“Mo Money Mo Problems”
And yes, we’re talking College Sports and NIL.
Notorious B.I.G.’s hit song, Mo Money Mo Problems, explores the theme of how increased wealth and success can bring about more challenges. The same is prevalent in the current landscape of college sports and NIL.
With notable college athletes inking massive brand deals based on their name, image and likeness, many have dubbed this current NIL scene the “Wild Wild West.” With a current lack of meaningful restrictions, changing recruiting practices, and transfer portal madness, NIL has completely turned the world of college sports upside down since its approval by the Supreme Court in 2021. It’s now three years later, and the big question is who out there is questioning the legitimacy, and staying power, of College Sports & NIL?
As a brand, you better not be. Heck, a major sports publication went “all in” with their October 2023 “THE MONEY ISSUE” with the Cover Story entitled “Generation NIL”. What are we - Strategic - now thinking about (and recommending to our clients) in terms of NIL best practices? Here are a couple considerations when dealing with college sports and NIL. It’s time to dig into Peter’s Playbook, Volume 6.
NON-REVENUE SPORTS DOESN’T MEAN NON-REVENUE ATHLETES
Many early NIL-skeptics once worried that the top tier “revenue” sports (football and men’s basketball) would dominate the NIL landscape, leaving little to no compensation for other athletes. As Lee Corso affectionately says, NOT SO FAST MY FRIEND! While football and men’s basketball drive the lion’s share of school (media & ticket) revenue, two of the top seven NIL athletes are women (LSU stars Olivia Dunne and Angel Reese) and five of the top ten sports - by NIL compensation - are women’s sports. (Sources: Opendorse and Yahoo Sports).
After accounting for (not surprisingly) football - who is the leader at 39% of total NIL activities - women’s volleyball, basketball, and track & field all share between 5%-7% each of the market, with women’s soccer at 4.5% and women’s gymnastics at 2.5%. (Source: Opendorse) It is quite clear that despite football’s stronghold as the compensation and activity leader, brands have continued to find STRONG value in “non-revenue driving” sports / athletes.
And, as NIL deals cannot be based on athletic performance, brands tend to favor athletes with a strong social media presence. The growth of social media - among women athletes - has quelled these concerns with women’s college basketball stars like Angel Reese, Paige Bueckers and Haley Van Lith engaging their millions of social media followers, making them ideal candidates for NIL deals.
So, while naysayers were originally concerned about NIL deals only benefiting men’s football and basketball athletes, one’s personal brand and social media following have become the true drivers behind many of these deals, evening the playing field and deriving value for a wider range of college athletes, both male and female. The bottom line? Look beyond the core men’s sports for impact. It’s not JUST about men’s football and basketball!
THINK LOCALLY. SCALE NATIONALLY.
Time and again, local NIL deals are proving to be King, and Queen, per se, as college sports fans - especially young fans - are more likely to purchase items attached to their favorite players, especially from a local brand. According to a recent report, over 20% of Gen Z has purchased a product as a result of following athletes. (Source: Deloitte).
Case in point, let’s first look at the Michael Penix x “Simply Seattle” NIL tie-in, which was rooted in his (and the team’s) success on the field and the brand’s locally-based audience off the field.
Here’s another. Pokes with a Purpose is Oklahoma State’s NIL collective. At its core, it is a platform that empowers athletes to leverage their NIL rights in a way that transcends traditional endorsements and sponsorships. This innovation leverages the latest technologies, including meta, artificial intelligence (AI), and blockchain, to pioneer a novel dimension of NIL. Athletes are not only encouraged to engage in philanthropic endeavors but also to create digital collectibles tied to their sports achievements and charitable contributions. These collectibles are authenticated and secured through blockchain technology, providing fans with rare and unique digital assets. Oklahoma State launched Pokes with a Purpose to offer unique digital assets for fans all over the world. However, it is no secret that the intention behind these NIL collectives is a paywall for college athletes and gives Oklahoma State the ability to compete on the field with the necessary talent to win. Since NIL started in 2021, Oklahoma State has competed in 2 out of 3 BIG12 Football Championship Games, including this past year led by transfer quarterback from Michigan (cough cough, NIL money) Alan Bowman.
The landscape of college sports has completely changed since the passing of the NIL bill in 2021. Despite the uncertainties and chaos, brands must recognize the immense potential in NIL partnerships. Navigating the “Wild Wild West” of NIL is essential for brands attempting to capitalize on the wide range of opportunities it can present. Just as Biggie's lyrics caution against the pitfalls of newfound wealth, so too does the NIL era demand a cautious yet opportunistic approach. At Strategic, we can help brands navigate through this new era of college sports spending and provide solutions rather than problems. Until next time …
