A Historic Change to College Sports: the NIL Deal (2024)

By Reid Coleman

The Duke fans roared as Zion Williamson delivered yet another high-flying, electrifying dunk. Williamson is now an NBA basketball player for the New Orleans Pelicans, but during the 2018-2019 basketball season, he played for Duke University.

Zion Williamson with a thrilling dunk at Duke. Photo credit: Grant Halverson, Getty Images.

Coming into Duke, Williamson was ranked the number two high school basketball player in the country, and during his one year at Duke, he did not disappoint. In fact, he was so talented that sports website Bleacher Report ranked his freshman year as the tenth-best season by any freshman ever. Along with his basketball finesse, Williamson was known for his freakish athleticism and rim-shattering dunks. However, due to NCAA rules at the time, Williamson was not able to profit off of his fame. In fact, it is estimated by Southern Utah University sports economist Professor David Berry that Williamson would have made five million dollars from being able to profit off of his name, image, and likeness. Yet Williamson gained none of that five million dollars, while the university profited off of ticket sales, Williamson’s jersey sales, and the profound interest in their basketball program.

On July 1, the NCAA ruled that all NCAA student athletes are allowed to profit off of their name, image, and likeness (NIL). The academic institutions of the players and the NCAA used to be the only people allowed to profit off of the student athletes, but now any college athlete is able to profit from their own efforts.

The law allows students to profit off of their name, image, and likeness, but they do have to follow certain guidelines. Firstly, a student must not sign a contract with a company that contradicts a team contract. For example, a player whose team has a contract with Nike cannot sign a deal with Adidas. Along with that, students must disclose any deals made with their respective institutions.

Although the NCAA made the ruling to support this change, it ultimately took more than just the NCAA to make this rule change happen. On September 30, 2019, California’s Fair Pay to Play Act was officially signed into law. This act was set to go into effect in 2023 and fully allow all student athletes in California to profit off of their names, image, and likeness. Almost a year later, on June 12, 2020, Florida signed its own law into effect, allowing athletes to also profit off of their name, image, and likeness. However, the Florida law was set to go into effect on July 1, 2021. While the NCAA once thought that they would have until 2023 to amend their rules, when Florida’s law was set to go into effect, the NCAA realized that they had to make a decision before July 1, 2021.

Finally, on June 21 of this year, the US Supreme Court (SCOTUS) unanimously voted to allow student athletes to be able to profit off of themselves. In the Alston decision, the US Supreme Court affirmed an earlier decision by a district court in March 2021 and said that the NCAA has no right to “build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated.” Justice Brett Kavanaugh wrote that“the NCAA’s business model would be flatly illegal in almost any other industry in America.” After the US Supreme Court ruling, the NCAA was forced to act, and less than nine days later, the NCAA changed their rules.

The ruling allowed any NCAA student athlete to profit off of their NIL, but the true guidelines of this rule vary from state to state. NCAA President Mark Emmert said that “with the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level. The current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student-athletes deserve.”

As of right now, there are 28 states that have passed laws so far for the NIL. These states generally have the same guidelines based on California’s Fair Pay to Play Act. However, the specific terms of each law varies.

All states pretty much follow the same basic guidelines: a school or conference cannot restrict an athlete’s NIL rights, athletes are able to hire an agent, respective schools must be aware of all endorsem*nts or deals, and an athlete cannot sign an NIL deal as a recruiting piece. But there are also many intricacies between the states. 14 states prohibit athletes from endorsing alcoholic products or other industries that states believe might not represent the academic institutions well. Along with that, some states allow schools to restrict the athlete’s NIL, such as not allowing the usage of the team’s logo in their endorsem*nts.

Many states have passed NIL laws, but there are still 22 states yet to do so. There are 11 states with proposed laws set to go into effect, and 11 without any planned legislation at all. If a school is located in a state that has not passed a law on the NIL yet, the school is able to create their own policy, as long as it fits under the same basic guidelines that the NCAA mandated. However, with all of the different varying laws and regulations, why is there not just one federal bill, allowing all players to be under the same rules?

Simply put, Congress cannot agree upon the guidelines of the law. In fact, there have been many deals proposed before Congress. The first, which was introduced Rep. Mark Walker (R-NC) and Rep. Cedric Richmond (D-LA) in March 2019, offered athletes free reign in the market and allowed them to make money in any way possible, with zero restrictions. Another option, proposed by Rep. Donna Shalala (D-FL) in December 2019, offered to create a panel to study the issue for two years. However, this was largely turned down because proponents of the NIL did not want to wait for so long. Along with these, there have been other attempts to create a federal bill, but none with ample support.

