Short Answers to NIL's 5 Most Frequently Asked Questions
Name, Image, Likeness Insider uses proprietary data and expert insights to explain the latest NIL developments.
Short Answers to NIL's 5 Most FAQ's
Those who know me know that I track EVERYTHING I can when it comes to NIL. Typically that means the monthly large scale surveys I do of up to 5,000 student-athletes about their NIL experience. But prior to Student-Athlete Insights when for 20+ years I managed a sports marketing agency, I learned time and time again that valuable data comes from various and sometimes unexpected sources.
One of those sources for me now are 1) the inquiries I receive every single day through my website, 2) daily email inquiries, and 3) the Q&A at the end of the 2-3 NIL Workshops I do weekly. The questions come from five main groups:
College Student-Athletes
Parents (High School and College)
Coaches (High School and College)
Administrators (High School and College)
Sport Organization Executives
Why do I think the monitoring of these questions is valuable? Because after 15 months of NIL, they are a barometer of what people know - and still don’t know - about NIL.
So here it goes, NIL's 5 most frequently asked questions and a short answer to each.
what’s an nil marketplace?
What’s an NIL Marketplace?
An NIL marketplace is a 2-sided online platform. One one side of the platform are the “sellers” made up of student-athletes. On the other side of the marketplace are the brands or "buyers.”
The marketplace allows these entities to come together, meet, negotiate, and ultimately agree on a deal for the student-athlete to perform an NIL activity.
HOW MUCH money do student-athletes really MAKE?
How much money do student-athletes really make?
The answer depends on who those student-athletes are, what sport they play, and where the money is coming from. But let’s clarify some some things.
According to the NIL marketplace Opendorse, in year 1 of NIL, the average compensation for college student-athletes on their platform was about $1,300 per NIL deal. I have no doubt that their data is accurate, but data like this may be misleading due to very large deals by a handful of student-athletes.
A better or at least far more conservative way to project what you might make through NIL is to consider median compensation. As a reminder, the median is the middle number in a sorted list of numbers and can often be a better representation of the data than the average.
In numerous surveys I've conducted, the media compensation for student-athletes is about $65 per activity.
WHAT’S A COLLECTIVE?
What’s a Collective?
Collectives are third party for-profit or non-profit business entities created by a school’s alumni/boosters to guarantee financial opportunities for student-athletes. The NIL opportunities vary in how they will be executed, but are in essence to promote a brand or in support of non-profit.
At the one year anniversary of NIL, it was believed that there were about 120 Collectives. The number grows and contracts each month as new Collectives launch, while others that support the same athletic department merge. All (or nearly all) of the Power Five schools have a Collective - and some have more than one.
WHAT’S AN NFT?
The sports industry is NFT-crazy at the moment and there is much more to an NFT than what I’m going to describe here. In the NIL context, NFT's are unique digital collectables that can be acquired by collectors.
Student-Athletes can create and sell NFTs to their fans. NFT’s are inexpensive and easy to create and market. They have the potential - but are not guaranteed - to generate long term revenue if the athlete grows in popularity and the NFT is resold.
If you want to dive deeper, check out this article called A beginner’s guide to NFTs by Linda Xie.
WHAT ABOUT TAXES AND NIL?
What about taxes and NIL?
Income from NIL activities is taxable, so a lot of the discussion is about the importance of setting aside a portion of NIL earnings to pay taxes owed. While I think that’s important, I often remind anyone who will listen of another concern: NIL earnings may impact a student-athlete’s need-based school, state, or federal financial aid or the Pell Grant.
Student-Athletes who earn NIL income should get the advice of an accountant to manage those earnings and seek advice from experts on the potential impact on their financial aid application.
Bill teaches NIL in College Sports at the University of Vermont’s Grossman School of Business. He consults with brands, universities, and sports organizations on Name, Image, and Likeness - and provides on-demand courses for parents, athletes, coaches & administrators. Bill’s a SportsBusiness Journal Forty Under 40 Award winner and former co-founder of the athlete & event marketing agency Fuse, which he operated for 20+ years before selling in 2019.