Understanding NIL in College Sports: How Athlete Deals Work

Oct 15, 2024 | Branding, Marketing, NIL

What is NIL in College Sports?

This is a question that anyone should be able to answer by now – it’s Name, Image, and Likeness.

That’s what it means, here’s what it is:

• This refers to the rights of athletes (in this case, college athletes) to make money using their personal brand.

Wasn’t long ago that athletes couldn’t make a penny, they had to be supremely amateur or else they’d be ineligible to play, lose a scholarship, be a pariah in their sport, etc.

This includes using their name or things with their name on them (like jerseys), pictures of them or images that could instantly make you think of them, and even their likeness.

Likeness example = someone who kinda looks like them, wearing their jersey – technically isn’t them but makes the public think of the athlete.

So How Do NIL Deals Work?

In a nutshell, NIL deals allow college athletes to partner with brands, promoting products or services, in exchange for some kind of payment. It could be money, it could be product, but the athlete is compensated and it’s totally ok.

Maybe it could be a commercial, it could be a photoshoot and the images used in advertisements, it could be more standard influencer type promotions of products with social media.

The thing is – they’re supposed to be (and usually are) – mostly traditional spokesperson deals.

The Types of NIL Deals

1. Social Media Endorsements College athletes with strong social media followings are prime candidates for NIL deals, this makes this kind of NIL deal the most popular. They can promote brands through posts, stories, and sponsored content and they can do it easily and quickly. It’s also very organic so the promotion is less salesy, which is why brands like this kind of partnership.
2. Direct Product Sponsorships and Endorsements Athletes can also partner with companies, such as apparel brands or nutrition products. They may receive products to use and promote or get paid to endorse a brand publicly. It makes sense for your favorite athlete to post about a protein drink after working out. Or comfy clothes between classes. That protein company or apparel company is giving gear/swag, or money – for that promotion.
3. Public Appearances and Autograph Signings Athletes can also earn money by making appearances at events, signing autographs, or speaking engagements. Yes, athletes can get paid just to show up. Ever seen a bar promote who’s partying there?
4. Brand Partnerships and Affiliate Marketing Some athletes enter into affiliate marketing agreements, where they earn a commission on sales generated through their personal referral links. You see this a ton with gear but also with shirts/jerseys with their name and # on them. (check their link in their Insta profile, for example)

Key Benefits of NIL for College Athletes

• Money in College: Now they can actually make some money versus being poor, going to class, going to practice, and making a bunch of money for their university
• Skill Development: A lof people don’t think of this angle but NIL deals build creativity and communication skills. That’s going to help later in life, as will negotiation skills.
• Personal Branding: This is great for their time in college, but what about life after? Most athletes don’t play the sport professionally after college, so it helps with the first impression or resume/application review when applying for a job. Yes, certainly – the NIL efforts of college can help build long-term value!

Challenges and Considerations in NIL Deals

(it’s not as easy as you think)

Balancing Academics and Deals

You can’t be a student-athlete if you’re not academically eligible. That means you have to go to class, study, and pass. Then you have team meetings, workouts, games, etc. So in between all that, you have to find time to make NIL money.

Compliance and Legal Concerns

Aaaaahhh, the fine print! There it is. The fun police in NIL. Just because an athlete can make money doing it doesn’t mean they can do it and stay eligible to play. There are standards, possibly other school-managed agreements too which can complicate a NIL deal.

Tax Implications

Yep, you can go to jail if you don’t pay your taxes. Just because you’re a ball player and get some money doesn’t mean you don’t have to pay taxes on it. Yes – taxes. As an NIL athlete you are probably a contractor, 10-99 kind of agreement, which means you are responsible for your taxes. And if you don’t pay them, there are real hazards and penalties.

The Man is always going to get his taste.

Always.

Representation

Nearly all deals are between the athlete and the brand. Rarely is there an agent or ad agency involved so athletes have to handle a lot of the searching, connecting, negotiating, and executing NIL deals.

Some organizations like Learfield have NIL representatives that help connect athletes to opportunities, but it’s still up to the athlete to negotiate and execute.

This area of NIL and sponsorship is surely to change as college athletics changes and grows in the coming years. It will be interesting to see how athletes are represented (unions, agents, etc.) and how that connects with schools who have historically not had athlete-employees, much less athletes who are spokespeople for brands, a sport, or a university.

Wrapping Up

NIL deals have revolutionized college sports, some will argue they’ve ruined it.

(we believe the transfer rules have changed the game just as much as NICL but you can’t handcuff a kid on making money and you can’t lock them to a school they hate)

But NIL has been a transformative change to college sports and the lives of athletes by providing them with financial benefits and valuable experiences. As NIL continues to evolve (it will be different in 2025 and beyond), athletes will have new opportunities to capitalize on their skills and popularity.