NIL: A Nightmare for College Sports?

Dear George, 

College sports have been turned upside down in the last few years. For over a century the NCAA treated college sports as an amateur enterprise and prohibited college athletes from earning anything beyond a free education (tuition and fees, room and board). Following the Supreme Court’s rejection in 2021 of the NCAA’s “amateurism” argument, the NCAA ended virtually all restrictions on what athletes could earn from deals involving their own identities. 

“NIL” stands for “names/images/likenesses” and refers to an NCAA rule change that allows athletes to earn money from endorsements, social media postings, personal appearances, and other similar activities involving their personal identities. They can even accept money from boosters, usually longtime wealthy donors with ties to a university. Social media influencing is most frequent NIL activity performed by athletes, accounting for nearly 75% of NIL deals. If athletes have 10,000 or more followers on Instagram, Tik Tok, Facebook, etc., they can earn money from companies by adding personal endorsements of products and services to their media posts. 

The main rationale for NIL is that college athletes generate billions of dollars for their universities, TV and radio networks, and the NCAA. Up until recently athletes haven’t been able to profit a single penny from their own names and images. Advocates of NIL argue that it’s simply fair for athletes to be compensated for the value they create. 

Soon after the NCAA changed its rules in 2021, groups called “NIL collectives” formed in order to help athletes profit from NIL. These groups are most often composed of boosters and fans, and they operate independently from the university. There are also new NIL collective business firms that specialize in connecting athletes with potential sponsors. Most NIL collectives raise money from boosters, alumni, fans, and businesses, then use the funds to compensate athletes for their NIL activities. It’s estimated that over 250 NIL collectives are currently in operation nationwide. 

In 2022 about 17% of athletes at Division I universities participated in NIL activities. Local deals have been far more prevalent than national brands. It’s expected that NIL earnings will reach over $1.5 billion in 2024. The size of NIL deals for individual athletes varies dramatically. The average NIL deal during the first year was about $1,300, and the median was $65 (meaning that about half of all NIL earnings were below $65). However, top athletes are known to have secured NIL deals exceeding $1 million or more, sometimes 30 or 40 times annual faculty salaries at their university. To take a few examples, the University of Alabama quarterback received 3.1 million in NIL deals in his senior season, and the University of Colorado quarterback earned between $4.8 and $5.1 million. A freshman on the USC basketball team earned $7.5 million this season before he played a single game. Last year a high school quarterback in Florida was offered $9.5 million by a booster to commit to the University of Miami. He initially accepted the offer but changed his mind with University of Florida boosters offered him $13.5 million. Evaluations of NIL are all over the map, with lots of arguments pro and con. 

My own opinion is mostly skeptical. Here are some of the problems: 

     (1) Negative team effects. Star players are much more likely to secure lucrative NIL deals, potentially creating resentment or jealousy by teammates, many of whom do not receive any NIL money. 

    (2) Inequality across universities. Schools with wealthy boosters are likely to offer richer NIL opportunities to attract top recruits, widening the gap still further between well-funded and less-funded schools. Likewise, athletes may be even more prone to use the transfer portal to transfer to schools with better NIL deals. 

    (3) Gender inequity. Female athletes have fewer NIL opportunities compared to males. Studies indicate that male athletes receive about 70% of total NIL earnings. The top 100 recent NIL earners this past season included 94 men and 6 women. 

     (4) Inequality across sports. NIL deals are concentrated in a few revenue-generating sports, mainly football and basketball. Athletes in those sports have a much higher chance of getting NIL deals (i.e., 92 of the top 100 earners in 2023-24). Further, as donors redirect their donations to individual athletes in football and basketball, athletic departments will receive less general funding which they could have used to support secondary sports. 

     (5) Academic disruption. With its emphasis on financial gain , some athletes might give NIL money-making activities priority over academics. 

Overall, I think that the NIL system is potentially unfair in lots of ways. However, the situation is rapidly evolving, and it will be interesting to see what happens in the future. 

