Dear Everyone, Please Stop Calling Donor-Funded Collective Payments “NIL”

Before diving into this, I want to make one point abundantly clear: I wholeheartedly believe that revenue-generating college athletes should be paid and paid well.?

And the free market clearly agrees.

Over the past two years, we’ve seen numerous groups, known as “collectives”, emerge with the primary goal of compensating top athletes at their respective universities under the guise of “NIL”. This trend has proven a truth that the NCAA has relentlessly tried to downplay for decades: many college athletes have a market value that far exceeds their scholarship.

These collectives are typically founded and led by prominent supporters of the university and primarily pay their athletes using funds raised through donations. Now, if you know the NCAA’s history with boosters, you likely find how this has all played out as amusing as I do.

For decades and despite the NCAA’s rules, boosters have been compensating college athletes under the table. A McDonald’s bag full of cash here. A car delivered to an auntie over there.? Most organizations would recognize this recurring issue as an indicator that there was a misalignment between current compensation (scholarship) and actual market value. Most organizations would look at their inability to successfully enforce their rules as a sign to modernize their business model and develop a compensation model that aligns more closely with market value. But not the NCAA. They doubled down. Tripled down. Quadrupled down. The NCAA has spent the last 40+ years doing everything in their power, including spending hundreds of millions of dollars lobbying our government, to not have to compensate any athletes beyond their scholarship.??

Now, in the era of NIL, the very group that the NCAA has struggled to regulate for decades are the ones founding and running most of these collectives. Boosters are more empowered than ever, and the NCAA hasn’t really been able to do anything about it.?

Oh, if this isn’t the consequences of the NCAA’s own (in)actions.

But I digress. This isn’t an article about all of that.?

What I want to address is how labeling these donor-funded collective payments as “NIL” (and including them in NIL valuations) is having a negative impact on the commercial NIL market, resulting in less opportunities for athletes, schools starting to cut NIL resources, and is overall leading us down a road where NIL may be nothing more than retention payments for revenue-generating athletes and national brands partnering with high-profile influencer athletes.

The Value of NIL Brand Partnerships

Maybe I’ve drunk the NIL koolaid. Perhaps surrounding myself with NIL advocates, aka the admins and service providers who really believe in this, has created an echo chamber of sorts. But man, do I really believe that it’s going to be a damn shame if a real commercial NIL market never develops the way I believe it could and should.?

First and foremost, athletes who engage in commercial NIL partnerships gain more than just monetary compensation. They develop professional skills, expand their networks, enhance their resumes, and experience personal growth. Depending on their field of study, NIL can even improve their understanding of classroom material by providing practical applications.

Through NIL, these young adults learn about marketing, sales, branding, negotiation, finances, contracts, and more. They make valuable business connections that can lead to full-time job offers after graduation. They discover their personal identities outside of being athletes, all while learning through hands-on experience.

For small businesses, NIL initiatives provide an affordable sports marketing opportunity and an ability to reach an engaged and hyper-local audience. Through working with college athletes, they can also gain strategic insights into the valuable yet hard-to-reach young adult demographic.?

Universities can see benefits as well. Already, we’ve seen local businesses have successful campaigns with a school’s athletes and then expand their sports marketing efforts into a corporate sponsorship. Additionally, a high volume of recurring commercial NIL opportunities may reduce a school’s reliance on their donors to fund both their athletic department and their collective’s “NIL” payments.

And finally, and what really excites me, is that there are early indications that NIL is increasing interest in professional sports leagues, particularly in women’s sports. More fans translates to revenue growth and higher compensation for the athletes (you know, since they no longer have that pesky amateurism status preventing them from reaping the benefits of their sport growing in popularity). This would be HUGE for women’s sports.

The Problem with Calling Collective Payments “NIL”

The vast majority of coverage on “NIL” revolves around collective payments, often featuring stories like “every scholarship athlete gets a truck”, “this high school athlete has a 7-figure NIL valuation”, and “P5 collectives need to raise $Xm/year to keep their university competitive”.?

It’s easy to see why these stories get so much attention. They involve substantial sums of money, feature high-profile athletes, and often carry a controversial or boundary-pushing element, making them highly engaging content.

So, what’s the issue?

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