The Show Must Go On: What to Expect in Year Two of NIL

Year one of name, image and likeness (NIL) freedom for college athletes is now in the books, and what a year it’s been. From the day one flurry of activity to the team-wide deals, to boosters reportedly offering insane amounts of money to athletes in exchange for very little in return (definitely no recruiting violations, though, right?!), the NIL era is off to a hot start.

Most avid fans of college sports developed or adopted strong opinions heading towards July 1, 2021. For many this was an applauded change and one they were anxious to see in practice, while others either spent their energy shouting about “amateurism” or simply laughing at the NCAA’s repeated losses – or seizing the opportunity for a delightful pun by saying the NCAA “punted” instead of producing meaningful guidance in the final hours before July 1.

With the first NIL-inclusive trip around the sun behind us, it’s time to look ahead to the encore season, the outlook for advertiser involvement with student-athletes, the direction of the industry spawned by NIL changes, and more.

Here are a few characteristics we expect to define year two of NIL, in no particular order.

Less “splash” deals, more strategic and calendarized brand promotions

Many of the NIL deals completed in the first year have shown advertisers impulsively flexing their spending muscles, with seemingly maverick activations of athletes that often have not fit within the brand’s overall theme or message. While they typically plan and budget on an annual basis and establish programming priorities well in advance, they also reserve resources for previously-unplanned reactions to the news of the moment. With NIL catching many marketers by surprise mid-year, it only left room for test-level budgets and limited time to devise athlete-specific strategies.

In year two, advertisers have been given the luxury of time to actually create real marketing campaigns involving student-athletes. With a full planning cycle they now have the opportunity to determine where and when athletes fit into scheduled promotions, product launches and new innovation initiatives. In some cases this will lead to the replacement of legacy influencers, while in others the inclusion of athletes will be incremental to their existing efforts to attain user-generated content or execute fan engagement events. Either way, expect brands to become more intentional with their collaborations and less spontaneous in their approach.

Collectives continue to push boundaries, but become more tech-forward

The proliferation of Collectives – entities formed by individual universities’ boosters and donors (independent of the universities themselves), with the intention of collecting funding for those schools’ athletes – has been a major development in year one of NIL. While their operators would argue the grounds for questioning their existence or varying business models are shaky at best, many onlookers and sports pundits continue to raise red flags as a small number of these entities inch closer and closer to the recruitment process (for both high school and transfer athletes). The NCAA has attempted to clarify what is permissible for Collectives’ involvement in the ecosystem of collegiate athletics, but stories about potential violations continue to surface.

With the speed at which these Collectives were constructed, though, the often-unmentioned handicap that could limit the scalability or operability of these entities stems from their lack of technology and organization. While it’s relatively easy to make fundraising calls and/or build a portal where fans can donate money, it’s not as simple to follow through with the activities athletes must complete in exchange for the money they’re receiving.

Expect many of these businesses – whether operating a transparent and completely-permissible Collective or not – to make necessary investments in the tools required to complete day-to-day operations smoothly and honor their commitments to donors in year two.

Athletes with (some) promotional experience

For a brief moment in time, NIL presented a rare leveling of the playing field among student-athletes. At 11:59 PM on June 30, 2021, not one of the NCAA’s nearly 500,000 athletes had experience collaborating with brands or capitalizing on their NIL in any way. This soon changed, however, as advertisers began the discovery mission to find and activate talent after the clock struck midnight. While many brands’ quests launched with efforts to get in contact with the athletes who get the most television airtime, play in the largest venues or have the most TikTok followers, it ultimately – and fortunately – morphed into a realization of the promotional talent that exists across all sports, schools and divisions.

So as many were predicting NIL changes would only deepen the pockets of the most heralded athletes from revenue-generating sports, the outcomes have somewhat contradicted those opinions. Today, and as a result of advertisers expanding their horizons, thousands of athletes across all sports and levels have experience working with brands and monetizing their NIL. In the process many of these athletes have found their voice as influencers, and gained an understanding of what to expect at each phase of a brand collaboration. This experience will benefit them in year two and beyond, as most advertisers will increasingly expect both smoother workflows and higher quality outputs.

