In 2021, the U.S. Supreme Court decided to allow student athletes to profit from their respective name, image and likeness(NIL). NIL has changed the traditional dynamic in the world of athletics.
The money that once went to athletic departments is now going towards their players. While this is helpful for the players, universities are scrambling to find new ways to generate revenue to land the top high school recruits who can shop their services to the highest bidder.
Here are a few ways the new dynamic of NIL will continue to impact college athletics for years to come:
The impact on funding models
NIL athletes have earned money through three revenue streams. The three outlets include NIL collective(donors raise money to fund student athletes), brand partnerships(athletes enter endorsement deals with certain products) and entrepreneurial services(the use of their name, image or likeness to provide their own merchandise or service). This could include starting a clinic or a camp in the player’s name. This model has allowed student athletes in certain sports to earn much more than others(such as basketball and football).
There is another funding stream expected to be put in motion in the fall of 2025. This would allow universities, especially the big name colleges, to share a certain amount of money with the athletes. This new model could create major separation between the big and small markets in college athletics.
Most revenue is expected to go to football and basketball, however the amount of revenue that goes towards each sport will vary depending on the school and what sports are most popular among fans. The other athletes on campus likely won’t benefit much from the new funding stream.
The role of NIL collectives
While revenue sharing could take over some of the impact of NIL collectives, collectives likely won’t go away anytime soon. This is especially true if revenue sharing is subject to Title IX regulations that prohibit discrimination in education based on sex. The status of this issue is still unclear.
NIL collectives aren’t controlled by institutions or guided by Title IX. Since these collectives are separate, schools can take the money collected and distribute it however it suits them. Schools typically gravitate this revenue towards the football and basketball programs. The rest of the money the college has after spending it on the top sports will go to other sports whether it be soccer, baseball, volleyball, or whatever sport hasn’t had money spent on them.
The role of culture
With the funding models constantly shifting, there is a consistent need for environments that foster team culture for student-athletes. This will have a major impact on recruiting athletes as well as keeping them around.
Culture is a major loophole for smaller schools to keep pace with big name schools in recruiting athletes. Small schools basically have to lean heavily on their strengths and think outside the box to recruit the top high school prospects since they don’t offer the same financial aid that the bigger schools do.
Sabrina Oostburg, a track and field athlete at Belmont University and the founder of her company, NIL Roadmap(a company that helps high school athletes learn how to deal with NIL) explained how smaller schools can use culture to their advantage in high school recruitment. “For example, you look at the Army and the Naval Academies. They don’t offer NIL collectives as payments to their athletes. So how are they still getting athletes to come to their school? It’s because of the culture, the environment they offer, things that go beyond just money. That’s where you have to look at facilities and, of course, education, which is why we go to college in the first place.”
Impact on recruiting
With salaries coming into the collegiate space and with an emphasis on the desire for experience and high-level facilities, the recruiting landscape is in a state of constant change. Even though collectives have eliminated money that once went toward facilities, there are still a few facility characteristics that remain in high regard. These include buildings and spaces that help generate high finance for the school, year-round operational facilities, and multi-purpose facilities.
NIL has increased the importance of how much revenue a college puts into their sports programs. There is now more focus on funding and assuring that they offer the best experience and facility for the athlete. This contrasts colleges previously focusing more on academics than athletics.
Forcing colleges to adapt to new standards
College athletes being paid has caused a rapid change in the importance of universities adapting to a new approach. The change in approach can include how they invest in facilities and how they generate revenue. Student athletes will also adapt their approach by promoting themselves and their respective brands in different ways.
NIL will change college athletics in many ways. Whether it be how that college goes about spending their money or the different recruitment strategies they use, the new dynamic has forever changed the landscape of athletics.
