The NIL "Shakeout" Phase Has Begun

The Industry Lifecycle

An industry “lifecycle” is a model that describes the evolution of a business sector over time, from its inception to its eventual decline (Yes, someday NIL will be gone - i know for some of you that won’t come soon enough 🙄.)

Understanding where NIL is in its lifecycle is important for universities, student-athletes, brands, and service providers to be able to navigate the challenges and opportunities that arise at each stage.

So let’s do a 4 minute mini-class on lifecycles and NIL.

ew industries emerge usually based on one of three factors:

  • Technology breakthroughs

  • Shifts in consumer behavior

  • Regulatory changes

You don’t get any bigger regulatory change than a Supreme Court ruling. And the Court’s decision in NCAA v. Alston (The Court held that the NCAA's restrictions on education-related benefits for student-athletes violated antitrust law.)

While the Alston decision didn't directly create the NIL industry, it served as the catalyst that unleashed the forces that led to the NIL Gold Rush.

Like in any industry Gold Rush, there was a wave of excitement and optimism. The potential for profits and disruption attracted entrepreneurs, investors, and established companies seeking to capitalize on the nascent market.

New companies entered the market, mostly copy-cats of each other, but some with a unique vision and approach. Most attack with a first-mover advantage mentality, hoping to capture a significant market share.

The pressure to be first often led to some hasty decisions and a focus on short-term gains…

Universities scrambled to establish NIL programs, often reacting to the actions of their closest competitors. Some invested heavily in infrastructure and personnel that today seem unlikely to be part of a long-term strategy.

Collectives sprang up overnight, promising big payouts and exclusive opportunities. Concerns about sustainability and compliance arrived just as fast.

A multitude of NIL Marketplaces flooded the market, each vying for athletes and brands. Competition has been fierce and many platforms have struggled to gain traction.

Brands - both “challenger” (underdogs fighting the market leader) and local - rushed into NIL deals, often without a clear strategy or plan for athlete activation.

Professional Service Providers, including agents, attorneys, and financial advisors flocked to the NIL space, eager to capitalize on the new opportunities. Uncertified “NIL Agents” offered services without adequate expertise or experience.

Some student-athletes were quick to sign deals, often prioritizing short-term gains over long-term value.

The Shakeout Has Begun

The journey of a new industry is rarely smooth sailing. After the initial excitement and frenzy usually comes a period of turbulence, known as the shakeout.

The shakeout phase is a critical juncture in an industry's evolution. It’s harsh, but necessary. The initial hype gives way to the realities of building a profitable or successful operation in a crowded space.

The pressure to stand out intensifies, and companies that fail to carve a unique niche or offer compelling value often struggle to survive. The market consolidates as weaker players are absorbed or exit the scene, leaving behind a smaller group of stronger, more resilient companies.

A few very recent examples that we are in NIL’s shakeout phase…

Collectives are folding & merging; Last week Alabama’s Walk of Champions has shuttered (The Yea Alabama Collective remains.)

NIL’s largest Marketplace and most visible Consulting agency made major changes in the past month; Altius has a new CEO and Opendorse does too.

Universities are now adopting a more measured approach, focusing on NIL education and sustainable strategies.

Brands are continuing to enter the market, including those with long resumes as sports sponsors; Jordan brand just signed its first football athletes.

The professional service landscape is similarly maturing, with more and more reputable providers offering specialized expertise to help athletes navigate the complexities of NIL.

The Final Phase: The Emergence of Leaders

How long will it be before we reach the final “Emergence of Leaders” phase of NIL?

Well, it depends on… [subscribe to NIL/edu to unlock the rest.]

NIL/edu is a reader-supported publication. Become a paying subscriber for $5 per month to get access to this edition, 4 newsletters per month, and all past subscriber-only content.

The Final Phase: The Emergence of Leaders

How long will it be before we reach the final “Emergence of Leaders” phase of NIL?

Well, it depends on…

  • Regulation: There will be more and ongoing regulatory developments. This makes it difficult to compare NIL’s trajectory to more established industries with well-defined lifecycles.

  • External Factors: The NIL landscape is influenced by external forces such as NCAA regulations and broader economic conditions. These factors can accelerate or delay the maturation process.

  • Technological Advancements: New technologies and platforms could disrupt the industry and create new opportunities for growth and innovation.

I think NIL’s final stage may be 2 years away - or even 5 years away, but when we get there, we can expect a host of positive developments:

For Athletic Departments

  • Streamlined NIL Infrastructure: More efficient systems and processes for NIL education, compliance, and deal facilitation.

  • Stronger Partnerships with Collectives: Collaborative relationships built on transparency and mutual benefit.

  • Increased Revenue Generation: Potential for new revenue streams through strategic NIL partnerships and initiatives.

For NIL Collectives

  • Sustainable Business Models: Financially stable collectives focused on long-term athlete development and community engagement.

  • Transparent Operations: Clear communication and ethical practices, fostering trust with donors and athletes.

  • Impactful Community Initiatives: Collectives playing an active role in supporting local causes and initiatives.

For Brands

  • Measurable ROI: Brands focusing on data-driven NIL campaigns that deliver clear return on investment.

  • Authentic Partnerships: Long-term relationships built on shared values and genuine connections with athletes.

  • Innovative Activations: Creative and engaging NIL campaigns that resonate with consumers and drive brand loyalty.

For Student-Athletes

  • Education: Athletes equipped with the knowledge and resources to make informed NIL decisions.

  • Long-Term Brand Building: Athletes focusing on building sustainable personal brands that extend beyond their playing careers.

  • Career Development: NIL opportunities providing valuable real-world experience and networking opportunities.

For Professional Service Providers

  • Specialized Expertise: Experienced professionals offering tailored guidance and support to athletes and brands.

  • Ethical Practices: Transparent fee structures and a commitment to acting in the best interests of their clients.

  • Industry Collaboration: Collaboration among service providers to establish best practices and promote athlete well-being.

Overall, the final phase of NIL promises a more stable, mature, and sustainable landscape.

About Bill Carter

Bill has advised brands on Name, Image, Likeness for 25 years—first in pro sports, now at the college level. He was the Co-Founder of the Gen Z sports agency Fuse, which he sold in 2019. In 2020, he founded Student-Athlete Insights and consults on NIL strategy with Fortune 500 companies and 30+ DI universities. Read more about Student-Athlete Insights.

Bill Carter