Good platforms stay, bad platforms go

Arguably as notable as the proliferation of Collectives has been the number of new entrants into the industry intending to curate NIL opportunities on athletes’ behalf. Some incumbents historically sourcing opportunities for professional athletes made the natural transition to college athletes, while dozens of newcomers focusing solely on college athletes entered the arena, as well.

As with any new industry or extension of an existing industry, ultimately there will not be room for all platforms to prosper. As early as year two, some platforms could experience a lack of momentum that causes them to pivot or go out of business altogether.

It goes without saying, but the platforms bringing the most value to primary stakeholders – athletes and advertisers – will find themselves well-positioned heading into year three. “Value” for athletes could be defined in a number of ways, from providing much-needed NIL education to, of course, sourcing a large number of earning opportunities.

For advertisers the value equation is slightly more complex, and requires a thorough understanding of how they expect to operate within talent discovery and/or management platforms. Brand marketers’ email inboxes and LinkedIn feeds are inundated with the loudest and proudest providers claiming to be the best in their field, and they know how to quickly delineate between the real contenders and the overextended noisemakers. Year two will likely show how these brands’ choices are naturally trimming off the pretenders, and rewarding the providers who invested their energy into molding their product to its customers’ needs.

Coaches embrace the change or lose recruiting momentum

Since the beginning of time, recruiting success in collegiate athletics has come down to a few, consistent factors: a tradition of winning, education, coaching staff notoriety, facilities, and proximity to home, among a few others. While some of these factors must be built over the course of decades, others can be bought by wealthy donors and injected into universities’ recruiting pitches in a matter of a few short years.

NIL, however, inserts an entirely new line of questions from recruits when interviewing possible destinations. Will their desire to capitalize on their personal celebrity be celebrated by coaches and staff at the universities they’re considering? Will they be outfitted with best-in-class tools for sourcing NIL opportunities? Will they be given assistance in growing their personal brand or merchandising their abilities within the community?

A few coaches with stellar reputations on the playing surface have chosen to use their platform to express concerns with NIL, in general – some valid, but also some that may be disconcerting to the athletes they’re recruiting to join their program. An athlete with much to gain from their NIL will likely second guess any suitor who doesn’t appear to be wholeheartedly in support of their ability to capitalize on their fame. In these instances they may choose another program who checks fewer of the traditional boxes, but clearly shows interest in developing them holistically as a student, athlete, and entrepreneur or entertainer.

A much-needed infusion of creativity

Anyone keeping a close eye on this new industry has witnessed varying levels of thought and creativity included in athletes’ NIL-related work. While a few advertisers have clearly provided athletes with proper guidance, creative freedom and constructive recommendations, others appear to have stopped trying after the deal was initially secured.

Student-athletes’ newness to brand promotions should prompt advertisers to facilitate a more hands-on experience than they’re accustomed to creating for professional influencers. This means conducting research, gaining an understanding of the lives and audiences of college athletes, and devising relevant concepts and strategies athletes can interpret and execute. The alternative leads to nothing more than product placement: an athlete holding the product and/or wearing a shirt with the company’s logo, smiling at the camera, and sharing a clearly-scripted voiceover or caption that ultimately feels like a lifeless promotion to viewers.

For many reasons – some aforementioned – expect more brands to embrace athletes’ inexperience as creators in year two, and to appreciate the authenticity and ingenuity athletes are able to bring to their marketing mix. It may be uncomfortable for some marketers to allow young adults this creative freedom or put trend-worthy concepts in their hands to execute, but remember athletes thrive most when given proper coaching and the opportunity to improvise within reason. Smart brands will view their lack of experience as simply a lack of bad habits, and will gain comfort in allowing athletes’ creativity to shine.

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Athletes have entered a world occupied by huge corporations employing some of the brightest professionals and spending billions of dollars to accelerate their businesses. Most people would collapse under or shy away from such pressure, but athletes continue to step up, brave the unknown, adapt to the environment and display the results of lessons rapidly learned.

Year two will present new challenges athletes are eager to accept, and any forecaster would be wise to not predict a sophomore slump.