The Deregulation Of NIL

The deregulation of NIL has brought with it as many opportunities as it has questions. With college football — one of the most popular sports in America and a driving factor behind the NIL changes — back in full swing, there's more conversation than ever about what student athletes can and should do to make money off their name, image, and likeness. 

During the Rally Innovation conference in Indianapolis last month, the NCAA's managing director of championships Chris Termini and Learfield's president of brand management and marketing Cory Moss sat down to discuss what that the deregulation of NIL means for student athletes. 

What Separates College Sports From Pro Sports

The biggest difference between college sports and pro sports is that, with pro sports, there are typically a few unified places to go when negotiating terms. Because professional sports organizations typically have players unions and players are seen as employees, there's collective bargaining. 

That doesn't exist in college (though the Ivy League schools are very close to making it happen). The NCAA has long fought the notion that student athletes are employees of the university, largely because of the bargaining power those athletes could then leverage. It's an implication that could potentially severely weaken the NCAA's power in the collegiate sports world altogether. 

"The college sports market economy is kind of esoteric, maybe not unlike the NCAA," Chris Termini told the Rally conference crowd. "Kind of a black box. It’s a fractured industry. It’s not like the NFL, the NBA, MLB. Those are leagues, for-profit pursuits. It’s all driven by contracts. It’s big economically but small operationally."

Companies like Learfield, which started as far back as the 1970s, essentially exist as a middleman in a collegiate sports world where there are not only thousands upon thousands of potential licensors, but thousands upon thousands of licensees. The disparate circumstances facing all of the different universities, student athletes, and people looking to do business within collegiate sports is basically the catalyst for Learfield's importance.

"Learfield is a really important lubricant to making business happen in college sports," Termini adds. "There are disparate resources, but they all need help. Learfield helps the universities figure out what to do with all of their rights. They’re making business happen between the school and the licensees."

Before July 2021, Learfield had a very hard line in the sand.

"We come from a space where NIL was not possible at all," Cory Moss tells the crowd. "All of our agreements with companies, manufacturers that wanted to partner with college sports — all of the agreements started with, “'You cannot do anything with student athletes.' It started there."

But with the deregulation of NIL, it's a whole new ball game.

Understanding What The Deregulation Of NIL Means

When we talk about the deregulation of NIL, we're not just talking about the fact that student athletes can now make money off their own name, image, and likeness. We're talking about the fact that there are also seemingly no protections or guidelines within that framework, like there may be in professional organizations with players unions. 

The NCAA has tried repeatedly to introduce different regulations and guidelines for NIL, continually leveraging itself as a potential body to police these efforts. Not everybody wants that, given the organization's history of fighting player compensation tooth and nail for decades. In fact, before Georgia and Oklahoma sued the NCAA in 1985, schools didn't even have the ability to manage their own media rights. (Oh, and that's probably changing for student athletes' favor, too). 

"We’re in the land of confusion," Termini says. "But one thing that is clear is that student athletes can pursue and exploit their own name, image, and likeness. The NCAA has taken a hands-off deregulatory approach to NIL, which has allowed and fostered this new economy. NIL is probably the biggest disruption in college sports."

Moss uses the example of going out and licensing the newly released EA Sports College Football 25 video game, which formerly included the NCAA branding. 

"College sports and NIL operate totally different from the professional leagues," Moss says. "We’re going to 130 FBS football-playing institutions individually. When you do a Madden game, you go to the NFL, and the NFL gives you all 32 teams. Because college sports is so fragmented, you go to each university and institution one-be-one. We have to go to every single student athlete — 11,000 student athletes that are not part of a union — and present the opportunity and ask are you in or are you out?"

Making The Distinction Of 'True NIL'

Perhaps the last vestige of preserving the notion of amateur sports, the NCAA still wants to make a clear distinction between "true NIL" and "pay-to-play." In other words — is the athlete being paid for the name, image, and likeness, or are they simply being paid to play football at the school? 

If it feels almost impossible to really discern, that's because it is. It's one of the worst-kept secrets that boosters often showered gifts and cash on players in an effort to get them to go to a school of their choice. The NCAA punished these situations heavily, revoking Heisman trophies from players, instituting "bowl bans" and taking away previous victories. 

Those days are likely numbered, if not over, thanks to the way in which the deregulation of NIL leaves the door wide open for interpretation. Here, Termini suggests the NCAA isn't taking such a hands-off approach. "It’s a philosophical debate and an academic debate but also a practical one," he says. "That is, what’s it worth for the starting quarterback at Georgia to show up for a car wash? The NCAA has to somehow police, what is that car wash worth, and is it a true endorsement deal, and if it’s not, is it just pay-for-play? Is it truly for endorsement, or is it inducement? If it’s inducement, it’s compensation for on-field performance, which is a no-no."

But again, a fairly basic interpretation of value would be, "Whatever somebody is willing to pay for it." So, at least currently, there's not much recourse against the notion that a collective could pay an incoming freshman $5 million for a few appearances and social media posts — a tremendous amount of money compared to the services rendered, but less so if you view it as an offer to come and play a sport. 

In this new paradigm — to borrow a bit of a cliché — it truly is the Wild West.