The NIL Market Is About to Take Off
The floor has been raised for player values, and that means the ceiling is going to rise too.
The NIL revenue-sharing era has forced schools to get involved in NIL in a way that they otherwise would have never intended. Within the last year in football, you probably had about 20 schools paying $20.5 million or more to their football team alone. You probably had about 25 schools that were paying between $10 million and $20.5 million, and you probably had another 25 schools between $5 million and $10 million. Now schools are being forced into injecting more funds into their NIL compensation and competitiveness.
So schools will now be fortifying themselves more against foes poaching their talent, and schools will increasingly be weaponizing their dollars to recruit players from other schools. The elite schools and programs will continue to drive the price up for elite players (as has been seen in ongoing offer values climbing). The Power 4 elite weren’t going to infuse tens of millions of dollars into their roster prior to the rev-share cap era unless they expected both competition AND a need to be able to maximally compensate their roster. If there was limited demand and limited funds available, no such money would have been infused.
But the floor for player values is going to rise as well. There is less time available for programs to develop players. That means that college-ready players are going to come at a premium in all sports. You are starting to see players transfer anywhere for a little bit of money. A second-team All-WCC outfielder, born and raised in California, attending a California school, transferred all the way across the country to play for the national championship runner-up Coastal Carolina this coming season. The WCC only had two teams with a winning record, and the league record as a whole was a combined 205–274. It was a weak league. And Coastal Carolina paid for a second-team all-league player from that conference to change programs.
There is going to be an increased need to have increased funds for schools everywhere. Hundreds of millions of dollars have been infused by force, insistence, decision, compulsion, or whatever other means it arrived—but it doesn’t really matter. Schools are conservative by nature, but after all of this conference realignment, and obsession over NIL, and wild recruiting sagas, schools have mostly decided that they are going to give NIL a shot. I expect that some schools will reduce their involvement and financial exposure in the coming years as they wait out tired coach contracts and underwhelming performances. As they say in Las Vegas, you shouldn’t throw good money after bad.
Projections continue to be outpaced by actual investment into NIL. Most Power 4 schools are experiencing windfalls of cash from media rights deals like never before. Schools are also raising ticket prices, raising student fees, raising luxury box pricing, re-opening naming rights opportunities, and canvassing the college athletics landscape for new revenue opportunities that were either undesired or unknown previously. Some schools didn’t run raffles, but now they might. Some schools don’t have advertising in stadiums, but now they might. You get the picture. And of course, the NCAA and Power 4 conferences are going to allow more games, more advertising, larger playoffs—whatever they can do to generate more revenue.
Amateur sports are going pro whether or not anyone wants to admit it. Darren Heitner, Mit Winter, and many other leading legal voices in the NIL space continue to remark on the “employee-like” contracts being forced upon athletes by the schools with whom they are seeking playing opportunities. If you think player values will stabilize or decrease, I have solar panels, pest control services, a constellation, QVC products, multi-level marketing products, or any other number of gimmicky services that I’d love for you to buy.