More recently, there were four more proposed bills in the US House in early October, and the Atlantic Coastal Conference (ACC) sent letters asking Congress to ensure “competitive equity for all student-athletes.” A hearing was issued, and Emmert testified before Congress on September 30, saying that “the patchwork of state laws has left college athletes subject to different sets of standards than their peers in neighboring states.” However, even after all of this work, nothing was ever passed, and a federal bill still seems quite far off in the distance.

It is very beneficial to the NCAA athletes that they are finally able to profit off of their name, image, and likeness, but have these new rule changes actually affected the lives of most NCAA athletes?

Well, obviously some high-profile athletes are profiting off of the new rule. In fact, Alabama quarterback Bryce Young had already made approximately one million dollars just by late July, less than a month into the new rule change. Along with Young, many others have utilized the new ruling well. The Brigham Young University football team has partnered with Built Brands, LLC, an energy bar company. All players have to wear Built branding in their practice gear, along with participating in experimental promotions for the company in exchange for “compensation to all members of the team, including compensation to all walk-on players in the amount comparable to the costs of tuition for the academic year.” Simply by signing onto this deal and partnering with the company, the walk-ons on the football team are able to receive full tuition.

However, does the new ruling really affect the everyday NCAA athlete?

I decided to reach out to a few Collegiate alumni who were successful athletically here and now play at the Division I level.

I first asked Ohio State field hockey player Hallie Brost (‘21), and she said that the new ruling “does not affect the field hockey team” very much. However, she still believes that “the rule is good” because it allows “athletes to compensate” for their hard work.

Next, I asked US Naval Academy basketball player Mac Macdonald (‘21) how much the NIL ruling has affected him and his team. Macdonald responded by saying that he could not profit off of the NIL. He said that since he goes to the Naval Academy, “none of the athletes that go here can profit.” None of the military academies allow their athletes to profit off of the new NIL ruling. In fact, they are banned from being able to profit because they are “considered to be employees.”

Finally, I asked Northwestern basketball player Robbie Beran (‘19), and he said that most of the people he knew were not “making any crazy money.” Beran explained that the “5-6 figure deals being signed on social media… are not the case for the majority.” He refers to these people as the “1%ers.” However, he still believes that the ruling was “a good step” because it allows athletes to use their “platforms to create.”

Robbie Beran (’19) and Northwestern taking on Illinois. Photo credit: Northwestern University Athletics.

For example, Beran said that many of his teammates have signed social media deals with local businesses, and that many of his teammates offer lessons for younger basketball players. Ultimately, Beran said that the new ruling “brings students and student athletes on even grounds.”

Beran has a very interesting argument, and he brings into view a scenario where a student is able to sell, for example, trumpet lessons for money. Now, an NCAA athlete is finally able to offer lessons for their talents as well.

Another example of profiting of the NIL are the Cavinder twins, Hannah and Haley, two members of the women’s Fresno State basketball team. The Cavinder twins are both star basketball players, as Haley was named Mountain West Player of the Year in the 2020-2021 season, while Hannah was named to the Mountain West All-Conference Team.

The Cavinder twins, Haley and Hanna. Photo credit: Forbes.

However, most of the twins’ fame actually comes from their TikTok account, where they have amassed over 3 million followers. With the new ruling, the twins are able to use their popularity and fame for countless endorsem*nts, and according to CNN, they “are arguably the leading faces of the Name, Image and Likeness (NIL) movement.” Although the two players are not the most popular basketball players, the NIL ruling allows them to use their fame from TikTok to make money.

Along with current college players, the NIL has also greatly affected the recruiting landscape by allowing some players to receive endorsem*nts in high school. Players such as star high school basketball recruit Mikey Williams have partnered with sports agencies to navigate the new NIL landscape. In fact, Williams became the first-ever high school basketball player to sign with a global shoe company.

Mikey Williams, a high school basketball player, wearing his Puma gear. Photo credit: Puma.

However, not all high school athletes are able to receive such benefits. Three states, Illinois, Mississippi, and Texas, specifically bar all high school athletes from receiving NIL deals before they have enrolled in college, and along with state restrictions, many high school leagues also restrict athletes from receiving endorsem*nts. In fact, Ohio State University quarterback Quinn Ewers actually forewent his senior year of high school just so he could receive NIL benefits. Ewers was once in the 2022 class, yet the league of his public high school did not allow players to receive endorsem*nts. So Ewers decided to forego his senior year of high school and enroll early at Ohio State University.

In the future, it is also possible that fewer players will choose the professional route over the college route. Because with players now being able to profit off of themselves in college, there will be less of an incentive to join the professional rankings so early. However, because of the rule being made this year, the effects on the decisions of high school players skipping college have yet to be seen.

A Historic Change to College Sports: the NIL Deal (2024)

FAQs

How are NIL deals changing college sports? ›

To aid players, various legislative bodies and the NCAA created NIL legislation. As a result of this legislation, a school's student athletes can earn money when they participate in endorsem*nt deals, create a strong social media presence to monetize their personal brand, and establish personal business ventures.

