As Marketers Line up for NCAA Athlete Deals, Pitfalls Await

The argument for compensating college sports stars fairly is likely to be tested by a series of obstacles and opportunities

The NCAA’s name, image and likeness rule lets student athletes earn income from licensing merchandise, podcasting, promoting brands on social media, or streaming on YouTube or Twitch.
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A temporary name, image and likeness policy prepared college sports for a new world of student-athlete marketing. New programs at big schools in Oregon and Texas are set to groom young athletes to be better salespeople.

But are the athletes ready? Everybody’s about to find out.

As the floodgates are being thrown open to a raft of sports marketing deals aimed at college athletes, industry observers warn of potential pitfalls awaiting the students, schools and brands.

The NCAA’s interim name, image and likeness rule (aka “NIL”) lets student athletes earn income from offering private lessons, licensing merchandise, podcasting, promoting brands on social media, streaming on YouTube or Twitch or opening a small business.

On July 1, the day the NCAA first allowed athletes to be paid for their NIL rights by sponsors, 522 student athletes signed on with New York-based sports marketing firm OpenSponsorship before 5 p.m.

The company pairs athletes with small companies like Rightrice, Signables and ZoneGuard, which pay $1 to $250 per campaign to have athletes pitch their products. It typically handles roughly 50 athletes a day. That first day, there were 50 young athletes vying for each spot the company. Those 522 athletes are just .002% of the nearly 500,000 college athletes in the U.S.

“If you create really cool videos, and you’re funny—and then the brand’s vibe is funny—you’re more likely to get a deal,” said Ishveen Anand, founder and CEO of OpenSponsorship. “There’s a lot of choice now, so it might be harder to stand out. But hopefully, there’s enough brands for everyone.”

Obstacles and opportunities

Finding brands may be the easy part. T. Bettina Cornwell, academic director of the Warsaw Sports Marketing Center at the University of Oregon’s Lundquist College of Business, sees a whole field of obstacles bearing down on NCAA athletes and their side hustles.

Those questions include: What kind of deal can an agent offer? How does one contract affect future deals?  What are the tax implications of that new income? More importantly, what’s the fair-market value of NIL activities?

“The idea is that student-athletes should be compensated similarly to others that might engage in a similar activity so to avoid what amounts to a direct payment to play, from say, a loyal booster,” Cornwell said. “There may be unrealistic expectations on the amount that the typical student-athlete will be able to earn from their NIL activities.”

Social media scores count most

For every Times Square billboard that goes to Fresno State volleyball players Haley and Hanna Cavinder, there will be little more than some gas money for other, less visible college athletes.

About a third of student-athletes at NCAA Division 1 schools do not have a social media presence, according to a study by Thilo Kunkel, director of the Sports Industry Research Center at Temple University’s School of Sport, Tourism, Hospitality and Management. Among those that do maintain a social network profile, just 2-18% could make more than $5,000 per year by selling their rights.

Even high-profile athletes with more than 100,000 social media followers might not be ready for what companies will throw at them.

An education in marketing

Ricardo Fort oversaw global sports marketing for Coca-Cola and Visa during his career of nearly three decades before becoming a sports marketing consultant earlier this year. He’s seen athletes sign sponsorship deals at 15- and 16-years-old—and have no idea how to conduct interviews or deal with broadcasters.

However, he’s also seen his international brands interview athletes’ parents, scan their social media posts and watch them grow into better spokespeople over time.

“If you have to do a background check—and even at this young age, you can—you can find a lot of things [about] how they think, how they write, what kinds of things they engage with,” said Fort. “You’re never going to forget that they were teenagers a couple of years ago, so you should expect some mistakes.”

But that doesn’t mean that schools, brands, agents or marketing partners must send young athletes into the sponsorship world unprepared.

Cornwell notes that her university developed its Emerge program to help student athletes become better spokespeople and school ambassadors. The University of Texas’ Amplify program takes a similar approach, and is one of several popping up at schools throughout the NCAA.

Looking back at his time at Visa, Fort noted that the company offered young athletes a brand orientation session in San Francisco as well as took them to Facebook, YouTube and Twitter headquarters and offered sessions with media coaches.

But even all of that training may not keep an athlete out of trouble.

Avoiding conflicts

Many universities won’t allow students to promote gambling, tobacco, alcohol or other products students may not be able to purchase legally (including firearms).

“It’s kind of a shiny toy—they sign up, they get paid and think, ‘This is really, really cool.’ But they also have to be really careful about what they are representing,” said Greg Via, who spent 14 years as vice president of sports marketing for Procter & Gamble before parting ways with the company this year.

“They want to make sure it’s true to themselves [and] it’s true to their families. It’s not just about taking the money, because that stuff lives and it’s going to be around for a long time.”

OpenSponsorship’s Anand pointed out that other conflicts, like school sponsorships, also come into play.

If a school has a hospital, for example, certain healthcare sponsorships may be off the table. As a result, her firm is compiling databases of not only school sponsor restrictions, but conference rules and state laws that may cause a student more harm than their Instagram post of unboxing a CBD bath bomb was worth.

“If you do it and you lose eligibility because of a social media post where you got paid $300, you’re going to be pretty cut up,” Anand said. “So there’s quite a lot for us to think about as a marketplace.”

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