Despite the Attention, NIL Has Yet to Have Its Moment
This content first appeared in NIL Corner, my monthly column in Sports Business Journal.
Read time: 2.5 minutes
A reporter asked me last week, “What do you make of NIL’s explosive growth?” I think he was disappointed when I answered that I don’t think it’s happened yet.
What has made NIL get off to a good start
Sponsor United recently reported that NIL activity rose 146% last year, resulting in nearly 2,000 deals. That’s a good start.
The factors that have contributed to the development of NIL are not unlike other new marketplaces.
A change in regulations - in this case the adoption of the NCAA’s NIL interim policy - was what initiated this marketplace.
Quickly then, came technological advancements. These were mainly the development of two-sided online exchanges where brands and student-athletes could engage.
Entrepreneurship has played a key role in the development of the NIL ecosystem too. For example, prior to Summer of 2021, nobody had ever conceived of an NIL “collective,” yet today there are over 200 booster-led entities providing NIL opportunities to their institution’s student-athletes.
Why I think NIL has much more growth ahead
I think there is considerable room for NIL to grow. Especially, when considering two factors that have impeded its flourishing to this point.
First, there has yet to be a serious “network effect.” The size of the NIL marketplace is increasing, but we’ve yet to see the self-reinforcing cycle, where the more brands there are, the more student-athletes will participate, and vice versa. On some campuses, NIL participation is below 10%, while on others, it’s 40%+.
Second, there continues to be a lack of belief in and a distrust of NIL by key cohorts. In the Fall of 2021, I did a poll that found around 70% of coaches and administrators disapproved of NIL. Support for NIL among this group has improved, but today still sits at only about 45%. When coaches and administrators don’t believe in NIL, they are less likely to educate and support student-athletes to participate.
Some of the solutions to both of these challenges lie in education:
* Brands have few solutions to learn about best practices and successes of others who entered NIL early and are seeing positive ROI.
* Student-Athletes remain largely in the dark when it comes to understanding all of the opportunities that NIL affords, especially those that fall outside of traditional endorsements and social media influencer work.
* Coaches and administrators have been hesitant, but in time, I think will see that the NIL bogeyman of locker room jealousy and team disruption have proven to be unfounded (here’s some data on that if you’re interested)
When these things happen, we will see NIL grow even faster
In addition to the continued education of the NIL ecosystem, even faster growth will occur when these things occur:
Investment: Investment in infrastructure and technology will help NIL to grow quickly. News of INFLCR’s ($65 million) and Opendorse’s ($20 million) recent fundraising is a good sign.
Unique Value Proposition: I’m trying to be kind here - I could have called this “needed consolidation.” There are likely too many startups doing much of the same thing in the NIL ecosystem. Unless they develop a unique value proposition or consolidate, many will likely fail.
Marketing and Publicity: Better consumer-facing marketing and publicity would help NIL. In a recent poll by Morning Consult, “fewer than 1 in 5 U.S. adults had seen, read or heard about any of the 10 recent Division I NIL deals.”
Strategic Partnerships: Strategic partnerships will help the NIL ecosystem grow. The recent news about a partnership that combines MOGL’s tech with NBC Sports Athlete Direct’s breadth is a welcome addition.
Don’t get me wrong. I’m as excited about NIL as anybody, but to summarize where we are, I’ll borrow a couple of cliches: we may be experiencing NIL’s “gold rush,” but its “golden age” is still to come.
Whenever you're ready, there are 3 ways I can help you:
1. If you're looking for a deep dive into NIL, consider applying to the next session of the NIL/mba program. This course is a master’s level, intensive education built from my NIL course at the University of Vermont, my NIL Workshops, and Student-Athlete Insights’ research. It’s for anyone committed to learning, creating, or capitalizing on NIL - including university staff, student-athletes & parents, brands & sports organizations, and others. Apply and read more here.
2. If you’re looking to get educated on NIL quickly, I recommend contacting me to schedule an NIL Workshop. These 1 hour live Zooms are intended for small groups and are customized for your audience, whether that means brands, sports organizations, coaches & administrators, and more. Read more here.
3. If you are looking for a low cost, on-demand option to learn about NIL, check out this suite of video courses at https://studentathleteinsights.thinkific.com
Bill Carter is an NIL Consultant, Educator, and Speaker. He is a NIL Columnist for Sports Business Journal and teaches NIL in College Sports at the University of Vermont’s Grossman School of Business. Click here to read about Bill’s NIL Consulting and NIL Education for sports organizations, universities, and brands.