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Monday, November 29, 2021

While some NCAA athletes cash in on NIL, others lose out

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Since the National Collegiate Athletic Association created an interim policy three months ago allowing college athletes to profit off of their name, image and likeness (NIL), some athletes have been cashing in.

One of the biggest beneficiaries of NIL so far is University of Alabama quarterback Bryce Young, who by late July had already earned close to $1 million in endorsement deals, AL.com reported. At California State University, Fresno, women’s basketball players Haley and Hanna Cavinder, who are twins, have used their Instagram and TikTok fame to land deals with Six Star Pro Nutrition and Boost Mobile.

Some institutions are even seeing opportunities for entire teams or athletic departments. All female athletes at Brigham Young University now have the opportunity to earn up to $6,000 during the academic year through a brand deal with SmartyStreets, a location data intelligence company. Trent Howell, head of marketing at SmartyStreets, said female athletes who use their social media channels to share information about the company, attend and promote company events, appear as talent in marketing materials, and wear “SmartyStreets swag” will receive payment per activity, earning up to $3,000 per semester. So far, he said, 294 athletes have signed up for the brand deal. He said SmartyStreets CEO and founder Jonathan Oliver chose to connect with all the women in the athletic department because women’s sports are typically overlooked.

“He knows that the football team always gets so much of the attention because that’s a moneymaker for most schools,” Howell said. “He wanted to do something for female athletes.”

Proving his point, BYU’s athletic department announced in August that the football team had signed a deal with Built Brands LLC, which makes protein bars and other products, that benefits all 123 players on the team — including walk-ons. The athletes will wear Built branding on their practice helmets and participate in events, as well as post on social media. In return, the company will provide compensation in the amount “comparable to the costs of tuition for an academic year,” the department said in a press release.

Opendorse, a sports technology company that connects athletes with endorsements, found that since July 1, college football players have signed 60.1 percent of all NIL deals, with women’s volleyball in second place at 9.8 percent. Opendorse also found that 47.8 percent of total NIL compensation is awarded for posting content on social media, 19.1 percent goes for licensing rights and 12.8 percent goes for players’ signatures on products.

And when it comes to athletic divisions, Opendorse found the average NIL compensation for Division I athletes in July was $471, while those in Division II earned an average of $81 and those in Division III, $47.

However, as athletes make money from brand deals, some institutions are still struggling to navigate their state laws and regulations as the NCAA works with Congress to create overarching federal legislation, said Adrienne Larmett, a senior manager in Baker Tilly’s risk advisory practice focusing on higher education. Regardless of whether legislation on NIL has been signed or taken effect at the state level, all college athletes are now able to profit under NCAA’s interim policy. Under the policy, athletes cannot accept NIL deals unless they play, compensation cannot be contingent upon their enrollment at a particular school or their athletic achievement and athletes cannot accept payment from their institution in exchange for use of their name, image or likeness.

However, state laws trump NCAA regulations. In California, Governor Gavin Newsom signed the Fair Pay to Play Act in August, which prevents the NCAA from declaring an athlete ineligible to participate in an NCAA competition just because the student athlete received NIL compensation.

So far, 40 states have either enacted or drafted their own regulations around NIL, according to Baker Tilly’s website. For those that don’t currently have NIL regulations — Alaska, Delaware, Idaho, Indiana, Maine, North Dakota, South Dakota, Utah, Wisconsin and Wyoming — Larmett said it’s on institutions in those states to develop their own policies in accordance with NCAA guidelines. And if federal or state legislation on NIL were ever enacted, those institutions from those 10 states would need to revisit those rules, she said.

“While there are many commonalities, if you take a look at all of the regulations either enacted or proposed, there’s definitely a lot of nuances to navigate,” Larmett said. “And so it’s clearly been a moving target and an all-hands-on-deck scenario for many of the schools to respond to.”

Last week, players, coaches and administrators testified before Congress as lawmakers consider establishing federal rules to govern college athletics. NCAA president Mark Emmert, in his opening statement, called on Congress to meet the “urgent” need for a “federal framework” around NIL.

But there are issues surrounding NIL that go beyond the question of federal and state regulations, Larmett said. The NCAA’s NIL policy was enacted as an unfunded mandate for institutions to manage, meaning some institutions don’t have the resources to put it into effective practice. She worries about a growing gap between institutions that have funds to support college athletes — by providing training in financial literacy, social media and marketing, for example — and those that don’t. That gap might impact how institutions recruit and attract as well as retain top talent, she said.

“The prospects might be looking to attend institutions that have infrastructure and support systems to help them maximize their NIL potential,” Larmett said. “Existing student athletes might look to transfer to institutions where those schools have infrastructures to help them.”

Larmett said the patchwork of regulations states have adopted could pose challenges to prospective athletes as they try to pick an institution. For example, in West Virginia, NIL regulations require any professional representation to be licensed in the state. So athletes might not be able to use the family accountant for help on taxes if they’re not licensed in the state.

Looking ahead, Larmett said she’s interested to see what will come out of the NCAA’s November summit. And more broadly, she’s concerned about possible issues with gender equity and inclusion surrounding NIL, since men’s sports typically generate more money than women’s.

At a congressional NIL hearing last week, Cameron March, a member of the women’s golf team at Washington State University, called on Congress to account in federal legislation for how NIL will impact less visible players.

“I know this too well as a female athlete of color, currently playing women’s golf, a sport that isn’t the most lucrative or visible,” March testified. “This is why I feel as though it’d be wishful thinking to believe that someone like me would ever be on an equal financial playing field as a star quarterback.”

Larmett said there also needs to be a focus on how institutions provide mental health and wellness resources for female athletes. Research shows that women struggle with anxiety and other mental health issues more on social media than their male counterparts, which could be exacerbated by the additional pressure to use social media to profit from NIL. She added that a lot of female college athletes are now struggling with “enough-isms,” meaning that they often ask themselves if they’re “good enough” as a person and as an athlete.

“Schools are recognizing that this is going to probably be something that is going to persist,” Larmett said. “Schools need to reinforce their mental health and wellness resources to support their female athletes and just be prepared to adjust the level of support.”





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