The Wild West of NIL May Very Well Be Coming To An End

From: Jennifer Bill Wood , Senior Vice President, Client Services

It’s been just four years since college athletes were granted the ability to profit off their name, image and likeness (NIL) through endorsements, sponsorships and events. And while that was largely seen as positive for the student-athletes who have been revenue generators for their institutions for years, it also opened up a whole host of issues in how it was executed. With no governance and an inability for universities to pay athletes directly, what resulted were new entities and collectives being formed and inconsistencies in how these deals were set up from state to state and university to university. And for brands there was even less transparency, with uncertainty over whether they were paying fair market value based on the athlete’s success and reach.

This month’s NCAA vs House settlement not only opens up direct payments from universities to their athletes, but also resulted in the Power Five conferences creating a new entity, the College Sports Commission, which will be responsible for oversight of both direct payments and third-party (brand) NIL deals (with some exceptions). The third-party deals will be assessed by a new tech platform, NIL GO, powered by Deloitte, and providing a 12-point analysis on the proposed compensation based on benchmarking of metrics across athletic performance, social media reach and fame.

What does this mean for brands? Unfortunately, people with access to the NIL GO portal reveal an early experience marked by delays and unclear direction. But the hope is that since every deal will be logged in NIL GO, the portal will ultimately lead to more transparency for brands. Over time, brands should have more assurance that the pricing they receive from agents represents a fair market value for the athlete relationship and deliverables being requested.

There is some concern that this ruling could lead to even larger compensation disparities between top football and basketball athletes versus the athletes of other sports. While the most well-known athletes from these sports will undoubtedly get the larger payouts from their schools, thoughtful brands have the ability to take a broader look at the landscape of college sports and its athletes and build NIL rosters that meet their marketing needs with multi-layered, multi-sport storytelling. And hopefully the NIL Go portal will help brands pay those athletes what they’re worth.

So, will the Wild West be tamed? While schools and student-athletes have been preparing for this for months, it all went live this week. There will inevitably be bumps along the way, but this should be seen as progress for brands. We’ll be watching to see how it all shakes out.

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