🏫 What's in a Student-Athlete's Name?

All we got in this world is our name, image, and likeness

It’s about the time of year, everyone! You compile your friends together, maybe their SO’s, and why not, maybe a few randos off the street because you need to pool as many people as possible to compete for the most accurate NCAA March Madness Bracket. With March Madness right around the corner and the NFL Draft only an arms length away, now might be the best time to go over the rules of college sports and athletes. More specifically, the three words we’ve been mentioning for the last couple weeks: “name, image, and likeness” (NIL). What is NIL? How has it changed college sports? What are the benefits associated with these ever-changing rules? What does the future look like for college sports and NIL?

What is NIL and its history?

• You may remember way back when…before the summer of 2021, college athletes were not allowed to receive profits for their name, image, and likeness. The only monetary benefit college athletes could accept were school-funded scholarships, school supplies, etc.

  • For years, this was the norm. And we continued to convince ourselves this made sense, because these were student-athletes (“the student comes first!” 😳) — even though the NCAA, universities, athletic programs, and athletic department staffs continued to rake in the CA$H MONEY.

• Now, this isn’t a write-up for all the Esq. nerds out there. We’re not going to go through all the different lawsuits, civil lawsuits, rulings, etc. Just know, the NCAA has been involved with their fair share of lawsuits. But what really changed the game were the following…

  • 1) In a 2009 case of O’Bannon v. NCAA, Ed O’Bannon challenged the NCAA's use of the images and the likeness of its former student athletes for commercial purposes (all from a video game).

  • 2) In 2019, Gov. Gavin Newsome opened the doors for California to become the first state to pass a law allowing college athletes to be paid for use of their NIL — called the Fair Pay to Play Act.

  • 3) Then in 2021, to make it official, the Supreme Court ruled against the NCAA (in Alston v. NCAA). The Court found that the NCAA was profiting from the namesake and likenesses of college athletes.

    • Justice Brett Kavanaugh even added to the unanimous decision that they "cannot justify the NCAA's decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated. Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate.”

What are the benefits of NIL?

• And just like that, NIL was born! Since the ruling, we’ve seen college athletics blossom. This now gives athletes the ability to make their own money from sponsors, profit off their personal brand (See Table 1), and gives them the option to stay in school longer — rather than quickly opt to turn pro and make money in the “real world”.

• Numerous athletes, in non-high revenue sports (football and men’s basketball), are securing marketing deals and capitalizing on their fame and influence with endorsement deals, social media collaborations, and appearances in commercials 👏.

• Women’s sports are also thriving under these NIL rules. We’ve seen stars such as, Caitlin Clark, Angel Reese, Olivia Dunne, and Paige Bueckers sign multi-year deals with top brands like Nike, Gatorade, State Farm, etc. — and they’re not only earning money, but gaining a platform to advance gender equity in college sports.

  • You could argue, NIL has enhanced women's sports and brought more attention to its best and most charismatic athletes…it’s exactly why Peacock decided to exclusively stream Caitlin Clark break the NCAA women’s all-time scoring record.

What changes have we seen with the implementation of NIL?

• It’s no secret the rules and regulations are extremely complicated. To start off, there isn’t a uniform set of laws for NIL — 32 states have different iterations of NIL laws 🤕.

  • There are also limitations. Ex: student-athletes in most states aren’t allowed to endorse certain products such as alcohol or gambling.

• NIL deal-making is also very nuanced. The deals are primarily set up through "collectives," which are 3rd-party businesses usually formed by boosters or fans to create and support NIL opportunities for the school’s athletes (i.e. public appearances, autograph signings, brand deals, etc.).

  • Just about all Division I programs have at least one collective. And every school in a “Power Five” conference has one.

  • On Friday, a federal judge in Tennessee ruled that the NCAA must allow players and NIL collectives/boosters to negotiate NIL deals before a player commits (welcome to the “Pay-to-Play Era”).

    • This means collectives are not prohibited from negotiating deals before athletes commit to a school (i.e. collectives can now start deal-making during the recruiting process!).

