Navigating Early Issues with Name, Image & Likeness (NIL)

Unless you’ve had your head in the sand, the era of college student-athletes making money off of their Name, Image and Likeness (NIL) is upon us. Some will say that this is long overdue, and some will say that it will ruin the amateur model. I’m not here to debate the merits of either of those positions, but rather to think about the implications it will have to the financial models of college athletics, and how many companies are trying to insert themselves into this space.


There are already “experts” on this topic, which is interesting, because there are still a LOT of unknowns, as to the regulations, frameworks and boundaries that legislation will establish, and how this will be managed not only across the NCAA schools, but across state lines, conference boundaries, division levels, etc. But, to be fair, there are already some assumptions that could be made. Let’s visit some of the commonly held assumptions about where this is likely to go.


1) Monetizing Social Media Accounts will be the low-hanging fruit

I think most people are talking about social media accounts for Student-Athletes being a primary entry point for monetization. Similar to sponsored posts from Athletic Department accounts, or Influencers, this transactional platform could very well be the “low-hanging fruit” and provide sponsorable inventory, and a monetization platform for Student-Athletes to profit from, based on the number of their followers, etc.


There will absolutely be money to be made in the short term, but there will also be a LOT of clutter. As with the emergence of any new concepts or platforms, there will be a lot of trial and error, early winners and early losers.


RECOMMENDATION:

As with the rest of the sponsorship industry, the folks who will emerge from this clutter will be those who move beyond the transactional and dig a bit deeper, finding ways to bring their individual brand into the sponsoring brand conversation. The better the Student-Athlete will be at authentic storytelling, and the better their understanding of how to “add” to existing sponsorships, the more successful they will be.


2) Ongoing Education will need to occur

Similar to competition rule updates, updating compliance rules, adoption of new technology, etc, ongoing education will need to occur. Whether it is to establish the consistent legislated guidelines or whether it is to protect the Student-Athletes, there will need to be trusted sources who can provide unbiased, disinterested curriculum to incoming and returning Student-Athletes.


Additionally, there will need to be curriculum tailored to the Athletic Department personnel. This will fundamentally change a core tenet of collegiate athletics and will likely impact more than just recruitment, marketing and sponsorships. It will require an acceptance of change which goes against the traditions of many departments.


RECOMMENDATION:

Developing curriculum tailored to ALL the key stakeholders will be crucial. Not just the Student-Athletes, and the Athletic Department, but also Multimedia Rightsholders (MMRs) and current (and potential) sponsors. Athletic Departments will need to proactively develop their communications plans and education plans to ensure that they maximize the collaboration amongst the parties.


3) There will be friction between the Student-Athletes and the Athletic Departments

Even though most believe that the Athletic Departments will be prevented from serving as brokers for the Student-Athletes, there will still be a ton of risk for the departments. Optics are everything and the departments have borne the brunt of the bad press, even when they weren’t actually responsible. Perhaps it will be the perceived lack of parity of opportunities for male or female Student-Athletes, which has long been the case in college athletics, claiming “sponsors just aren’t interested”, or perhaps it will be a sponsor that puts a Student-Athlete in a difficult situation. Ultimately, the Athletic Department has an obligation to mitigate these foreseeable issues as much as possible.


There will also likely be a shift of revenue from the traditional sponsorship revenue streams, as sponsors look to try something “cheaper” or newer. This change in revenue will also be a source of friction, creating additional challenges for the department. While this doesn’t have to be the case in the long-term, historically, the College sponsorship model has followed the “spots and dots” (transactional) strategy, as opposed to the innovation and integrated storytelling strategies that the private sector and other sports have followed. And coming off of a year focused on simply “surviving”, Athletic Departments should create mitigating strategies for this shift as well.


RECOMMENDATION:

Start the conversations with the Partnerships teams and MMRs and brainstorm where and how Student-Athletes could be brought into the conversation with sponsors, especially how Student-Athletes can tell stories in ways that coaches or departments cannot. Have the MMRs identify how to create lower barriers to entry for sponsors to support their investment in Student-Athletes as well. Perhaps a company who couldn’t previously afford any assets from the MMR, may start to purchase hospitality to “plus up” the company’s collaboration with a Student-Athlete. There are plenty of other potential gains instead of trying to fight over the same bite of pie.



Like any industry disruption, athletic departments can benefit by proactively identifying workable scenarios and frameworks to address these foreseeable challenges and needs of the pending NIL environment. Waiting for legislation and then reacting will likely result in having to prioritize which fires are addressed first.


In order to actually embrace the disruption and increase the proverbial “pie” for college athletics, the athletic departments, the multimedia rightsholders, the Student-Athletes and potential sponsors will need to work together with an open mind, and adopt a forward-looking attitude instead of burying their heads in the sand.



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