How the college sports’ NIL update could unleash athlete creativity
Few topics in American sport have been as contentious in recent decades as the financial compensation, or lack of it, for student-athletes.
Following a telling, unanimous Supreme Court ruling last week, which threw out limits on education-related benefits, the National Collegiate Athletic Association (NCAA) has introduced an interim set of rules that will finally allow college athletes to earn something from their performances. Specifically, they will be able to cash in on their name, image, and likeness (NIL) rights as of 1st July, with the NCAA pre-empting legislation from a succession of state governments.
Multi-billion dollar business
College sport is uniquely influential in the US, offering access to tertiary education for thousands of talented young people through scholarships and pathways to a professional career for a lucky few. At the highest level, particularly in American football and basketball programs, NCAA competition is a multi-billion business.
March Madness, the national championship competitions in men’s and women’s basketball, still draws substantial audiences for Turner Sports and ESPN despite recent downturns in linear viewing figures. An average of 16.9 million Americans watched the Baylor Bears beat the Gonzaga Bulldogs in the men’s final this year, while the Standford Cardinals’ 54-53 win over the Arizona Wildcats attracted a peak of 5.9 million viewers to ESPN.
The College Football Playoff is nearing the end of a 12-year, $5.64 billion deal with ESPN for its domestic media rights while individual college conferences have also signed ten-figure broadcast deals. Major universities also earn millions from ticket sales and sponsorship.
The rising popularity and marketability of student athletes
Student-athletes, however, have not seen any of this money until now – other than in the free tuition they receive at the school for which they compete. Increasingly, opponents of the NCAA’s policies on amateurism argue that there is a misalignment between the value of those scholarships and the revenues earned by universities through sport. They also point to the money spent on coaching and facilities and ask whether a closed economic system for sports would be a better option.
Most controversial of all has been the way in which student-athletes have been prevented from receiving any income through endorsements, and have risked losing their eligibility for even small payments or gifts from third parties. Now, they will be able to make the most of their profile during their time at university, whether through partnerships with sportswear or equipment brands, merchandising, public appearances, or their social media presence.
The change has immediately stimulated movement among brands. “A lot of these guys are local heroes,” said Stephen Stokols, the CEO of telecoms provider Boost Mobile, in an interview with ESPN. “We think it's a big opportunity to get regional and local with relevant names in those markets.”
According to ESPN, Boost has a list of 400 college athletes lined up and has already signed the likes of Hanna and Haley Cavinder, twin sisters who play basketball for Fresno State and have sizeable followings on social media. The college market will also open up opportunities for smaller companies to make an impact with more affordable deals.
Talent the driving force to commercial opportunities
What could be most significant, though, is the capacity for student-athletes to cultivate and monetize their own audiences through social channels, YouTube, and streaming platforms like Twitch. For some of them, tapping into the influencer economy will represent the best way to generate substantial income from their short college careers. At the same time, it could also create new possibilities for some sports to find new fans.
College athletes are among the highest-profile and marketable exponents of the sports they compete in, particularly those without a robust professional structure. Those with the creativity and cultural judgment to build loyal supporter bases could become enormous assets. Specialist suppliers and manufacturers, and other sponsors, could work with those athletes to engage and grow a national or global audience for their sport, introducing young fans to the finer details and culture while driving participation.
It will be some time before the implications of all of this emerge. Despite the widespread clamor for a change, the NCAA had been intending to wait until there was greater legislative consistency around NIL laws to change its own rules, fearing that it would create an uneven playing field between colleges in different parts of the country. Some are expecting a degree of uncertainty and opportunism in the market and between competing universities until the federal government is in a position to issue its own law.
Nevertheless, this promises to be not just the beginning of a new era in US college sport. It can also be a powerful demonstration of what young, digitally savvy athletes can accomplish when given the freedom to do so.