Online Journal | Benjie Harthun | January 2025
In 2010, Reggie Bush forfeited his 2005 Heisman Trophy after an NCAA investigation found he had received impermissible benefits like rent-free housing and travel benefits while playing college football at the University of Southern California. Fast forward 14 years later, where the number one high school football recruit in the nation committed to play at the University of Michigan after being offered a deal reportedly worth $10.5 million. The economic landscape of college football and college athletics has been thrown into chaos thanks to the introduction of name, image, and likeness (NIL) deals and their impact on the athletic recruitment process.
June 21st, 2021 is a day that will go down in NCAA history. In National Collegiate Athletic Association v. Alston, the Supreme Court unanimously ruled the NCAA’s restrictions on compensation and benefits for student-athletes violated the Sherman Antitrust Act. The ruling led to the NCAA adopting one of the most significant rule changes in its history, officially allowing student-athletes to benefit from their name, image, and likeness. Gone were the days when schools were punished for players receiving money, such as Bush and USC. Enter a new era, where athletes like Colorado quarterback Shedeur Sanders sign NIL deals worth an estimated $6.2 million annually. Of course, the lucrative nature of NIL deals extends to sports other than football; Louisiana State University Gymnast Livvy Dunne reportedly earns nearly $4 million per year in NIL deals, and former University of Iowa basketball standout Caitlin Clark signed deals with brands like Nike, Gatorade, and State Farm during her record-breaking college campaign.
Sponsorships in sports are nothing new, even for college athletics. It’s common to attend a sporting event and see the name of a sponsor, whether it be in a particular section of the arena or stadium or on a player’s jersey. Sponsorships are generally a win-win: the team receives income from the sponsor, and the sponsor can display themselves as affiliated with the team. However, for a long time, sponsoring professional versus collegiate sports was set apart by one key difference: the ability to sponsor individual players. In professional sports leagues, corporate sponsors can enter into deals with individuals, teams, or even an entire league. For example, Kansas City Chiefs quarterback Patrick Mahomes has a large sponsorship deal with the apparel company Adidas even though Adidas is not directly affiliated with the Chiefs. Up until the summer of 2021, this was not the case with collegiate sports; sponsors could only make deals with the university as a whole and not with individual players. Now, though, collegiate athletes are free to make deals with corporate sponsors independent of their team. This opens up a broad new market for sponsors and has resulted in a massive influx of money into collegiate sports.
While NIL deals are contained to individual athletes, they have become increasingly linked to teams thanks to a new kind of entity: NIL collectives. NIL collectives are groups comprised of wealthy boosters and alumni who pool their money together to create NIL deals for student-athletes at a particular university. Collectives have emerged as a powerful force in the recruiting process because of their ability to offer players money. While traditional factors like coaching, academics, and championship potential still influence recruits’ decisions, NIL deals and financial compensation are becoming even more prevalent, as is the case with Bryce Underwood and Michigan. There is currently no cap on the amount that donors and boosters can contribute, so the universities with the wealthiest and most active boosters can pool together the largest NIL funds, and have greater chances of landing more high-profile recruits. There are no universal restrictions on NIL collectives, allowing them to raise as much money as they want to attempt to sway recruits. Establishing a set of national guidelines regarding NIL collectives is a pressing goal for the NCAA, but their previous failure to restrict student-athlete compensation makes implementing any guidelines difficult.
Critics of NIL argue that the lack of restrictions on NIL spending widens the already-large talent gap in college athletics; teams with the most NIL resources can attract the best recruits. Critics compare this to the free agency system in Major League Baseball, which does not have a salary cap. In the MLB, large-market teams in New York or Los Angeles can sign virtually all high-profile recruits as they have the most resources and there is no salary cap to dissuade them from doing so. NIL is also closely tied to another college athletic institution that has undergone scrutiny in recent years: the transfer portal. Since college athletes are not bound by contracts like professional athletes, they are free to transfer as many times as they want, barring a few minor academic restrictions. Players often transfer to gain more playing time or to have a better chance at competing for a championship, but since the introduction of NIL deals, an increasing number of players have been transferring for financial reasons. It’s no longer uncommon to see players transfer multiple times, like University of Kansas basketball player A.J. Storr, who’s at his third school in three years. NIL has also caused controversy midseason, as in the case of former University of Nevada-Las Vegas quarterback Matthew Sluka, who left the program in September 2024 after he never received $100,000 in NIL money that UNLV allegedly promised him when recruiting him as a transfer from Holy Cross. NIL is supposed to encourage players to play, but it frequently has the opposite effect, as is the case with Sluka; players are willing to walk away from the sport and school they committed to over financial matters. Student-athletes now look at decisions through the lenses of businesspeople, not athletes.
