Understanding How NIL Collectives Work

NIL collectives are here in a big way. If you're not sure exactly what that means, well, you're in the right place. 

First of all, who should really care about NIL collectives? It's not just student athletes. The world of collectives extends far into alumni, local businesses, national brands, fans, and more.

They're also very new, and in some cases, somewhat controversial. So let's talk about where they came from, what they do, and what they might mean for the future of college athlete content creators. 

Where NIL Collectives Came From And Who They Are

Just as a quick reminder, "NIL" is an acronym for "name, image, and likeness." It's a bit of legalese, but what it represents is essentially somebody's right to make money off themselves (think influencers). In the world of college athletics, this is a big deal. Because for a long time, college athletes weren't allowed to make money off their name, image, and likeness — despite being some of the younger creators most ripe for the opportunity.

That all changed in Summer of 2021 (much to the NCAA's chagrin). Now, college athletes are allowed to enter into brand deals and accept money for things like posting on social media, appearing at events, or sponsoring certain platforms and products. 

The first "collective," known as the Gator Collective, formed not long after that change at the University of Florida (though it's very important to note that collectives are not officially part of any school or university). The idea was basically, "Hey, let's get all these people who care about our university's athletics programs to pool their money and resources so we can provide the most opportunities for student athletes." The obvious undertone here is, "Let's create financial incentives so the best athletes want to come here and win championships." 

Only a year later, more than 120 different collectives exist. Nearly all of the 65 "Power 5" schools have a collective. Members of collectives include famous former student athletes, wealthy boosters, local business leaders, brands, and more.

So How Do These Collectives Actually Work?

There are a few different "types" of NIL collectives. At their core, they all have the same goal: get the best student athletes to attend the school they're (unofficially) affiliated with. 

But that's certainly not the only goal. Many of the collectives also exist to facilitate faster deals between athletes and brands (including brands who are members of the collective). There's also a pretty keen opportunity for the collective itself to make money, too. 

The Donor Collective

This kind of collective is probably the most straightforward. In this collective, members donate cash to a general pool. Then, the collective pays athletes in an NIL-compliant manner in exchange for things like social media posts, appearances at events, and other arranged perks. 

This is one of the most common types of collectives. It's also pretty easy to understand. And in a pre-NIL world, we've all heard stories about how certain boosters would pay athletes under the table to go to their university. This gets rid of all those shady undertones and protects both the donors and players with a sense of transparency. 

The Marketplace Collective

The marketplace NIL collective is a bit more hands-on with athletes. In this scenario, the collective is also connecting college athletes to different endorsement and NIL opportunities from third parties. This means they have a strong relationship with different local and national brands and companies. It also means the collective could even serve as an agent for the athlete, which is where the collective also starts to make money. 

Additionally, these collectives may actually employ members to facilitate the deals. They'll take donations and divert them to operating costs in order to make it worthwhile for everybody involved. 

The YOKE Collective

YOKE is a company that creates software enabling teams and student athlete bodies to pool together and split the revenue from NIL deals. YOKE participates either at the school level (meaning the university's athletic department pays to provide the software as a service to students) or as a revenue sharing model (reportedly 75 percent to the players and 25 percent to YOKE in some cases). 

The premise behind YOKE is more community-based. The software provided for teams includes a website, mobile app, and admin dashboard. In a lot of cases, YOKE more or less provides a monetized fan club for the teams and players. The athletes usually exchange things like appearances, social media shout-outs, and 1-on-1 experiences. And the teams typically split the profits.

The Dual Collective

A dual collective performs the functions of both a marketplace collective and a donor collective. Essentially, they provide themselves enough flexibility to both accept donations and facilitate outside deals for athletes. The country's first collective, The Gator Collective, is an example of this. 

What Do Universities Think About NIL Collectives — And Are They Flirting With Controversy?

You have to remember that universities and NIL collectives don't have any official association with each other. That's why many of the collectives share names and branding that feel similar to the university they support but are very clearly not the same. 

As such, you're probably not going to find a whole lot of official university opinions on collectives. But when you think about it, they're not a whole lot different than the boosters and wealthy donors who previously used cash to exert outside influence on the school's athletic programs. Those people don't share any "official" capacity with the university either, but much like political lobbying, it's not hard to connect the dots.

Now, they're just pooled together from a lot more people and typically look to favor the student athletes (and themselves) more than simply the school. Of course, they favor the school by proxy — if they can attract good athletes to go to the school, the school has a better chance of winning; when schools have competitive athletics, their overall brand value rises. 

Some schools and universities are considering bringing in third-party companies to help directly facilitate NIL deals. Others are focused on educating athletes to make decisions themselves. Many still aren't really sure what to do in order to provide the best options for students and themselves. In other words: mixed emotions and mixed priorities.

The NCAA, on the other hand, does not seem to be in favor of collectives. Given the NCAA's history with NIL in general, this is in no way surprising. 

It's easy to chalk up the NCAA's opinion to its overarching opposition, but there are at least some valid concerns. The primary one comes down to a general fear that far predates NIL: schools with large collectives that have lots of cash will be able to manipulate things like transfer portals and recruiting and reduce parity in the sport. 

But on the other side of the coin, how many players could immediately benefit from the financial opportunities collectives exist to provide? A lot of people don't realize you don't need to be a big name athlete with dreams of a professional career to benefit from NIL deals. And collectives, right now, have exhibited the most willingness to facilitate financial success for college athletes.