot of startups in the NIL space that will struggle to survive in the next year to two years. Some of the service providers that try to bring athletes together are not profitable and spend money at a very high rate. I think the wider economy has absolutely no impact on sport, zero to be exact.”
There’s no telling where the name, picture and likeness will be by the time the second annual NIL Summit rolls around. It’s worth repeating – this thing is still a year away. It seems like every day one school or another announces a new NIL update to try to stay ahead or at least ahead of the curve.
Amateurism as we knew it in college sports began in the early 20th century, and one year after its official end, where the industry will go next is far from clear. The NIL may have opened up an opportunity to observe one wholesale change, but there is a history of not much changing quickly in college sports, even though the landscape of the NIL seems to be changing more and more by the day. What is clear is that NIL will continue to evolve in many ways that we cannot predict.
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He has signed a multi-million dollar shoe deal with Puma, the first of its kind for a high school athlete, and a marketing deal with Excel Sports Management to pursue sponsorships and other opportunities to monetize his name, reputation and likenesses (NIL). .
Can you get nil deals in high school?
Nine states allow high school NILs: Alaska, California, Colorado, Kansas, Louisiana, Nebraska, New Jersey, New York, and Utah.
How does the nil rule work?
NIL has the ability for college athletes to monetize their “name, image and likeness.” It was launched last July after the Supreme Court handed the NCAA a landslide defeat. The NCAA has long argued that as recreational athletes, players cannot make money from things like jersey sales and autographs.
Is nil legal in all states?
Currently, six of them (California, Florida, Colorado, Nebraska, New Jersey, and Michigan) have passed NIL legislation at the state level.
Which States Have the Best Zero Laws? Of the 28 states with NIL laws, New Mexico earned NCPA’s highest rating of 90 percent. The lowest at 43 percent was shared by three: Alabama, Illinois and Mississippi. Maryland earned the highest mark (81 percent) among the 11 states that are home to the Big Ten’s 14 schools.
What states allow nil for college athletes?
To ensure that student-athletes’ endorsement agreements do not conflict, nearly every state’s NIL laws require athletes to disclose the agreements to the school. Of the 29 states that have passed NIL rules, only Arizona and New Mexico do not include disclosure requirements.
Are nil deals legal?
Heitner Legal concluded that California is currently the only state that clearly allows NIL opportunities for high school athletes. According to the California Interscholastic Federation, California high school athletes can benefit from their NIL as long as they don’t use their high school name or grades.
Do all states allow nil?
As of mid-February, 39 states have passed, are currently/have proposed, or plan to propose noncompliant legislation. Currently, six of them (California, Florida, Colorado, Nebraska, New Jersey, and Michigan) have passed NIL legislation at the state level.
What are nil deals worth?
College football recruits sign NIL deals ranging from $500,000 to more than $1 million, according to contracts reviewed by The Athletic. The Athletic reviewed three recent name, image and likeness deals, each featuring a different school team.