 Love, 

 Dave 

SOURCES: 

Carter, Bill. Seven data points that will tell the story of NIL in 2023. sportsbusinessjournal.com, Jan. 17, 2023 

Grady Capstone. Collegiate Female Athletes Pay As Males Dominate Revenue: Exploring the NIL Gender Pay Gap. gradynewsource.uga.edu, Apr. 12, 2024. 

Rudder, Paul. Who is the highest paid college athlete? NIL endorsement deal money in NCAA sports. en.as.com, Mar. 25, 2024. 

Schoenfeld, Bruce. “Student Athlete. Mogul.” New York Times, Jan. 24, 2023. 

Teamworks.com. A Changing Game: The Rise of NIL Collectives. Sept. 6, 2023. 

Wikipedia. Student athlete compensation.

AN ODE TO APRIL

 

Dear George, 

All the months have something special about them, but I think that April might be the best. It’s the month when the flowering trees in our neighborhood come into full bloom — dogwood, redbuds, magnolias — signaling the full-fledged arrival of spring. The trees are not only beautiful, but they symbolize rebirth, new beginnings, the warm and abundant future that is waiting for us. The birds return, the squirrels and lizards are busy, the flowers begin sprouting in our garden, and Katja and I go to Rahn’s greenhouses to pick out pansies for planting. I do still wear my winter coat on the cooler April days, but the college kids I pass by are dressed in T-shirts and Bermuda shorts, probably viewing me as a daffy old geezer. 

When I was a kid our family lived in the country on the Menominee River, and April meant the total transformation of our forest world. As the snow and ice melted our gravel road turned into muddy ruts, and we couldn’t get to town, consequently enjoying our own personal holidays from school. The ice on the river melted and flowed out in early April, making a massive tinkling sound that led my parents to name it “Chinese Bells Day.” My brother Steven and I would put on hip waders and step into the flowing ice near the shore with bamboo poles, retrieving miscellaneous objects that were floating along with the ice, e.g., tin cans, rubber balls, lawn furniture, whatever. The trillium were the first spring flowers to bloom in the forest, and my mother would have us bring potted plants to our grade school teachers. Once the road dried out sufficiently we were able to ride our bikes to town and school. 

Easter, of course, occurs in early April, and we painted Easter eggs in school to bring home in preparation for the Easter Bunny’s visit. The public schools in my home town closed for the Good Friday and Easter Monday holidays. Our family was not very religious, but we did go faithfully to the First Presbyterian Church every Easter. My brother and I were always amazed at the amount of the check that my father put in the collection basket. He explained that he was covering the whole year. 

In Cincinnati the warm weather arrives earlier than in Northern Michigan, and April, with average high temperatures of 65 degrees, is one of the most pleasant months of the year. When our son was a teenager he played high school tennis for Walnut Hills, and we parents waited all winter for the arrival of April and the beginning of the boys’ tennis season. In retrospect, I would say that we were the stereotypic insane tennis parents. We attended all of our son’s matches, ecstatic with victories, anguished with defeat. In addition to Cincinnati, we travelled as a family to other tournaments in the region, e.g., Middletown, Dayton, Columbus, Indianapolis, Charleston, West Virginia . 

In addition to tennis, Cincinnati Reds baseball starts around the beginning of April, and the Cincinnati Zoo hosts its annual “Zoo Blooms” event throughout the month with its millions of tulips, daffodils, and hyacinths. The Greater Cincinnati Restaurant Week is held in late April, as is the Greater Cincinnati Earth Day Festival. 

It’s believed that April was named after Aphrodite, the Greek goddess of love. Diamonds are the April birthstone, daisies and sweet peas are the April birth flowers, and April is the National Poetry Month. George Washington was inaugurated on April 30, 1789, and the Titanic sank on April 15, 1912. Of course, many famous people have been born in April. These include William Shakespeare (April 23, 1564), Leonardo da Vinci (April 15, 1452), Queen Elizabeth II (April 21, 1926), Babe Ruth (April 8, 1895), and Billie Holiday (April 15, 1915). 

I’ve been around for well over eighty Aprils, and each becomes more significant as time goes by. Our sweet family from New Orleans already came to visit this April, making it a special month this year. I look forward to what’s to come. 

Love, Dave