Blog Post

WILL NIL REALLY BECOME A THING IN SPONSORSHIP?

There’s been a constant buzz in the college sports world over name, image, and likeness (“NIL”) since July 1. The recent decision by the NCAA Division 1 Council has launched a new era in athlete endorsements. The long-simmering debate over college athlete NIL has de facto ended. College athletes may now engage in sponsorship activities related to their NIL.

Clients and colleagues have asked whether NIL will really change the game in sponsorship. My answer has been a consistent, “Sort of. But, Not Really.”

Probably several dozen (or less) college athletes truly have the brand power to attract a national endorsement deal at the dollar amounts garnered by pro athletes. There are simply too many athletes at too many schools. Few athletes have enough sustained national attention to help consumer brands on a national scale. For this reason, endorsements will cover regional and local markets, with most deals targeting college alumni audiences.

Based on our experience in personal branding, endorsements, and sponsorships, we see the new era of NIL playing out in three phases.

PHASE 1: Euphoria

We have already seen young college athletes create new personal logos and rush to hang up their “brands for sale” signs. There’s euphoria over the theoretical opportunities to cash in on personal brands.

If an athlete has a national brand presence, we’ll see a few noteworthy deals with consumer products brands. However, most of the endorsements will be regional and local. It will take the rest of 2021 and early 2022 to see if there’s any real return on investment for the companies that take the dive into this new market.

I sense that most (all?) deals will be sold on the back of impressive social media audiences. For instance, Fresno State basketball players Haley and Hanna Cavinder recently signed agreements with Boost Mobile and others. However, they bring their 3.4 million TikTok followers with them. Are endorsers buying the Cavinder brand or an impressive social media audience? It’s hard to tell at this point.

PHASE 2: Level Setting

When college sports kick off this Fall, brands and athletes will continue to sign deals that reflect the athlete’s regional notoriety. Without a championship-caliber Instagram following, athlete brands will attract four and five-figure endorsements.

Athletes will begin to understand what really powers a personal brand: an audience. Since athletes cannot use the logo and name of their university without permission, each athlete must resonate with an audience without the power of their school behind them. The fundamental question is this:  Can an athlete, with only their name, image, and likeness, move consumers to buy goods and services for endorsing companies? Few college athletes can carry this off with so little time to build powerful personal brands. In my experience, I’ve found that few professional athletes can make this kind of magic happen.

At the same time, brands will develop good data about whether NIL can move the needle for them. Likely, less than one percent of the 400,000 NCAA athletes can muster product and service-selling brand power.  As a result, the market will begin to level set on the low side.

PHASE 3: Stuff Gets Real

If athletes get frustrated with the lack of endorsement sales, they may be tempted to cross the legal and ethical lines regarding intellectual property use. Perhaps their Twitter feed shows them in full school team uniform. Maybe their new personal logo looks a little too much like the school’s intellectual property. When it comes to money, athletic departments and their athletes may not see eye to eye.

Unfortunately, Phase 3 of NIL will likely see disputes break out. While this happens in the professional athlete market, it would be a shame to see college athletes spending a portion of their four-year careers haggling over IP and cease-and-desist letters.

Final Thoughts for Future Phases

I hope that colleges and their athletes find a way for everyone to equitably participate in the mega-business that college sports have become. Many professional sports have been able to balance the economic interests of leagues, teams, and players. At this point, it would benefit everyone to start this process. The alternative will be a disappointing lesson in the difficultly of monetizing personal brands.

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