Context of NIL
Context of NIL
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Before talking about the Names, Images, and Likeness (NIL) in the NCAA, we are going to sum up how and why it was created. According to the NCAA Division I manual Bylaw 1.3.1 (2020), the NCAA was created in 1906 to “to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.” The amateurism definition written down in the same NCAA Division I manual (2020) states that amateur athletes have to practice without any form of final compensation. Therefore, per NCAA rules, student-athletes could lose NCAA eligibility and become unable to train and compete if they get paid in any way other than the grant-in-aid. We can observe that athletes were never able to use their image to earn money. Until the end of the 2000’s, when everything changed as student athletes filed a lawsuit against the NCAA to protest the rules banishing the opportunity for them to receive shares from their NIL. According to Lush, 2015, the ruling in favor of the student-athletes was the first step towards the direction of the NIL as we know it today. Then, the NIL discussion became more and more important until 2019, when the state of California created a measure: the “Play Fair to Play Act” which allowed athletes in California to earn compensation from their NIL. The pressure on the NCAA following these measures and the loss in court (Poyfair, 2022) pushed them to propose a timeline to adopt a NIL policy in favor of the athlete for the whole NCAA. (Jenkins, 2019).
The NIL is defined by the NCAA as “any activity that involves the commercial use of an individual’s name, image or likeness to advertise or endorse the sale or use of a product or service.” (NCAA, 2024a). This describes all the different ways a student-athlete can make money outside of grant-in-aid while staying eligible per NCAA rules. The NCAA (2023), states that the association started the process of creating a national NIL policy in October 2019 and made it officially effective on July 1st, 2021. We are still in the early phase of development of the NIL, and the NCAA is trying to adjust and modify the rules year by year to ensure equity between every university and athlete. This is still a complicated process as the rules can depend on the state law, the NCAA rules and the school’s NIL policy.
According to the website OpenDorse that follows collegiate NIL deals and fluctuations, an “estimated $917 millions” was spent during the first year of NIL in the NCAA. They also added that the second year total spent was $1.14 billion.
Fig 1. NIL a lucrative deal for some college sports. (OpenDorse, 2024)
We can see on figure 1 that the average NIL deal is between $1,524 and $1.815 while the median is only $53. We also can make conclusions about differences between sports where athletes are getting more paid than others. Other sources like Carter, 2023, tell us that in 2022, 17% of DI had NIL, while the mean was $1300 and the median $65. To give an idea of the top NIL deals, according to ESPN (Coello, 2024), the top NIL deal in 2022 was 5 millions, you would need at least a million to be in the top 20, and $580,000 to be in the top 100.
According to the website On3 (Nakos, 2022), we were counting more than 120 collectives existing, all of them created for specific universities but independent. They use different revenue sources from businesses and donors to create NIL opportunities for student athletes. They can be either for-profit or non-profit status and are working closely with boosters. Boosters is a term used by the NCAA to describe a person that “supports teams and athletics departments through donations of time and financial resources which help student-athletes succeed on and off the playing field.” (NCAA, 2024b). We know that 20% of NIL deals come from apparel/ footwear brands, 14% for restaurants, and we can also count technology, automobile and financial services as potential collectives with many others (Wittry, 2023). Athletes that bring attention and a lot of followers on social media can sign deals with big brands like Nike, Adidas, Under Armour for the athletic one or some non-athletic like T-mobile, Sam’s club, or Amazon. In 2023, there were 201 NIL collectives according to Carter, 2023. As of right now, it is hard to find accurate numbers, but the NIL movement is growing fast and more athletes and collectives are getting involved every year.
NIL collectives are subject to NCAA rules to be able to take part in NIL deals. Without going into too much detail, they mainly need to respect rules related to the university boosters as well as contact with the student athletes. (NCAA, 2024)
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