The business of recruiting top performers and connecting them to money-making opportunities has gotten too complicated for many volunteer collectives, so they’re handing off the job to NIL professionals.
Itdidn’t take long for Mark Comer to realize that The Royal Blue Collective, a booster group for Brigham Young University sports, wouldn’t be able to thrive in the big-money world of Name, Image and Likeness with volunteers running the show.
“It can be complicated,” said Comer, a 56-year-old Utah businessman and investor who, like other members of the collective, figured at first that he could treat NIL as a hobby. “We realized early on that there’s a lot more to a collective than we anticipated.” The NIL process — soliciting donations to recruit and retain college athletes and connecting them to money-making opportunities — couldn’t be left to part-timers. So Comer, a co-chair of the group, joked with his colleagues that, “If we don’t bring in an outside firm to help with administration and operations, I’ll resign.”
NIL has exploded since its inception in June 2021, when the U.S. Supreme Court ruled that athletes could make money from their participation in college sports. That year, Tim Derdenger, a Carnegie Mellon Tepper School of Business professor, estimated that NIL deals would surpass $1 billion by 2026. Bettors should’ve taken the under. Opendorse, an athlete-marketing website, told Forbes that $1 billion will change hands in the 12-month period ending this June, with more than $100 million happening on its platform. Derdenger has adjusted his expectations. In an email to Forbes, he now says the total value of NIL deals will hit the nine-figure mark as soon as next year.
Seemingly overnight, money, and so much of it, has transformed not only the NIL process but the entire business of college sports. Gone are the shadowy bagmen, alums personified by the character Buddy Garrity in the TV series Friday Night Lights, who stretch and sometimes break rules that supposedly protected the amateur status of athletes, and which a real-life court decision affirmed was exploiting the athletes’ labor for profit. In their place, we’re witnessing the birth of a new professional class, the NIL go-betweens, who’ll take a cut of the money to lure and manage top talent while navigating the often capricious diktats the NCAA has concocted to guide the process.
As NCAA March Madness begins (and ends this weekend for three-quarters of the teams), some of its most recognizable faces have also become major players in NIL Merch Madness. Seven-foot-4 Zach Edey, the All-American center for regional No. 1-seed Purdue, has an officially licensed hockey jersey. Forget that hockey at Purdue is only a club sport; buy the merch for $89.99. Many fans have. The On3 database, which projects athletes’ annual NIL earnings potential based on performance, influence and exposure metrics, puts Edey’s NIL haul at north of $800,000. The Cavinder twins, Haley and Hanna, have an estimated NIL take of $1.6 million between them, according to On3. Available for sale, with their signature HXH logo, are hoodies ($45), black baseball caps ($25) and socks, in black or white ($25). Their Miami Hurricanes, seeded ninth, play Oklahoma State in the opening round Saturday.
Among the most highly coveted athletes are LSU gymnast Olivia Dunne ($3.4 million, according to On3), who reps American Eagle jeans, and Alabama quarterback and possible top NFL draft pick Bryce Young ($3.5 million, per On3), who has his own sandwich, “The Tuscaloosa,” at Subway. The sub, served on Italian bread, comes with double steak, bacon, Monterey cheddar and something called Baja chipotle sauce.
Firms like Oncoor and Blueprint Sports — which is backed by an investment from tennis legend Andre Agassi — are two of the middlemen who will do the boring back-office work for collectives, like taking charge of payroll, accounting and other mundane tasks that upstarts often forget are part of running a business. They’ll also keep NIL collectives and school athletic departments apart. NCAA rules say there needs to be a wall between them.
“It can be complicated. We realized early on that there’s a lot more to a collective than we anticipated.”
“I’m a big believer in empowering student-athletes to reach their full potential and give them the tools to develop their personal brands,” Agassi told Forbes. Blueprint’s “business model connects student-athletes with earning opportunities and educates them to think of sports as a long-term game. Better yet, a big focus has been to ensure these young men and women are giving back to the communities where they live and play, through charitable partnerships and community engagements. It’s a win-win for athletic programs and communities nationwide.”
Comer and his colleagues at BYU’s Royal Blue Collective chose Oncoor to help.“It’s important for us to provide value and resources so the athletes can see the greatest benefit, while making sure everything we do is in full compliance with NCAA guidelines and BYU school rules,” Comer told Forbes. “Oncoor provides us with all of this, has been an extremely valuable partner in what we’re building, and is helping us set ourselves up for a strong future in NIL.”
The Cavinders were involved in the NCAA’s first sanctions related to NIL. The NCAA alleges that Miami alum John Ruiz improperly met with Haley and Hanna in an ultimately successful effort to convince them to transfer to the Hurricanes from Fresno State. The twins were not accused of any wrongdoing. Ruiz, the billionaire founder of LifeWallet, said he plans to sue the NCAA. The incident highlights the current ambiguous rules surrounding NIL and how easy it is to step afoul of them.
“I’m a big believer in empowering student-athletes to reach their full potential and give them the tools to develop their personal brands.”
The obvious next step in professional NIL management would be the entry of the big-name brands, such as Nike and Gatorade, that typically dominate the endorsement landscape. But they haven’t dived in yet, mostly because NCAA regulations surrounding NIL are still hazy, leaving many companies unsure of what exactly they’re getting themselves into or how they can be sure that they won’t spoil an athlete’s eligibility. There’s also the reputational risk of partnering with young people in what can be a very grownup business.
Some brands have made inroads despite the potential pitfalls. Dove is committing money this year, according to Oncoor president Russell White. Then there’s the WWE, which enlists college athletes to learn the ropes of professional wrestling. White lauds the program as one of his favorites. “They do such a good job,” he told Forbes.
Because the revenue model for professional NIL managers is typically to charge an initial fee to onboard collectives and then take a cut of the money they bring through the door, there are concerns that in the NIL era, the gap between rich and poor schools will continue to grow.
Rob Sine, Blueprint Sports’ cofounder and CEO, acknowledged that the full suite of Blueprint’s services might not be economical for smaller schools. However, the company hasn’t punted on the segment. Instead, Blueprint offers a streamlined version to those priced out of the deluxe package.
“I’ve heard countless stories of athletes saying they did work but never got paid, or that they signed this contract and gave up their NIL in perpetuity for five grand. That’s just ridiculous,” Sine told Forbes. “Bringing a sense of calm and professionalism and organization to this industry is our charge.”
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Source: https://www.forbes.com/sites/brandonkochkodin/2023/03/17/merch-madness-the-riches-flowing-to-ncaa-athletes-are-too-much-for-alumni-groups-to-handle/