Earlier this week, David Ubben had an article in The Athletic detailing the influence of so called Name Image and Likeness (NIL) collectives. In the article, Ubben profiles Spyre Sports, a Tennessee focused sports collective.
What Are NIL Collectives?
If you are not familiar with the concept of NIL collectives, you soon will be. These collectives are for profit companies established to produce lucrative NIL deals to benefit a single university. NIL collectives offer direct access to athletes for fans willing to pay for it. The access might range from caravan-type meet-and-greet events for fans who subscribe for a monthly fee to personalized experiences for high value contributors like dinner with a star player. Instead of more conventional endorsement deals, these collectives rely on a player’s name and personal access to them as a way of raising a substantial slush fund to pay players to attend and play for the university they are organized to benefit.
Among the insights from the article, Ubben says that the fundraising goal for the Tennessee sports collective has a goal of raising $25 million dollars annually for their player sponsorship entity. What is more staggering is in less than six months, Spyre’s annual fundraising goal has escalated from a goal of $3-5M annually.
What are the Implications Brought By NIL Collectives
This information has caused me to reflect on the implications of the arms race in NIL funds in big-time college athletics. Having spent a decade in nonprofit fundraising and development, I am left to wonder about the long-term consequences of this shift in the balance of economic power that NIL brought.
At least three questions come to mind:
Where will the money come from to fund these collectives?
In nonprofit fundraising, a reality that we struggle with daily is that there is always a defined economic pie before us. That means that the potential funding available to us through donors at any given time is not unlimited. The only two alternatives to increase funding is to either increase the amount given by existing donors or to on-board new donors.
The problem for NIL collectives seems to me to be the finite sources of revenue. Businesses will move advertising dollars to NIL deals as long as the athletes they sponsor bring in business. What happens when a 5-star recruit who has signed lucrative NIL deals underperforms? Do the collectives withdraw deals once committed?
How will schools be impacted directly?
Understanding that the dollars that even the wealthiest of donors are willing to commit to college athletics are limited, will NIL collectives negatively impact giving to school athletic departments? Right now, schools, through their booster organizations, capitalize their operations by giving deeper levels of access and greater amenities to donors who give at higher levels.
Given the opportunity to funnel dollars directly to NIL collectives, will donors prefer spending their money in ways that put better athletes on the field and give the donors more face-to-face access to them? Will those same donors divert funds that have been used for facility improvement or upkeep into the more attractive experiences that involve the people that play?
How will NIL collectives change the landscape of college football?
Which national powers will miss the boat (or already have missed the boat) in reading the NIL situation too narrowly? It seems like the advent of NIL collectives hold the promise of substantially altering the landscape of bigtime college football by giving schools once hampered by a difficult location or poor facilities the opportunity to compete because they have a large “payroll” with no salary cap. Perhaps the idea of a salary cap to keep some sense of competitive balance in recruiting is next, but the complexities of state laws and governing structure of the schools seems too convoluted to provide a unified solution. And, the neutered NCAA is hardly in a position at this point to come in a bring order to the chaos.
All in all, the changes to college football resulting from NIL are just beginning. What do you think the future holds?
I’d love to hear from you by either dropping a comment here or on Twitter at @TideWorldOrder.