Odds are you’ve probably heard about Name, Image and Likeness, or NIL for short, in the news or on the social feed over the past month. But what does it mean and why should you care?
For nearly have a century, college athletics have existed as an entity that challenged their professional counterparts in terms of popularity, if not surpassing them on occasion. On gamedays in the fall, LSU’s Tiger Stadium alone becomes the sixth largest city in Louisiana, seating 102,321 people, each more football obsessed than the last. In the entire southeast, weddings on fall Saturdays are considered a serious faux pas.
And with all that attention and fervent support comes money. In the 2018-19 academic year (pre-COVID), LSU brought in $157.8 million, which was only good enough to be 10th among college athletic departments that are required the release their revenue. The University of Texas topped the chart with a revenue of $223.9 million. And that’s just the money they made before getting payouts from their conferences, which with the advent of conference television networks has continually ballooned. The SEC paid out $83.6 million to its member institutions in 2018-19, the most among all conferences.
Most egregiously, the NCAA Men’s Basketball Tournament, commonly referred to as March Madness, is estimated at generating $1.8 billion dollars in revenue. That’s billion with a B.
But the kicker is that the college athletes that generated this obscene wealth didn’t see a nickel of it. College athletes have always been barred from receiving payments while schools have been collecting gate revenue since the first organized football game. The NCAA justified this by saying college athletics has always been based on a model of amateurism where the athletes perform for the love of the sport rather than for the payment.
Over the past decade there has been a growing resentment among college sports fans and media over the unfair business model put in place by the NCAA. Several lawsuits have been filed against the NCAA, each one chipping away the NCAA’s credibility more and more. This culminated in the Supreme Court unanimously ruling against the NCAA in their case against Shawne Alston, deciding that the NCAA was violating antitrust law with their business model.
With nothing else left to justify their business model, the NCAA allowed college athletes to earn profits off based on their three unassailable qualitative measures: Name, Image and Likeness (NIL). The laws went into effect on July 1st and it didn’t take long for players to make deals to earn some wages off their hard work.
The first thing these NIL laws have done is eliminate a lot of gray area that previously existed. For example, high-profile college athletes have always been signing autographs. But the people who sought out those autographs then turned around and sold the autographed memorabilia for a high dollar amount while the player issuing those autographs didn’t see a dime from it. Recently there have been more and more college athletes starting YouTube vlog and streaming video games on Twitch, but the NCAA forbid them from seeing any revenue they generated that YouTube and Twitch were willing to share with them. With NIL laws in place, the players can see profits from these endeavors that were previously hidden from them.
The other big impact from NIL is that for the first time ever, college athletes can market themselves. LSU quarterback Myles Brennan and cornerback Derek Stingley Jr. signed deals with Raising Cane’s and Walk-Ons, two restaurants that were founded near LSU’s campus and are an integral part of the Baton Rouge community. That makes a great deal of sense for both restaurants while allowing for successful college athletes to profit off their hard work and dedication.
And it’s not just football players who are seeing the profits. In addition to being athletes, many college gymnasts are also Instagram influencers, making them much more desirable for brands in their marketing efforts. Most of the LSU gymnastics team has over 10,000 followers on Instagram and have already announced deals. When the NIL deals went in place, LSU took out an advertisement in Times Square and flew out a gymnast to further promote the change. A Tennessee baseball player who hit a notable walk-off grand slam in a postseason game began selling a shirt to commemorate the occasion and many basketball players have signed lucrative deals.
NIL is exciting for both marketing agencies and brands because it offers up a new avenue for advertising that previously did not exist. Both giant corporate entities that are household names as well as local small businesses in college towns have an opportunity to make an impact with these deals while also providing college athletes with a means to generate their own revenue.