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NIL: College Football Players Are Signing $1 Million Deals
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Hey Friends,
The name, image, and likeness (NIL) market has quickly evolved. When the new rules were first introduced last summer, we saw a flurry of deals almost immediately.
Fresno State twin basketball players (& Tik-Tok stars) Haley & Hanna Cavinder announced a six-figure endorsement deal with Boost Mobile in Times Square. University of Miami players D'Eriq King & Bubba Bolden signed a $20,000 deal with a moving company in Florida. And Clemson Offensive Lineman Matt Bockhorst signed a sponsorship deal with Gopuff, a delivery service for food and drinks.
We were off to the races, and everyone, including the NCAA, seemed comfortable with how the process was unfolding — student-athletes were *finally* able to monetize their name, image, and likeness. Hooray!
But a seismic shift has quietly been building for the last 6+ months, and it feels like the waters surrounding name, image, and likeness have become much murkier.
Stewart Mandel released a piece for The Athletic yesterday that I think does an excellent job describing the current state of NIL at high-level athletic programs.
You can read the entire piece here, but I’ll do my best to summarize the key points below.
The gist of the article is that name, image, and likeness might have initially been about enabling college student-athletes to monetize their IP, but it has quickly shifted to something much larger, especially when it comes to Power 5 football programs.
“The Athletic reviewed three recruits’ recently signed NIL contracts, each with a different school-specific collective. The Athletic agreed to preserve the anonymity of all parties in order to get a better sense of the current market rates for top recruits. A four-star receiver landed a deal that will pay him more than $1 million over the next four years in exchange for his exclusive NIL rights. A defensive lineman ranked among the top 10 at his position received a three-year deal worth $1 million. And a three-star defensive lineman signed for $500,000 over four years. The latter two are non-exclusive.”
And it’s especially interesting when you consider this recent quote by Alabama’s Nick Saban, one of the most powerful recruiters in all of college football.
"I don't think what we're doing right now [with NIL] is a sustainable model. The concept of name, image, and likeness was for players to be able to use their name, image, and likeness to create opportunities for themselves. That's what it was. But that creates a situation where you can basically buy players. You can do it in recruiting. I mean, if that's what we want college football to be, I don't know. And you can also get players to get in the transfer portal to see if they can get more someplace else than they can get at your place,” Saban told the Associated Press.
So the theme of the story is this — NIL has created an “arms race” of competition between schools for high-level football recruits. As a result, many schools have set up third-party collectives, which act as vehicles to funnel money from boosters and fans into the hands and bank accounts of student-athletes at their respective schools.
But this has turned recruiting into somewhat of a shitshow. The fragmentation of the market—some schools have third-party collectives & others don’t—has created a cloudy situation where recruits are now free agents 100% of the time, even after national signing day.
Six-to-seven-figure bidding wars are becoming the norm. And that’s without mentioning that there are already more than 3,600 FBS players in the transfer portal, which now allows players to move schools (once) without sitting out a season.
Mandel summarized the situation perfectly in his last paragraph:
“The 2023 class could turn out to be a fascinating case study. Will the players who cashed in be less likely to transfer because they risk blowing up their deal — or perhaps more likely because they picked a school solely for financial reasons? If a lot of the top recruits become busts, will donors be less likely to pitch in going forward? Or will 2024 kids get even richer as more schools’ collectives become better funded?”
But I think the important part is that we don’t lose sight of what this change was supposed to represent. So many people have fought for more than 100 years to secure the ability for college student-athletes to profit off their name, image, and likeness.
And we know that it’s working — according to Opendorse, the average NCAA Division 1 athlete has made nearly $600 from NIL-related deals so far. Of course, the football players singing six-figure deals get all the attention, but that’s not what this is about.
This is about a college swimmer who can now give lessons to make a couple of hundred dollars during the offseason. This is about the college gymnast that can now utilize their social media following to attract brands and monetize their work.
And it doesn’t matter if they are making $1 or $1 million; the point is that they can now profit off their name, image, and likeness, as they always should have.
That’s not to say everything has been smooth sailing with NIL. It hasn’t, but I think it’s naive to claim the entire system is a failure because a few schools, boosters, and players are taking advantage of free-market principles and capitalizing financially.
Much of this will work itself out. My guess is that more firm rules get established over time, and schools manage to work around the inefficiencies. But the reality is that the positives drastically outweigh the negatives, and this is a change worth fighting for.
I hope everyone has a great day, and we’ll talk tomorrow.
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