In March 2024, a National Labor Relations Board Regional Director ruled that players on the Dartmouth College men’s basketball team were legal employees of the school, and as a result, entitled to a salary and collective bargaining. The players subsequently voted 13-2 to join the local union and filed an unfair labor practices complaint against the college after they refused to negotiate with the players. The dawn of NIL and financial compensation for college athletes calls into question the labor status of student-athletes. The NCAA has long held that college athletes are amateurs and therefore not eligible for financial compensation, which it used to deny athletes from profiting off NIL until 2021. However, recent debates have grown over whether college athletes truly are amateurs, or whether they are employees of their school and therefore entitled to a salary. The question of whether college athletes are employees comes with a litany of other debates regarding paying college athletes. NIL deals are unevenly distributed, as some players’ endorsement of a brand will carry a greater weight due to their social media presence or national recognition. However, the debate looms on whether athletes in different sports should be paid a different salary or wage. Football and men’s basketball are commonly the most profitable sports for a particular university, and most other sports do not generate enough revenue to cover their expenses. Should college athletes of all sports be paid the same, or should their salaries vary depending on the profitability of their sport? Another point of contention is where the funding for potential wages or salaries for student-athletes will come from. One possible source is diverting funding from academic programs or less profitable sports into paying athletes, which critics argue detracts from an institution’s primary purpose of providing an education. Other schools have shifted the cost onto consumers, like the University of Tennessee, which introduced a 10% “Talent Fee” to its season tickets for the 2025 football season to fund more NIL deals. A similar charge could be applied to paying potential salaries or wages for student-athletes. Another controversial proposal is factoring athletics salaries into tuition. While students at many Division I schools already see over $1000 of their tuition go toward subsidizing the athletic department, forcing students to subsidize student-athlete salaries would create an even greater increase in the price of college tuition.
The dawn of NIL deals has caused the visibility of college athletes to increase dramatically and increased overall demand for college athletics. With college athletes now appearing in advertisements or promoting brands on social media, they gain national recognition and become closer to household names in the way that professional athletes are. As college athletes gain visibility on a national level, the demand for college athletics as a whole increases. The rising demand for college athletics increases ticket prices across college sports, as fans are more willing to pay higher prices to see these highly sought-after athletes. Take women’s college basketball for example. Following Iowa star Caitlin Clark’s record-breaking senior season that saw her become a national phenomenon, ticket prices for the 2024 women’s college basketball Final Four were triple the previous year’s and double the prices for the men’s Final Four. The increased demand, combined with extra fees like the University of Tennessee’s “Talent Fee” mentioned earlier, contribute to an increased price level across college athletics. This demand isn’t taking away from professional sports, either. Sponsorship money remains steady across professional sports but has skyrocketed in college athletics due to NIL deals creating a brand-new market for corporate sponsors. The college athletics economy has experienced massive growth as a result of increasing demand for athletes thanks to NIL.
However, this economic growth in college athletics is not distributed equally. There are large inequalities in growth among different sports, with the most profitable sports experiencing a majority of the growth. In the top 50 of ON3’s NIL Valuation Rankings, there are 26 football players, 21 men’s basketball players, two women’s basketball players, and 1 women’s gymnast. Even before the era of NIL deals, football and men’s basketball still grew the most out of any college sports; now that NIL deals are generating even more demand, the inequality in growth is exacerbating even further. This raises questions about the future of less profitable sports, as schools will want to prioritize the sports that generate the most demand. If college athletes are paid salaries in the future, schools may cut less profitable sports altogether; instead of investing money into paying athletes for a sport that generates less revenue, they could invest that money into a high-demand sport like football or men’s basketball. This inequality in demand is nothing new to professional sports; leagues like the NBA or NFL constantly outpace smaller leagues like Major League Soccer in terms of ticket sales and sponsorships. But these leagues all operate independently of each other whereas a college must manage athletics programs of varying demand. Unless there is a way to reduce the costs of low-demand sports or increase their demand, the college sports landscape may become increasingly homogenous. Colleges will be forced to choose where to invest their resources in the face of rising inequality in college sports growth.
It has been just over three years since the NCAA officially lifted its ban on allowing student-athletes to benefit from their name, image, and likeness. Since then, the world of college athletics has transformed into something no one could have expected and something that resembles professional sports more and more every day. Whether this is a positive or negative impact is up for interpretation as debates rage over the future of NIL, the transfer portal, and student-athlete compensation. One thing is clear though: what it means to be a college athlete has changed dramatically, and it may never return to what it once was. What was once something so scandalous it forced Reggie Bush to forfeit his Heisman Trophy is now a completely ordinary part of college athletics.