    • With this ruling, the NCAA’s control is diminishing more and more 😂.

What does the future hold for NIL?

• Money is just one part of the pie. It’s not hard to jump to the conclusion and imagine recruits going to schools solely because of the money (i.e. the richest schools get the best talent). But to be frank, wouldn’t it make more sense to think about “personal income” as apart of the decision making process? Prior to NIL, recruits made decisions because of coaches, location, facilities, scholarships, etc. Money is always going to be enticing but plenty of these programs/collectives have the money to spend (do we need to pull out the endowment numbers and boosters associated with different schools?), now it’s just another piece to the selection process.

• Regulation will always be the biggest issue. Because the NCAA has taken years to fight this issue along with different state laws for NIL, the lack of organization and regulation is very blatant. And it will continue to be an issue until the NCAA accepts the fact that they aren’t the sole decision makers anymore.

• Collectives gained another infinity stone. With the most recent ruling of both the Tennessee and Virginia attorneys general, this could lead to athletic departments facilitating more NIL deals along with media companies offering players NIL deals as a share to generate broadcast revenue. Ultimately, giving more power to collectives as a whole, while the NCAA’s power diminishes more. However, this lawsuit can still go to trial and be overturned. As of now, collectives are in the driver’s seat.

• College becoming more stressful than the pros. With these new NIL rules and new generous transfer portal rules (essentially creating a free agency for college players to switch schools whenever), college sports has become harder to manage than the pros. There is essentially no offseason. Coaches are not just preparing for games, but they need constant face time with their recruits — whether that be meeting, scouting, etc. This shows the recruit and their families that the coaches care about them attending their program. In result, we’re going to see more coaches a) retire because of the 24/7 work and b) move to take jobs at the professional level where there’s at least a set off-season.

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Quick Hitters

• 🎽 Yesterday, the Los Angeles Clippers unveiled a new logo and set of colors where they are months away from moving into their new $2 billion arena, the Intuit Dome, in Inglewood for next season. (Oh, and it also helps we now know what a Clipper is). With this move, after sharing a home with the Los Angeles Lakers at Crypto Arena, it only makes sense for them to update their brand and get the fans (are there Clippers fans out there? DM us if so!) excited about what’s to come.

• 🧢 Speaking of uniforms, the new MLB-Nike-Fanatics uniforms were unveiled during Spring Training and the reviews from the players were…very bad 🙅. Some uniforms were flattering, some were crooked, and well most of the pants were pretty revealing. Nike designed the new jerseys to be lighter, more breathable and more stretchy. This has actually been in the works since 2018, the same year that Nike, Fanatics and MLB agreed to their current partnership. Nike designs the jerseys, Fanatics manufactures them. So who’s to blame? Right now, it doesn’t look good for the manufacturer, as they’ve been having issues with quality for quite some time.

• 🏓 Pickleball’s thriving! According to the annual Topline Participation Report from the Sports and Fitness Industry Association (SFIA), 13.6 million Americans last year tried the hot new sport. Right up there with baseball (16.7 million) and soccer (14.1 million) and just ahead of skiing (13.1 million). Participation grew exponentially in 2022 by 86%, and it continued to grow in 2023 by 52%. What’s more, is that there was an 111% increase in “core” participants (i.e. those who take part enough to have a passion for the activity — defined by the SFIA as 8 or more times in a year for pickleball).

• 🍁 There could be some trouble in Canada as NHL Commissioner, Gary Bettman, is set to visit the Winnipeg Jets as well as with local politicians, sponsors, and fans due to the attendance issues they’ve been seeing. The Jets’ home average is down by 6% from a year ago. The season-ticket base of 13,700 in 2021 has fallen this season to 9,500, and a prior waiting list for tickets has evaporated. This was already an uphill battle for Winnipeg, as they are by far the smallest market team in the NHL with a metro population of 850k. We’ll see what happens, but the numbers are scary, especially since this organization already moved from Atlanta back in 2011 😬.