In the ever-evolving landscape of college athletics, the introduction of a more regulated Name, Image, and Likeness (NIL) system was expected to bring about significant changes. The House settlement, approved last summer, aimed to curtail the “false market” for athletes’ services and lead to a “market correction.
However, the reality on the ground tells a different story. Despite new regulations and the creation of the College Sports Commission (CSC) by the Power 4 conferences, the NIL market remains as competitive and lucrative as ever.
This article takes a look at the current state of NIL deals, the challenges of enforcing new rules, and some of the creative workarounds schools are using to stay ahead. It’s a wild world out there, and it’s not getting any simpler.
The Rise of NIL and Revenue Sharing
With the approval of the House settlement, college athletic departments can now pay student-athletes up to $20.5 million this school year. The College Sports Commission was set up by the Power 4 conferences to enforce the settlement, making sure each deal meets a “valid business purpose” and falls within a set range of compensation.
The first big test of this “market correction” theory is happening right now. The results? Well, they’re not exactly what some folks expected.
The Transfer Portal and NIL Market
The transfer portal doesn’t officially open until January 2, but agents have been quietly shopping their clients all season. College football general managers are already negotiating deals for players known to be entering the portal.
According to various sources, the dawn of revenue sharing and the increased oversight of third-party NIL deals through the CSC hasn’t really tamed the so-called “wild, wild West.” If anything, the numbers look even higher than last year.
Escalating NIL Deals
Last year, the highest-paid quarterbacks in the market—Georgia’s Carson Beck (Miami) and Tulane’s Darian Mensah (Duke)—earned more than $3 million, not counting incentives. This year, the price for a proven player like Arizona State’s Sam Leavitt, Cincinnati’s Brendan Sorsby, or Nebraska’s Dylan Raiola is expected to start at $4 million and could climb to $5 or $6 million.
Schools are either ready to spend about a third of their revenue-sharing budget on one player, or they’ve already lined up other parties to help cover the rest. That’s exactly the kind of thing commissioners and athletic directors once said would fade away.
Ignoring the “Hard Cap”
The first hint that programs aren’t sticking to the so-called “hard cap” of revenue-sharing came during the recent coaching carousel. Most Power 4 schools are allocating $13-$15 million for football.
For programs like Iowa State, this is a step up from what they were spending before. But when LSU hired Lane Kiffin, reports indicated the school is “prepared to commit $25-$30 million annually for Kiffin’s roster.”
And it’s not just LSU. Auburn and Penn State are also committing similar amounts to their football programs.
Creative Workarounds and Loopholes
To reach these astronomical figures, schools have had to get creative with their funding sources. Many athletic departments have beefed up internal staffs and are working with multimedia rights (MMR) firms like Learfield, Playfield, and Opendorse to pursue legitimate brand deals for their most marketable athletes.
These MMR firms play a big role in securing CSC-compliant deals, which lets schools stretch their payrolls. It’s not always pretty, but it’s effective.
Third-Party NIL Deals
Early signs suggest the CSC is clearing most deals with established national companies, not just collectives or boosters tied to a specific school. For example, Opendorse assesses the brand value of every athlete on a client’s campus and then pays the school a low seven-figure guarantee it can dole out to its athletes.
This approach has already attracted blue-chip brands and partners. That gives schools a real boost to their revenue-sharing budgets, and honestly, who wouldn’t want that?
Apparel Providers and NIL Opportunities
Some schools are leaning into their apparel providers, like Nike and Adidas, which have long poured millions into athletic departments but never directly to athletes. Tennessee, for instance, announced a new 10-year deal with Adidas that will provide cleats and jerseys, but also offer unprecedented NIL opportunities across all 20 of the university’s varsity programs.
That doesn’t mean every player gets their own shoe deal, of course. But it’s a step toward something bigger.
Additional Funding Sources
A school with enough high-profile athletes can secure an extra $3-$5 million in legitimate third-party NIL deals to stack on top of its revenue-sharing budget. While this might be enough for most Power 4 schools, those chasing $30 million or more to build a national championship roster may need to get even more creative.
Workarounds in the NIL System
Despite new regulations, collectives aren’t disappearing. The best practice? Keep all options open.
Here are a few workarounds that sources say are already happening:
- Agent Fees: If a school agrees to pay a player $200,000, and his agent takes a 20 percent commission, the collective pays the agent’s fee directly. That saves the program $40,000 in cap space.
- Verbal Agreements: A school promises a player $200,000 and wants to split it between revenue-sharing and the collective. The parties agree to the amount verbally, and the collective submits smaller deals throughout the year that eventually add up to the total.
- Freshman Class Payments: At least one school’s collective paid their entire incoming freshman class what they would’ve earned in revenue share, so the payments don’t count against the cap.
- Unreported Deals: The simplest—and riskiest—workaround is to not report the deals at all. The onus is on athletes and their reps, not the schools or collectives, to submit third-party deals for approval.
Challenges in Enforcement
The CSC’s enforcement of new revenue-sharing and NIL rules is on hold. All 68 Power 4 schools still haven’t signed the agreement that conference leaders hope will finally add some bite to the process.
Texas Tech, for instance, hasn’t signed because it objects to the current language. Texas Attorney General Ken Paxton has even urged all of the state’s Power 4 schools to hold out.
Because of this, transfers might have to finalize their deals and enroll at their new schools without really knowing how long it’ll take for the school to get approval to pay them. That uncertainty? Not exactly ideal for anyone involved.
The NCAA Football Oversight Committee moved the portal window from December to January this year. They hoped it would make things less hectic for coaches with teams in the postseason.
But honestly, the new rules haven’t really changed much. The main difference is that kids can’t take visits now, which feels like a step backward.
For more details, check out the full article on the New York Times.
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