If you are reading this and you are not from the US, you probably have yet to learn what a NIL deal is, what it stands for, and how student athletes are making millions off the back of it. In this article, I unpack what a NIL deal is, the benefits, the disadvantages, and the unfair bias it potentially creates.
What is a NIL?
NIL, short for Name, Image, and Likeness, pertains to how a student college athlete can profit off themselves using their ‘NIL’. The NCAA only approved this rule in July 2021, so the world of NIL is still relatively new. Still, it has already changed the game for college student-athletes.
It took quite a while for NIL deals to be legal, and approval is still based on state /school rules.
The NCAA NIL rules do not override state college/university or conference-specific NIL rules. This means student-athletes will need to do some background research in the state where their school is located and check with their athletic department for any school and conference-specific rules to apprehend if there are any restrictions regarding their NIL.
If the state where a student-athlete is competing in has no NIL law, they will have the complete freedom to compensate for their NIL as they please, considering that they do not violate pay-for-play and receive a financial incentive to sign or remain with a program.
Athletes can profit in many ways: appearing in ad campaigns, selling ads on their social accounts, selling merchandise, starting their own sports camps, starting their own businesses, selling signed memorabilia, making paid appearances, delivering speeches for money, and arranging autograph signings. The list goes on.
Are NIL deals a good idea?
While student-athletes making money off themselves may sound like a great recent idea, colleges have been profiting from their students for years. Many see it as an excellent opportunity for the stars to gain publicity and make money for their future while still in school, and have been known to even benefit local communities as some student-athletes have been generous enough to give back by giving a portion of their proceeds to elementary schools.
NIL deals, however, have come under heavy controversy for several reasons; some believe that certain athletes may prioritize the money over academia, either choosing to go to a school where NIL deals are booming, over the quality of education at the said school, or players even skipping practice to attend an endorsement deal.
Show me the money…
Additionally, NIL deals can be very lucrative. They could make some student-athletes a small fortune into the millions, potentially a lot of money at a young age, which most will not be financially equipped to handle. Male athletes also have greater earning potential over women overall – while black female college athletes may have the least earning options. This raises the question: do NIL deals create an unfair bias?
We have seen many student-athletes benefiting from NIL deals, such as potential NBA prospect Bronny James, the son of Lakers legend Lebron James. Bronny has earned one of the highest NIL deals in history with $7.2 million, and he is still not out of high school -. Has James only received such high endorsement deals because of his father? It certainly may have contributed – and are the deals not based on Name, Image and Likeness –but should NIL deals not be based on an athlete’s performance as well?
The odds of success
Is it still a great opportunity nonetheless? Student-athletes can make millions if they build a profession out of their chosen sport. A professional career, however, is only a guarantee for some student-athletes. The odds are indubitably against them, with the chances being 554:1 for making it to the NFL, 1,920:1 for making it to the NBA and 829:1 for making it to the MLB. After years of dedication and hard work, many will not go beyond college level.
Even if they are lucky enough to go professional, most athletes will only have a short amount of time, depending on the sport, before retiring. NIL deals are the perfect opportunity to provide security for those who do not make a full career out of their sport.
Please bear in mind that US collegiate sports further lends itself to other big businesses. An indication of its popularity is reflected in the betting handle of the newly legalized and regulated betting market of the United States. “College sports currently accounts for roughly 20 percent of betting handle and has a big following”, says Gerard McNamara, SVP Americas at specialist odds provider TXODDS. “It forms the basis of one of our most in-demand products”.
NIL deals certainly have their advantages. Sports, especially in the US, is a very remunerative business. In my opinion, college student-athletes should have the opportunity to make a profit of their own – and NIL deals do appear to make a good impact overall. However, I do believe they can create an unfair bias – and is that the name of the game?
Written by: Deanna Pearce