NCAA/NIL Ruling and it’s Impact
The U.S. Supreme Court recently ruled in favor of student-athletes on a critical issue that strikes at the heart of the college sports business model. This decision removed a long-standing NCAA rule that prohibited college athletes from profiting from their names, images, and likeness (NIL) while still in college.
Here is a quick breakdown of how these new rules are designed to work:
Schools Will Not Be Allowed To Pay Athletes Directly
New laws and NCAA rules explicitly prohibit schools from directly paying athletes for their NIL or any other purpose.
Athletes Will Be Able To Hire Agents
New laws and NCAA rules allow college athletes to hire agents, lawyers, or tax professionals to help them navigate future opportunities.
There Are Restrictions To How Athletes Make Money
There are restrictions and they vary State by State and sometimes university by university. In some places athletes aren’t allowed to endorse alcohol, tobacco, or gambling products. Others restrict whether an athlete can use school logos or other copyright material in any paid opportunities. Most schools prohibit athletes from signing any deals that conflict with the schools’ sponsorship agreements.
What Does This Mean For The Future Of College Sports And Its Fans
Athlete driven media goes wild. College athletes are now empowered to make brands for themselves, this marks a major shift in the landscape of college sports, but we’ve already seen a massive shift in direct-to-consumer marketing and Ecommerce with professional athletes. Now, we will see technology play a big role to create new athlete-driven media opportunities and expansion into new avenues of content for college athletes. This will help fans connect with the athletes like we’ve never seen before at the collegiate level. We believe this ruling will only accelerate the age of “Athlete-Driven Media”.
Non endemics and local brands will fuel growth. There will also be non-endemic sponsorship opportunities for the athletes, as they can branch into non-traditional markets outside of the sports industry. We have already seen some athletes take advantage of the new rules only a week after the ruling. University of Miami Quarterback D’Eriq King has made a name for himself by signing a twenty-thousand dollar deal with College Hunks a junk removal and moving company, he’s also launched a podcast, developed his own website, and created custom merchandise.
Legal landmines everywhere. Regulators will battle these new rules State by State and sometimes deal by deal. For example, Barstool Sports has gotten involved early on, launching a new campaign “Barstool Athletes.” There are already numerous student-athletes who are now part of the Barstool “brand.” Barstool does have a strong influence in the sports betting industry through their partnership with Penn National Gaming, which may cause issues for some athletes in states that don’t allow athletes to promote gambling products. There is also a question of whether being sponsored by a betting company goes against the NCAA’s code of conduct. The waters are already murky, and it’s only the beginning.
Top Stars In College Sports Will Benefit The Most. There is no doubt that the top stars stand to benefit the most from this, signing deals potentially worth hundreds of thousands of dollars. However, for the lower division athletes and the less prominent players, this ruling may mean more. Many have to work multiple jobs along with their training and educational responsibilities just to get by. Although they may not receive massive amounts of money, the benefits could still be meaningful. They will be eligible to receive free products for promoting businesses and ease the expenses usually associated with travel, training, and living on campus.
Potential Return Of College Sports Video Games. This ruling would make it easier for companies like EA Sports to use athletes NIL in video games. It is still not clear if this will actually happen, but EA is committed to bringing back their popular college football video game with or without players NIL. This will also impact trading card companies, it will open the door for athletes to profit off of their NIL when it comes to trading cards. Companies like Topps or Panini will be able to profit from this as well.