The new business of college football: How NIL has changed the landscape

The off-field world of college football is completely different now that players can legally profit off their name, image and likeness.

By Michael MarksAugust 29, 2022 2:38 pm,

On the field, college football looked as it ever did in its return on Saturday. Off the field, however, the game has changed.

A Supreme Court ruling in 2021 paved the way for college athletes to make money from their name, image and likeness. Since then, a new ecosystem based around compensating student-athletes has emerged on its own, with little guidance from the NCAA, universities or their athletic departments.

Ross Dellenger, college football reporter for Sports Illustrated, spoke to the Texas Standard about the new business of college football.

This transcript has been edited lightly for clarity:

Texas Standard: When college athletes got the legal right to make money off their name, image and likeness – NIL, as it’s commonly called – a lot of folks envisioned that taking the form of endorsements, selling merchandise, making appearances. How close is that to the current reality? 

Ross Dellenger: Well, in some respects, that is the reality for some players; they are earning compensation from endorsement contracts and commercial deals. But we have seen NIL over the last 14 months or so evolve into something else entirely.

Boosters, donors of schools have involved themselves fairly heavily and are using NIL to basically distribute payment to players. So what’s happening is most schools nowadays have what they’re calling a collective, and basically it’s a collection of boosters that are donating money to a pool. And that money is being distributed to players in exchange for players, you know, appearing at events, a podcast with a booster, you know, very little things; there’s not a whole lot of deliverables going on from the players’ side. But they are they’re getting checks, basically.

A lot of people think, well, it’s one thing to have boosters just basically giving athletes money, right – creating a kind of incentive that is prohibited, strictly speaking. On the other hand, what is the real difference in, say, boosters who have an interest in the university providing this money in exchange for, say, speaking or making an appearance and, say, one of these athletes getting a getting a gig putting his face on a Pringles can or cereal box or something?

Well, obviously, you know, when you talk about big brands that are using athletes’ name, image and likeness for endorsement in commercial opportunities, that’s, kind of the normal process. That’s how everybody thought that it would go. I think the big difference in something really the NCAA and college administrators expected was that boosters were going to get involved because of recruiting, you know, and that’s what makes college sports different from professional ranks. You have a draft, obviously, in the pros, and in college you have recruiting. And what’s happening is NIL is being used by boosters as recruiting inducements. You know, if you give your players money in this roundabout way using NIL, well, recruits will see that they’ll want to come here and there are somewhat bidding wars among collectives.

It’s my understanding that this is really going big at a couple of Texas schools, Texas Tech and Southern Methodist. I hear that they’re going to be paying all their schools’ football players what amounts to kind of base salaries.

That’s right. I think Texas Tech announced maybe $25,000 base salary, and SMU announced something similar. And of course, at the University of Texas, they’re doing salaries kind of by position. Offensive linemen are getting $50,000, I believe, at Texas. And, you know, A&M has its fund. So Texas is certainly, I would guess as a state, it and Florida are probably ahead of everybody else when it comes to this new world.

Could it change the culture of college football at some more fundamental level – the way that players are recruited more broadly, and the expectations that players have when they’re shopping around for college?

It is changing the landscape of recruiting. Everybody would tell you that recruits were getting paid by select schools probably before all this, that recruiting inducements did exist. So it’s been happening. Now it’s happening, obviously, at a more serious clip, and it’s bigger money. And there are a select number of schools that are more ambitious because they have more money – so not surprisingly, they have the bigger collectives. So this is changing the recruiting landscape. And those at the top – Clemsons, Alabamas, Georgias – I think are fearing those other schools that are being more ambitious with NIL.

But there’s been a reason that the NCAA has regulated inducements in the first place. That hasn’t changed, the philosophy behind those regulations. Now you have something that is under the dressing of NIL, but by all descriptions, I mean, sounds like essentially an inducement. I mean, are we just playing word games at this juncture? 

Well, I think that many of these are inducements. The problem is finding the evidence to prove that it is inducements. And because the fear is that these boosters, these collectives, will eventually sue the NCAA – which has been sued into oblivion already – if they come in and crack down, because to the boosters and to these collectives, they are just abiding by their state NIL laws and they are providing payment for athletes for using their name, image and likeness in appearances and whatever else. So they have a lot of documented proof that they are doing that, but we know the real reason why they’re doing it. And the problem is proving what the real reason is and having evidence that they did this to recruit this this prospect.

Is there any momentum, any pushback when it comes to what we’re seeing with these collectives?

Well, the NCAA is investigating, they’ve been down to Miami, for instance, on campus there. They’ve investigated specifically a booster there – not a collective, but a single booster who has provided $7 million in NIL payments to athletes at Miami. So again, the issue is, will they find enough proof, enough evidence to sanction a school? And what will probably happen is they won’t penalize the players specifically with ineligibility, but they’ll sanction the school for not policing its boosters. And they might even force the school or require the school to distance itself from the boosters. So we could see that coming. Invariably, though, if that does come, we will see lawsuits, and many believe the NCAA will lose those lawsuits in court.

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