College athletes' earning opportunity: NIL deals
The NIL regulation, in effect since 2021, has opened a revenue stream for college athletes.
1What is the NIL regulation?
On July 1, 2021, the NCAA allowed college athletes to earn income through their name, image, and likeness (NIL) rights. This historic change reversed the old NCAA policy that such deals threatened athletes' eligibility. Over 30 states passed laws permitting college athletes to commercialize their NIL rights, and courts also ruled in favor of athletes.
2How much do athletes earn?
A small percentage became rich due to their talent and marketability. For example, Jackson State defensive player Antwan Owens signed a deal with 3 Kings Grooming. Auburn quarterback Bo Nix partnered with Milo's sweet tea. However, the majority earned much more modest additional income. Athletes with large social media followings, like Haley and Hanna Cavinder, quickly signed deals with companies such as Boost Mobile and Six Star Pro Nutrition.
3What do NIL collectives do?
NIL collectives are nonprofit groups typically funded and run by boosters, alumni, or fans. They are set up to help a school's athletes secure sponsorships. This created an unregulated 'pay-for-play' system where athletes are paid for their talent. Athletes can now pursue previously prohibited skills, such as starting and marketing their own small businesses while competing as college athletes or gaining hands-on experience in taxes and other financial matters.
4Why is the earning window short?
One reason college athletes deserve to earn while still students is that their opportunity to profit from their skills is very narrow. For decades, athletes have been told they'd 'go pro in something other than sports'—meaning their primary income as adults likely won't be in the NFL or NBA. The chance of an NCAA athlete even competing professionally is quite low—less than 1% in many sports.
5What do coaches and administrators earn?
NCAA Division I athletics have been increasingly commercialized for decades. Top officials, athletic directors, and coaches command high six- or even seven- and eight-figure salaries. The athletes themselves were the notable exceptions—until 2021, they received little more than scholarships, even though their talent and work are central to the entire enterprise. Many adults, including college coaches and administrators, pursue jobs that maximize earning potential.
6Benefits beyond money
The major change for athletes in this new system is earning money, but that's not the only benefit. Athletic department staff nationwide hold positive views of NIL policies. College athletes engaging in NIL deals appear to mature faster, behave more responsibly, and often partner with charities to support worthy causes. Athletes are more aware that demonstrating reliable and mature behavior makes organizations more likely to partner with them.
7The impact of economic well-being
Our study highlighted how economic well-being influences other aspects of a person's overall well-being—mental, emotional, or social health. If schools and coaches are interested in ensuring athletes' overall well-being, providing ways to earn money can play a key role. Even relatively small financial gains of a few hundred or thousand dollars from branding opportunities can make a profound difference to young people or their families.
8The truth behind the NIL debate
Concerns about paying student-athletes stem from a historically entrenched paternalistic mindset in college sports. The NCAA has a long history of opposing athletes profiting from their intellectual property. Even President Donald Trump voiced concerns, suggesting current NIL policies 'could cause serious damage to college athletics.' However, there are many misconceptions about how NIL policies work. It's not unreasonable for athletes to want to maximize earnings from their athletic abilities during this short window.
Original article: Fortune | FORTUNE — Üniversiteli sporcuların kazanç kapısı: NIL anlaşmaları