Who Really Profits From NIL Deals?

This year's NCAA Tournament offered a glimpse at the future of name, image and likeness (NIL) deals in college sports. Though Kansas won the tournament, Saint Peter’s guard Doug Edert, who had 20 points off the bench in the tournament darling’s upset of Kentucky, ended up with a shining NIL moment. Thanks to his performance—and a mustache that would make Tom Selleck blush—Edert’s profile instantly rose on social media, and he secured NIL deals with Buffalo Wild Wings and Barstool Sports. The agreements, which occurred within a week of the game, highlighted how ravenous brands are to sign student-athletes, and the value of players' real-time performance, after state laws and NCAA rule changes went into effect in July 2021 that cleared the way for student-athletes to profit off their name, image and likeness by partnering with brands or starting their own businesses. In the first year college athletes could profit from NIL, brands were projected to spend $579 million, according to Front Office Sports. But the alacrity of brand alliances with student sports stars in the early era of NIL begs two questions: What is the benefit of these arrangements, and who stands to gain the most? Experts say both sides can win in an NIL deal, but factors like how athletes engage with their audience on social media and where they play can determine who's really profiting. The new school For brands, NIL deals are always going to revolve around ROI. College athletes offer a chance to reach the coveted Gen Z demographic as well as hyperlocal markets, such as college towns where student-athletes have a strong bond with the community. Most college athletes are also a cheaper alternative to pros, who typically command more lucrative endorsement deals on a national scale, said Blake Lawrence, CEO of athlete marketing platform Opendorse. The key to reaching those audiences for athletes is engaging with their followers and posting sponsored content in an organic way that’s consistent with how they typically post, according to Harry Poole, vice president of marketing solutions at Excel Sports Management. Premium Exposure The 2022 edition of the NCAA Tournament averaged 10.7 million total viewers and a 17.0 share (percentage of households or viewers who were watching television at that time) for its 67 live telecasts, a figure that rose 13% from last year and was the highest since 1994. In Saint Peter's upset of Kentucky, CBS averaged a 3.1 rating and 5.46 million viewers, making it the third-most-watched opening round game of the tournament since 2015. That high-profile game surely impacted Edert's rise to fame and paved the way for his NIL deals. “It doesn't matter how many followers an athlete has or how good they are,” Poole said. “If they aren't a natural and authentic content creator, then the deal is not going to be as impactful for the brand [or] for the athletes.” Rita Patel, CMO of Buffalo Wild Wings, which signed four athletes—including Edert—to promote its “Overtime Wingtime” campaign on social media during March Madness games that went into overtime, said timeliness was a critical factor. “We didn’t want to do deals just for the sake of doing deals,” Patel said. “They needed to solve a brand challenge, and for our March Madness deals, that was to strengthen our equity in overtime.” A door opens for women's sports stars Women athletes have also made strides in the first year of NIL, though brands have devoted nearly three-quarters (72.6%) of total NIL compensation to men's sports, per Opendorse. Connecticut point guard Paige Bueckers signed deals to create content for StockX, Gatorade and education technology company Chegg, for example, and Oregon forward Sedona Prince signed on with Champs Sports x Eastbay, coffee and energy drink brand Riff, and insurance company TIAA. But despite such individual successes, Gonzaga University professor of marketing Peggy Sue Loroz pointed out, there's still a wide gap in coverage of women’s college sports compared to men's, which impacts women’s potential earnings. "[NIL] is an opportunity,” Loroz said, “but I hope it will not only allow some female student athletes to have another opportunity to earn income and use their influence for impact, but that some of those high-profile student-athletes who are getting NIL attention also help draw eyes to women's sports.” Though he didn't share specific figures, Lawrence said the average compensation for NIL deals has increased since brands and student-athletes started working together last July. But while only a few athletes are reportedly making more than five figures in NIL deals, they can be worth millions to a brand, said Lawrence, who pointed to H&R Block’s “A Fair Shot” campaign, in which it committed $1 million in sponsorships and support for women college athletes. He said brands were initially slow to move at scale with national campaigns last year, but they began to pick up steam during the college basketball season. And he expects major sporting events, such as college football bowl games, to open up similar on-the-fly NIL opportunities for brands and athletes. "More national advertisers will likely integrate student-athletes into national advertising campaigns as we go into the second year of NIL," he said.

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NIL's Freshman Year: Who's Really Profiting From the Marketing of College Sports Stars?

Student-athletes offer brand partners a potentially higher ROI—but there are lessons still to be learned about how to make these deals a win-win

Rafael Canton

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Rafael Canton