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Early NIL Deals: A Boon for College Athletes, A Meh for Most Brands

As even non-sports fans know by now, last Thursday was a banner day for collegiate athletes, marking the first time they were able to monetize their name, image and likeness rights without running afoul of the NCAA and risking their eligibility.

The impact of a new—and most would agree overdue—era in college sports for these young adults—especially those who are of color, women or from low-income backgrounds—cannot be overstated, even if the revenue most of the 460,000 eligible athletes will derive from NIL is in the four or low-five figures.

Doors also are now open to myriad small businesses that could benefit from an association with local college sports teams but were previously priced out of the market when the only option was a program sponsorship.

However, for most major companies and brands, July 1 did not mean much more than the beginning of another quarter. Will some of them sign college athletes to endorser or influencer deals? Certainly. But most, for now, will not. And the agreements that are reached at this stage are much more likely to be experimental, opportunistic and small-scale rather than an integral part of an overall sports marketing strategy.

There will be exceptions, of course. But for every Unilever, which announced a five-year, $5 million commitment to form a “Breaking Limits” team of diverse college athletes, there will be many more Gopuffs and Runzas.

The delivery service is offering an undisclosed (read: extremely small) amount for social media posts promoting the brand to any and all student athletes on the Opendorse platform, while the regional fast-food chain is offering the same to the first 100 Nebraska college or university student-athletes who opt-in to take advantage of the offer. Due diligence, audience alignment and fit with brand values be damned!

The potential exists for more strategic use of college athletes, especially among brands that have identified college sports as an effective marketing platform. But many of them will, wisely, wait for the NIL marketplace to mature.

Brands want clarity on whether there will be further guardrails put in place through national legislation, more permanent NCAA rules, or both. Important questions such as will contract terms be publicly disclosed and will there be independent oversight remain unanswered.

Real value could lie in activating sponsorship of a school’s athletic program with athlete endorsement deals, but to execute such a promotion right now requires navigating state and/or school rules regarding what is and isn’t allowed.

Ultimately, the college athlete endorsement marketplace will look similar to the one that exists for Olympic athletes. The vast majority of deals will be hyperlocal and unremarkable, marquee stars will claim the lion’s share of the dollars available, and smart marketers will leverage relationships with athletes who can tap into targeted fans and followers and measurably support brand and business objectives.

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