If Any of These 3 Trends Continue, NIL Will Look Much Different in the Future
Name, Image, Likeness Insider uses proprietary data and expert insights to explain the week’s NIL developments.
IF AMAZON DECIDES TO FLIP THE NIL SWITCH…
As quietly as a company who is responsible for about 40% of all online shopping can be, Amazon has begun testing the sales of officially licensed college merchandise - including the merch of student-athletes. Amazon already has a massive college footprint - including its Amazon Prime Student, Amazon Lockers, and other business units. In addition, it owns the Amazon Fashion brand, Mademark, which produces the apparel.
Amazon already sells collegiate apparel, but student-athlete-specific items could be added to the marketplace. The program test market/campus is at USC, where Amazon has signed student-athletes, starting with football player Latrell McCutchin and track athlete Bailey Lear, to promote the merchandise. For this test, the USC marketplace includes apparel including hundred of variations of T-shirts, sweatshirts, and tank tops.
Why It Matters: The first reason is scale. Because of Amazon’s infrastructure, there is no reason that hundreds, thousands, or even tens of thousands of student-athletes cannot have a digital Amazon locker from which they sell their own apparel, as well as select apparel of their school. While there are softwares and services make this possible for student-athletes already, they don’t begin to provide the scale that Amazon does. Many of us talk about the NIL as entrepreneurship and this Amazon endeavor could provide one of the first truly great entrepreneurial opportunities for student-athletes at scale.
The second this matters is speed. If the results of the USC test program support the business case (and I suspect that they will), Amazon could be a dominant figure in collegiate merchandise - and NIL - in a matter of weeks, not years. If you think that’s hyperbole, I’ve got a story for you: About 7 years ago, I was consulting on Amazon’s Prime Student business. One October morning on the way to a conference room on their Seattle campus, I passed through an office that held several dozen people - none of whom were affiliated with any of Amazon’s collegiate businesses. At around 4pm when my meetings were over, I backtracked through that same office, but it was now completely empty - no staff, no computers, no phones. I asked a young woman who was still packing up, what had happened (thinking the worst.) Her answer? The entire group had been notified that morning - without any prior notice - that an Amazon Locker test program had been a success on about 15 campuses. All 50 employees on her team had been relocated to another building to join an effort to get Amazon Lockers onto hundreds of campuses before the end of the year. It was a success and today it’s rare to be on any large campus that doesn’t have an Amazon Locker. But the bigger point is that Amazon steered about $7.5 million in salaries and over 100,000 in human hours in a single morning. When they decide to be a major player, the impact on NIL will happen at warp speed.
IF FANS and NOT BRANDS DRIVE NIL MARKETPLACES…
While the NIL headlines may be dominated with news of student-athletes, brands, and collectives, it’s college sports fans that are quietly becoming a major force in NIL. Recent examples of the expanding role of fans include:
Opendorse launched a new kind of online marketplace for fans who will soon be able to engage their favorite student-athletes directly. The Opendorse platform will allow autographs, personal appearances, and other NIL activities to be purchased by fans through its site.
NFT platform VerifiedInk is promoting itself as a way for fans to support the recruitment of high school athletes. (Despite what the NCAA has to say about NIL not to be used as a recruiting inducement, VerifiedInk’s website says, “Show your Fandom! Help your team land and keep top talent.”) Fans can buy a high school athlete’s NFT trading card and if the prospect decides to go to a program other than the one the fan selected, the fan can “burn” the NFT and receive a 100% credit to use on another NFT.
Player-led communities, like the recently established Ann Arbor NIL Club (which benefits Michigan football) are fan driven. Members of the football team provide fans with real-life experiences as well as digital content in exchange for fans’ monthly subscriptions.
Why It Matters: According to Student-Athlete Insights survey data, less than 10% of student-athletes have struck deals with fans. But as the definitions of digital platforms and collectives evolves, that percentage is likely to grow. Is this better or worse for NIL? Certainly innovations like the VerifiedInk platform make the NCAA’s goal of exposing potential recruiting violations more complicated. And it may be too early to tell if the beliefs and behavior of “average fans” are substantially different than those of wealthy donors. Either way, fans appear ready to play a major role in the future of NIL.
IF HIGH SCHOOL ASSOCIATIONS PERMIT NIL AT THE CURRENT PACE…
Jada Williams / Spalding
In the 13 months since NIL was approved by the NCAA, high school athletic associations in 17 states (including DC) have have begun to allow high school athletes to earn income through their name, image, and likeness. In the last several days, the high school athletic association in two more states - Iowa and Massachusetts - gave their approval to high school NIL.
Why It Matters: The momentum is on the side of high school NIL. According to Student-Athlete Insights survey data, 74% of high school prospects (those who intend to play in college) have an interest in NIL. Despite the position of the National Federation of State High School Associations (which hopes its constituents will not permit it), the state high school athletic associations and principals associations appear more willing to educate student-athletes rather than try to regulate NIL.
And the “math” is interesting too. Based on the current trend line, all 50 states and DC will approve high school NIL in the next 26 months - that’s by about December 2024! Of course there are many reasons that pace may slow down, but 100% acceptance of NIL at the high school school level within 2.5 years seems likely.
I consult with brands, agencies, and sports organizations on NIL and provide online/on-demand mini-courses for parents, athletes, coaches & administrators. I teach NIL in College Sports at the University of Vermont’s Grossman School of Business. I’m a SportsBusiness Journal Forty Under 40 Award winner and former co-founder of the marketing agency Fuse, which I operated for 20 years before selling in 2019.