Student-Athletes Just Became a $2 Billion Consumer Segment

Student-Athletes will now have earning & spending power

By now, you probably know that the NCAA reached a historic settlement with former college athletes who filed an antitrust class action lawsuit - the centerpiece of which is a new revenue sharing model.

In brand marketing circles, the news of that revenue sharing created as much buzz as the NIL announcement by the NCAA in the summer of 2021.

Starting as early as Fall 2025, a revenue-sharing model will be implemented between the Power Five conference schools (ACC, Big Ten, Big 12, Pac-12, and SEC) and their student-athletes.

To be clear, revenue sharing is not the same as NIL, but it’s important because it will comprise (at least initially) about half of the revenue pouring into a new consumer segment comprised of college student-athletes.

According to the Associated Press, NCAA President Charlie Baker estimates $1 billion to $1.5 billion in revenue (from media rights, ticket sales, sponsorships and licensing, the NCAA, and potentially other sources) will go to student-athletes annually.

The other half of the revenue going to student-athletes is NIL. Opendorse and others have reported $1.17 billion in yearly NIL transactions. Given the thousands of transactions that go unreported, $1.17B is probably low.

Combine the rev share and NIL transactions together and the result is $2.42 billion - yearly in the hands of student-athletes.

Here’s what happens next

When a new consumer segment is born, brands respond.

Some examples of U.S. consumer segments that are estimated to have approximately $2 billion in annual spending power include Vegan Consumers, Luxury Pet Owners, and Outdoor Enthusiasts (e.g., hiking, camping, skiing, cycling.)

How brands respond to new consumer segments is predictable. One of the most notable cases in recent years occurred with the emergence of the “gig worker” (the workforce of people engaged in freelance or side-hustle work.)

Brands quickly identified this new segment and adapted their products and services to cater to their specific needs. They did so in three steps:

1. Brands studied the gig workers. They did market research to reveal key characteristics of this segment, including:

  • Demographics: Predominantly Millennials and Gen Z, with a growing number of older adults seeking supplemental income.

  • Psychographics: Valued autonomy, flexibility, and work-life balance.

  • Needs: Faced challenges like inconsistent income, lack of benefits, and isolation.

  • Aspirations: Sought professional growth, financial stability, and control over their schedules.

2. Brands developed tailored products and services, including:

  • Financial Services: Fintech companies like Stripe and Square introduced simplified payment processing solutions for freelancers and independent contractors.

  • Insurance: Companies like Stride Health and Bunker partnered with platforms like Uber and Lyft to offer affordable health insurance and other benefits to gig workers.

  • Project Management Tools: Platforms like Asana and Trello streamlined project management and collaboration for teams working remotely or on a project basis.

3. Then brands created targeted marketing that focused on:

  • …the gig workers' values and aspirations

  • … the freedom and control that gig work offers over traditional employment.

  • …and building Community to foster a sense of belonging among gig workers.

Now that the college student-athlete consumer segment has emerged. Brands will respond.

What CMO’s told me they plan to do to reach student-athletes

I spent over 20 years in brand marketing. After news of the settlement broke, I spoke with more than a dozen CMO’s. Here’s what those in Financial Services, Automotive, Real Estate, and Travel & Hospitality told me will likely happen in their industries (and within their own companies) to target college student-athletes:

Financial Services

A CMO in financial services told me that she predicts that her industry will focus on:

  • Workshops and Seminars: Offering workshops and seminars specifically tailored to student-athletes, covering topics like budgeting, saving, investing, and tax planning.

  • Online Resources and Tools: Developing online courses, interactive tools, and educational materials that address the unique financial challenges and opportunities faced by student-athletes. This will could include budgeting calculators, investment simulators, and tax guides.

  • Personalized Financial Coaching: Providing one-on-one financial coaching to help student-athletes create personalized financial plans, set goals, and make informed decisions about their money.

  • Investment Portfolios: Creating investment portfolios tailored to the risk tolerance and financial goals of young athletes. This might include diversified portfolios of stocks, bonds, and other assets, as well as opportunities to invest in startups and sports-related ventures.

  • Specialized Tax Services: Offering tax preparation and consulting services specifically for student-athletes, who may have complex tax situations due to income from various sources, including revenue sharing, NIL deals, scholarships, and part-time jobs.

Automotive Industry

A marketing executive in the auto industry told me that her industry can adapt their offerings in a number of ways:

  • Success and Performance: Manufacturers may consider aligning their brand image with “dedication, perseverance, and peak performance,” showcasing vehicles as a reward for hard work and a symbol of achievement.

  • Lifestyle and Image: Marketing campaigns may feature student-athletes in dynamic settings, enjoying the freedom and status their vehicles provide. This creates an aspirational image, associating the brand with success, confidence, and a desirable lifestyle.

  • Exclusive Programs: Brands might offer special pricing, lease terms, or financing options specifically for student-athletes. This demonstrates recognition of their unique financial situation and creates a sense of exclusivity.

  • Luxury Appeal: While not all student-athletes will be “luxury” vehicle shoppers, high-end models may still be marketed to them, signifying a reward for hard work and a symbol of status.

  • Sponsorship of College Sports: Brands may double-down on supporting college athletic programs through sponsorships to demonstrate a their commitment to student-athletes and foster goodwill within the community.

Real estate companies

According to one real estate CMO, here's a deeper look into how the real estate industry might cater to the new consumer segment of student-athletes with increased earning power:

  • Exclusive Listings: Offer exclusive listings for student-athletes, including apartments, condos, or houses near campus that meet specific criteria such as proximity to athletic facilities, security, and amenities (even private training spaces within housing complexes to cater to the unique needs of student-athletes.)

  • Preferred Agent Programs: Establish preferred agent programs with real estate professionals who specialize in working with student-athletes. These agents would provide personalized guidance on property selection, financing, and lease negotiations.

  • Educational Workshops: Offer workshops or webinars for student-athletes on topics like buying vs. renting, financial planning for homeownership, and understanding the real estate market.

  • Community Building: Create opportunities for student-athletes to connect with each other through shared amenities like communal lounges, game rooms, or outdoor spaces.

  • Short-Term Leases: Offer flexible lease terms that align with the academic calendar or athletic seasons, allowing student-athletes to adjust their housing arrangements as needed.

  • Targeted Advertising: Utilize social media platforms, campus publications, and athletic department channels to reach student-athletes directly with tailored messaging and athlete testimonials.

Travel and hospitality companies

A travel industry CMO told me that the travel and hospitality industry has a unique opportunity to cater to college student-athletes. Here's how they can adapt their offerings:

Airlines

  • Flexible Booking and Cancellation: Student-athletes often have unpredictable schedules due to practices, games, and tournaments. Airlines could offer flexible booking options with waived change fees or credits for future travel to accommodate their needs.

  • Sports Equipment Allowance: Airlines might consider offering a higher baggage allowance or discounted rates for sports equipment like skis, golf clubs, or bicycles, which student-athletes often need to travel with for training or competitions.

  • In-flight Amenities: Airlines may partner with sports nutrition brands to offer healthy snacks or meals on flights, catering to athletes' dietary needs.

Hotels

  • Training and Recovery Facilities: Offer fitness centers, swimming pools, or other athletic facilities that cater to student-athletes' training needs.

  • Healthy Dining Options: Provide menus with nutritious and performance-enhancing meals that align with athletes' dietary requirements.

  • Sports Massage and Therapy: Offer on-site sports massage or physical therapy services to help athletes recover from training or competitions.

  • Late Check-Out Options: Accommodate late-night arrivals or early-morning departures due to game schedules.

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