Institutes for Higher Earning?

 

Illustration by Thuan Pham

NIL Paydays

Tiger Woods signed a five-year, $40 million contract with Nike while a 19-year-old in his second year at Stanford, he never returned to complete his degree in Economics. Michael Jordan left North Carolina after his Junior season in 1984 and signed a seven-year, $6.3 million contract with the Chicago Bulls. He returned to Chapel Hill to complete his Geography degree in 1986. In 2021, Woods’ net worth is estimated at $800 million, Jordan’s at $1.6 billion.

Tempting to wag your finger at Woods while explaining the importance of a good college education. Both Jordan and Woods made some savvy economic decisions over their respective careers, and made millions selling footwear, golf accessories, sports drinks, and hamburgers. However, these anomalous examples may one day become more commonplace in the context of tomorrow’s college athletics, especially given the Name, Image, and Likeness (NIL) transformative rule the NCAA issued on July 1 of this year

Most people likely stop to think about how much we could earn before choosing a major in college, or when simply accepting any job upon graduation. Why do we think differently about college student-athletes who may choose a career in sports? Probabilities are one reason. The NCAA gives 1.6% odds that an athlete will graduate from the ranks of college football player to NFL player. The sport with the highest chances of stepping up to the professional ranks, baseball, still offers over a 90% chance you won’t make the cut to the Majors. Most people likely believe college athletes would be wise to develop a backup plan.

Dr. Clay Stoldt, Interim Dean for the College of Applied Studies at Wichita State University, believes that NIL is a compromise between keeping campus athletics at amateur status and accepting the reality that student-athletes are entertainment commodities in a multi-billion dollar industry.

“NIL clearly represents a major change in the college athletics landscape,” Stoldt said. “It is not, however, the end of amateurism as institutions are still prohibited from compensating student-athletes, and NIL deals cannot be linked to a student-athlete competing for a particular institution or attaining performance benchmarks.”

Former Friends football defensive coordinator and Iowa University javelin thrower Matt Byers flashed a wry smile upon hearing the term “amateurism” when linked to NIL policy.

“It’s not,” Byers said. “When you look at the elite schools, when you talk about Ohio State, Alabama, Texas, Oklahoma, the rich are going to get richer, they have the boosters. They all have a person in charge of NIL, the players’ endorsements, almost like an agent, to make sure they are within (the rules of) compliance. At the end of the day, when you have players making a million dollars, that’s not amateurism.”

 “Players are following the money,” Byers continued, “but you’re going to go down a slippery slope, they need to maintain the integrity of the game. Alabama’s quarterback has a million dollars before he even played a down . . . how’s that going to affect the locker room?“

Both Stoldt and Byers agree that most players will avoid the potential conflicts between the financial haves and have nots.

“The potential exists, but it’s not a given this will occur on a widespread basis,” Stoldt said. “The vast majority of NIL deals are modest with a median under $100. Most student-athletes are either not pursuing or are not receiving NIL deals. But there are certainly some high-earners who are the exceptions.”

Stoldt did see an advantage to team participation in NIL opportunities. “One way locker-room impact can be mitigated is via group deals, where numerous team members share in the revenue.”

Matt Byers’ NCAA qualifying Javelin throw in 2012. Photo Courtesy of Matt Byers

Byers attempted to place himself in the locker room, a former Big Ten Champion at Iowa. “I think players will be supportive, but it comes down to how the athlete handles it because if a player wants to act like he’s better than everyone else, above everyone else, then that’s when you see the locker room suffer.”

One example Byers cited is All-American Defensive Tackle from Georgia, Jordan Davis, who turned down NIL money to avoid the potential distraction from his focus on winning football games. Davis did succumb to the temptation in October, however, when he signed a contract to endorse Gorilla Glue.

Animosity can also arise between various athletes within a university, Byers said. “As a football player, when you do get paid more money than athletes in other sports, you get a target on your back. You may be a good athlete in a nonrevenue-drawing sport, and you may resent that. I received a .75 scholarship at the University of Iowa so my parents had to help me pay the rest of the costs.”

Byers doesn’t like the depiction of a full-ride scholarship athlete as not being paid. “You’re not paying for tuition, you’re not paying for housing, you’re not paying for books, you’re not paying for meals, be humble in that perspective.”

At WSU, Stoldt is helping build a new undergraduate certificate in Sport Leadership and Branding. The 15-credit certificate launches in the spring semester.  “It certainly allows student-athletes to leverage their brands to generate short-term revenue, even if that’s modest dollars for something like a camp appearance. But the greater opportunity for the majority of student-athletes comes from the ability to build brands that have long-term value. Jeremy Darlow is a sport branding consultant who is doing a lot of work in the NIL space, and he emphasizes to student-athletes that this is about the next 40 years, not just the next four. I love that line because if we really want to maximize our impact with student-athletes, we need to give them the tools to build a lifetime of success.”

Across the nation, conference realignment is happening at breakneck speed, and that, combined with the transfer portal, which allows a college athlete to change schools once during a college career without losing eligibility, is leading to fewer players staying four years at the same university. Quinn Ewers represents the complex nature of the NIL changes in the age of the transfer portal. He was signed this year as a freshman quarterback for Ohio State, and separately signing up for over a million dollars in commercial product endorsements. After accumulating only a few snaps as a Buckeye, however, he recently decided to enter the portal to transfer to a school with the chance to show his skills, something he was not going to do anytime soon at Ohio State, given the impressive performance of current quarterback C.J. Stroud.

“So many things are happening so quickly, it’s impossible to know exactly what this will look like 2-3 years down the line,” Stoldt said. “Whatever the new structures, it’s fair to expect that the most high-profile football institutions and their conferences will significantly increase their revenue. It’s more difficult to project what that will mean for other conferences and their member institutions. Live sports continue to have tremendous value to multimedia rights partners, so there is reason for optimism regarding their future revenue too. But it seems clear the gap between the richest programs and everyone else will widen significantly.”

As for Byers, when asked what would have been different for him during his track and field days at Iowa had NIL rules existed: “I would have tried to get a chance for a commercial so I could get some cash or discounts on athletic gear. It would have helped, being in a non-revenue sport. Why not get some compensation for your work?”

 
Steve Witherspoon