A Comprehensive Overview of Name, Image, and Likeness Collectives
The NCAA's rules banning student-athletes from profiting off of their name, image, and likeness were plainly outdated. In the age of social media, it's easier than ever for student-athletes to generate revenue by sharing sponsored content, partnering with brands, and more. As a result, a growing number of states passed legislation that would allow student-athletes to profit off of their name, image, and likeness starting as early as July 1st, 2021.
Originally it was unclear how these state laws would interact with the NCAA's own rules. Now one thing is certain: the landscape of college athletics is changing dramatically. In this blog post, we'll provide an overview of name, image, and likeness collectives—also known as NIL collectives—and how they will shape the future of college athletics.
What is an NIL Collective?
An NIL collective is a group that represents student-athletes' interests in marketing and commercial opportunities. These collectives negotiate deals on behalf of their members and usually take a percentage of the proceeds as a commission to support their ongoing activities. Think of them as talent agencies for student-athletes.
NIL collectives provide several benefits for student-athletes. First and foremost, they level the playing field when it comes to negotiating marketing and endorsement deals. For example, imagine if LeBron James tried to negotiate his first sneaker deal on his own. It's safe to say that he would have been taken advantage of; after all, he was just a teenager with no experience in business or contract negotiation. However, LeBron had a team of experienced agents working on his behalf. As a result, he was able to secure a $90 million deal with Nike—the biggest rookie shoe contract in NBA history at the time.
In addition to leveling the playing field, NIL collectives also provide student-athletes with resources and support. For example, many NIL collectives could offer educational resources on money management, tax implications and financial planning. Collectives also could offer legal support in the event that a student-athlete signs an unfair or one-sided contract.
Are there any drawbacks?
Of course, nothing is perfect; there are some potential drawbacks to NIL collectives as well. First and foremost, there is always the risk of fraud and abuse when it comes to any type of fund or collective. For example, some unscrupulous agents might try to funnel money away from student-athletes or operate the collective without following all rules and regulations around NIL. Additionally, because commission fees can add up quickly, student-athletes could end up losing a significant portion of their earnings to their representation. Collectives, which are often run by a single booster, can be subject to that single booster’s wants and desires which may not align with the coaching staff and the school’s plans. Finally, because most NIL collectives arefor-profit entities, they will be subject to tax laws—meaning that student-athletes will have to give up even more money in taxes.
It remains to be seen how all of these potential drawbacks will play out in practice; however, they are definitely worth taking into consideration when deciding whether or not to contribute to an NIL collective.
Conclusion:
It is now a reality that student-athletes are allowed to profit off of their name, image, and likeness. Athletic directors will need to decide whether or not their school wants to have an official collective that they are aligned with. There are pros and cons, but one thing is certain: the landscape of college athletics is changing dramatically. Whether or not your school chooses to officially partner with anNIL collective, make sure to do your research so you can make an informed decision about how you want to allocate your support to your favorite team.
