NIL has proven to be more complicated a topic than I initially thought it would be, but that’s because I didn’t think through all of the dimensions of it. I certainly didn’t see the idea of collectives coming before they actually did. Here is how I see the landscape as of now, which of course can change as things are still moving quickly.
For one thing, there are two different kinds of NIL as I see it: standard and pay-for-play. I know. Hang on a sec.
Standard is exactly what the face value of NIL would indicate. A player sells merchandise with his name or a personal logo on it. A company lines up a player up for endorsements through ads or sponsored social media posts. A handful of athletes do a paid autograph session.
Technically, pay-for-play NIL doesn’t exist. PFP is still against the NCAA rules. However, the infamous collective contract for $8 million over three years basically is pay-for-play. It’s a speculative investment by the collective at best, and the player wouldn’t have signed the contract without intending to attend that school. Both parties would lose out on a lot if the player went elsewhere, in fact.
There are also multiple kinds of payments going to players through NIL. Again, it bifurcates in terms of standard practices and collectives. The standard kind is the same as before: there’s a direct and obvious exchange of value occurring.
The collectives are a different beast. Even if a collective is meticulous about matching up a specific contract for every payment made, there are still lots of fans who are subscribing while not getting a lot in return.
Players are doing meet-and-greet events for collectives, or Q&A live streams and so forth, but not everyone who subscribes lives close enough to attend events or can watch the streams when they happen. I’d imagine a good number of collective subscribers hardly get or participate in any of the perks they’re officially offered to keep things just on the right side of the rules.
FSU, or rather its fan base, made news last week with its third NIL collective being established. It launched a thousand “does a school really need three collectives?” columns nationwide.
I don’t think one does; I think it’s a side effect of there being an NIL gold rush right now. There will be a slow stratification as we find out to whom It Just Means More, but in the meantime the novelty has a lot of people seeing dollar signs. I would bet there’s also a bit of this going on, where people unhappy with what a collective is doing decide to start their own.
Regardless, I think it’s a good thing for the players that the collective space is fragmented.
To be sure, it could be bad for some of them. If a player signs his NIL rights exclusively to a collective that then goes bust, there’s going to be some unpleasant legal wrangling to figure out what happens next. If there’s a bankruptcy fire sale, well, he could end up with someone very unexpected holding his rights until the contract ends.
But on the whole, the competition is good for the players. If multiple collectives are trying to get a player’s business, then he or she can play them off each other to get more money.
If you can imagine a world of consolidation where there are conference-wide or even nationwide collectives, then the power dynamic would run the other way. A MegaCollective could operate quite like any other massive entity in the entertainment industry, rewarding the very highest value people while essentially stiffing everyone else and skimming plenty of profits off for itself. The Odd Lots podcast did an eye-opening episode recently about what Spotify and streaming in general has done to the music industry. You wouldn’t want to see that happen to college athletes.
If a consolidation happens, it won’t come under a single, unified banner. As tribally aligned as SEC fans got during the height of the Conference Wars last decade, there was never a time when they would’ve donated money to help a school other than their own. A collective servicing the entire SEC would mean doing just that, having your dollar of donation being split 14 (or soon, 16) ways.
The way it could happen would be for one parent company to open up collective branches at many different schools. They might have a name that indicates an overarching parent company in a less up-front way, just so that the successes of one of their collectives might shine on the rest for those paying close attention. However, they’d be completely branded with school colors with highly school-affiliated people to front them to attract money from sidewalk fans. It’d be trying to thread the needle of seeming uniquely tied to a school while also touting benefits of being networked.
Such a setup could actually facilitate transfers better than the current system. Right now if a player signs his NIL rights to a given collective for several years, then he’s up a creek if he wants to transfer before that time is up. Not only will he probably not be able to get those rights back sooner without buying them back, but if he doesn’t, then the collective for another school could profit off of selling merchandise with his name, image, or likeness for the remainder of the contract. Imagine shirts bearing a Gator defensive end’s or cornerback’s name going to fund NIL payments to Georgia players. Oof.
But if he signs with the MegaCollective’s local branch at one school, he could then transfer to another school with a different MegaCollective branch and still be able to maximize his value for the himself and the school he attends. You can bet that if athletes who sign with a MegaCollective branch only transfer to other schools with MegaCollective branches, every big time school is going to want a MegaCollective branch. And once MegaCollective has built out the network, then it can use its size and ubiquity to squeeze all but the most valuable players into lesser deals.
As always, there are tradeoffs in everything. I really only thought about what I termed the “standard” things before NIL went into effect, but it’s proven to be a giant spaghetti plate of tangled threads. The more options there are, the more complicated it is. Options are good, but I hope things stay tilted towards the players because there are a lot of options that end up with athletes losing out.