Are NIL deals good or bad for college athletes? ›

However, I personally consider allowing athletes to profit from their NIL a positive. It empowers them to build their personal brand and secure financial benefits while still in college. They can collaborate with businesses, engage with fans and set the foundation for their future careers, both in and out of sports.

What is the history of the NIL deal? ›

NIL can trace its origins to a class-action lawsuit filed in the late 2000s that marks the beginning of the “should college athletes be paid” debate. Former UCLA basketball player Ed O'Bannon argued that college athletes should be compensated for the use of their name and image in video games.

How has NIL impacted sports? ›

The Basics of NIL

College athletes have successfully endorsed and promoted a variety of products and industries, from athletic-apparel brands and grocery stores to moving companies and fast-food restaurants. NIL deals provide key advantages to athletes, including: Financial Literacy and Opportunity.

Who pays NIL money? ›

It's important to note college athletes still cannot be paid directly by the school. Instead, that's done through NIL collectives, which organize funds from donors. The money is directed to pay athletes through NIL deals.

How much does Caitlin Clark make in NIL? ›

Caitlin Clark's 11 known NIL deals are worth a combined estimate of $3.1 million, according to ON3. She ranks fourth among all NIL-eligible athletes and first in women's college basketball, recently surpassing LSU's Angel Reese and Flau'jae Johnson for the top spot.

Why is NIL controversial? ›

One of the primary concerns surrounding NIL is how it has blurred the lines between college and professional athletics. In other words, college athletics is no longer an amateur league where student athletes go to grow, develop and compete.

How many athletes benefit from NIL? ›

To date, there are more than 450,000 student-athletes across the United States who have earned NIL money by partnering with local businesses in promotions.

Do NIL athletes pay taxes? ›

Yes! Student-athlete earnings through NIL deals are subject to income tax, just like any other earned wages. The problem is NIL earnings aren't always as cut and dry as a summer job and deciding what qualifies as NIL earnings and determining its fair market value can be complicated.

Who is the richest college athlete? ›

  • 6) Caleb Williams, USC – $2.6 million.
  • 5) Arch Manning, Texas – $2.8 million.
  • 4) Caitlin Clark, Iowa – $3.1 million.
  • 3) Livvy Dunne, LSU – $3.7 million.
  • 2) Bronny James, USC – $4.5 million.
  • 1) Shedeur Sanders, Colorado – $4.7 million.
  • Highest Paid College Athletes – Additional Resources.
Apr 15, 2024

What is the average Nil deal worth? ›

The average value of an NIL deal also varies team to team, not just sport to sport. For example, the average college football player makes around $3,400 a month from their NIL. However, right now, Auburn football players knock this number out of the water, making an average of $7,400 a month on NIL deals alone.

How many states allow NIL? ›

As of July 2022, 29 states have passed legislation addressing how student-athletes can profit off their name, image, and likeness (NIL), with an additional 10 states waiting on proposed NIL legislation to pass.

What are the negatives of NIL deals? ›

NIL Con: Inequities and Distractions

While NIL deals promise newfound opportunities for athletes, they also risk exacerbating disparities and distractions within collegiate athletics. Of the top 100 athletes in NIL rankings, 98 are either football or basketball players.

What sport makes the most money from NIL? ›

Athletes across all sports have jumped into the brand endorsem*nts arena, but football and men's basketball have been the big fish so far, accounting for nearly 67% of all NIL compensation.

What can athletes not do with NIL? ›

Many states now have NIL-related laws as well. NCAA rules still forbid schools from paying their athletes. However that may change as the result of a May 2024 court settlement. Some state laws prohibit athletes from endorsing certain types of products and services.

How does NCAA regulate NIL? ›

College athletes can now make money from the commercial use of their name, image, and likeness (NIL) as a result of new NCAA rules introduced in 2021. Many states now have NIL-related laws as well. NCAA rules still forbid schools from paying their athletes.

What is happening with NIL? ›

Skinner: SB 206, which was enacted in 2019 and made California the first state in the nation to give student athletes the right to compensation from their name, image and likeness, essentially ending the NCAA's prohibition on student athletes' ability to earn money from their athletic prowess; and SB 26, which was ...

What happens to NIL after graduation? ›

Earning NIL after college

Profiting from your name, image, and likeness (NIL) doesn't have to end once you graduate — even if your professional career is outside the sporting world.

Can universities facilitate NIL deals? ›

Under the new rules, schools will be able to identify NIL opportunities and facilitate deals between athletes and third parties. There's an odd catch, though. Schools can only provide such assistance to athletes who disclose NIL activities valuing $600 or more to their schools.

References

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