The Wild, Wild, West of NIL

Happy Friday everybody, I'm really looking forward to these conference championship games this Sunday, but I want to talk about the nuances being NIL deals in college sports.

At this point in college sports, NIL deals are a massive driving force, if not the main driving force, in what attracts athletes to schools. And as we can see, some schools are more fortunate than others when it comes to dishing out these deals.

So let's dive into how NIL deals work. NIL stands for name, image, and likeness of a student athlete. Basically, it represents the fame and notoriety that comes with a student athlete.

Each athlete is viewed as a type of celebrity or influencer almost and are valued at a certain price based on how skilled the athlete is and how well known they are. This valuation can differ on a bunch of different things.

Two examples of interesting NIL valuations are LSU gymnast Livvy Dunne and USC basketball player Bronny James. Livvy has such a high NIL rating because of her massive social media following, and she gets massive deals because of this, despite being in a sport that typically doesn't bring it that much money to the school.

Bronny James has such a large NIL valuation due to his father being LeBron James, arguably the greatest basketball player to ever touch the court. Bronny is a role player who comes off the bench for his team yet he rakes in by far the most amount of NIL money due to his notoriety.

The way that these athletes sign deals and get paid is much more complicated than most people think. Companies and agents work with each school and are matched up with athletes to create ideas and connections with brands and companies for personalized endorsement deals and advertisements.

These agents work to contact potential sponsors to create positive deals and contracts for their assigned athlete. Also, financially successful individuals can act almost as boosters to offer schools massive deals for athletes as a way to attract them to come to the school

For an example of this, we can look at the University of Miami. John Ruiz is a Miami native and massive supporter of the university's athletic teams. He's a successful lawyer and business owner as well, as uses LifeWallet, one of his businesses, to make NIL deals with athletes through the school. In January of 2022, he posted a tweet saying, "LifeWallet has $10 million set aside for NIL deals. We are more than ready."

What makes the NIL landscape interesting is that each state has its own laws regarding how college athletes can be paid, how much they can be paid, and how companies and brands can work with the school.

Additionally, schools in small markets with less big brands and companies struggle to bring in as much NIL money to dish out to athletes as other large market cities, and their athletic performance can be brought down because of this.

Look at Clemson for example. From 2015-2020 they were a football powerhouse, winning two CFP National Championships and making the playoff every single year during that six year stretch. They didn't have to worry about enticing athletes with large NIL packages, as they had their history of dominance and great coaching staff as selling points.

But when NIL deals came into play, they struggled due to being in a smaller town in South Carolina with much less brands and companies to present athletes with NIL deals. Clemson has struggled since then, and hasn't even come close to competing for a national championship since Trevor Lawrence left the school.

It'll be interesting to see how much more the NIL landscape will change. College athletes having the ability to make money off they name, image, and likeness is still a new phenomenon, and the laws, rules, and standards of NIL is certain to change and develop further.

That's it for this week. We'll check in Monday to recap the NFL conference championship games. I'm hoping for a Lions Ravens Superbowl matchup, but let's see which teams come out on top Sunday.

John Stanley

Content Writer