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Money-making student athletes changing future of college sports for schools and their fans

abbeyfc23

Updated: Oct 23, 2024

By Abbey Curtis and Andy Gilles


As the 2023 college football season got underway, 85 University of Utah football players arrived at practice unaware they would each be receiving a lease for a Dodge Ram truck.


The over-the-top gift was made possible by the Utah Crimson Collective, an organization of the university’s alumni and major donors, who created a deal to cover the leases for every player on scholarship with the Utes.


And all of that was possible thanks to a 2021 Supreme Court ruling allowing student-athletes to make money on their Name, Image, Likeness.


If you're a sports fan, you've no doubt heard “NIL" mentioned a lot in the past year.


While the details can get complicated, the point is pretty simple – college athletes are getting paid for their fame.


This ability for players to make money off their “brand” had been restricted by the National Collegiate Athletic Association until a Supreme Court decision opened it up in 2021, and now it's a free-for-all that college athletes, agents, universities and fans are trying to navigate.


“A lot of people call it the Wild West, and it is in a lot of ways." - Tyler Jones, founder of Bold South Sports and CEO of The Edge. 

Tom Bower, president of Athlete Advantage which deals with education for athletes about NIL deals, believes NIL provides great incentives for the student-athletes to be their best on the field and in the classroom. 


“NIL is actually an added tool to sports as a whole because now a player or an athlete has even more reason to make good grades, to be an upstanding citizen, to serve, besides just staying on the court," he said.


Whether NIL is ultimately going to be a good thing or bad thing for college athletes, it’s definitely going to be a complicated thing for college athletics – which is now more of a business than ever before.


How the NIL came to be

When the NCAA formally established in 1906, its mission statement was to “provide a world-class athletics and academic experience for student-athletes that fosters lifelong well-being.” 


The organization provides rules for athlete eligibility, standards for university facilities, protocols for hiring coaches and recruiting high school athletes. But its role has been under fire in recent years as the definition of providing for the “well-being” of athletes has changed.


The change didn’t happen overnight. NCAA was adamantly opposed to NIL money for its athletes, but decades of unequal and sometimes unjust discipline for illegal college booster donations to schools and athletes, plus the marketing reality of social media, helped create a new paradigm in college sports. 


This paradigm had been in the making since the 80s when rich sports fans found secret avenues via college booster clubs to help their favorite teams attract the best players – with cash and cars and clothes galore. It was illegal -- and unfair to programs with less wealthy fans -- but the true losers were the athletes.


Star players, many of whom hailed from low income families struggling to make ends meet, were getting no compensation for their efforts that were making schools extremely rich.


The unfairness of the NCAA’s policies came to a head in 2004 with standout running back Reggie Bush. Bush was severely punished for taking benefits from NFL agents before he finished playing college ball.


This heavy hand from the NCAA finally came to a head in a lawsuit challenging NCAA rules that restricted student-athlete compensation and the commercial use of their name, image and likeness. 


While the NCAA took its time coming up with a policy, California became the first state to pass a formal NIL law in 2019, allowing college athletes to be paid for their name, image, and likeness. 


NCAA officials called the state law “harmful," “unconstitutional” and an "existential threat” to college sports, but more than 20 other states followed suit with their own NIL laws within the year.


Ultimately the Supreme Court disagreed with the NCAA’s position in its landmark decision that brought the governing board’s reign over student-athletes crashing down.


The June 2021 ruling came at a time when several states were on the verge of passing laws to give student athletes more control over the use of their likeness, and Congress had been mulling legislation to provide better compensation for student athletes. 



The NCAA created some direction in May with four provisions it says are designed to protect student-athletes in this NIL Wild West – such as creating a uniform contract for schools to use, building an NIL deal database for transparency in deals and instituting NIL education efforts to help student-athletes understand the landscape. 


Then in October 2024, a preliminary settlement in House v. NCAA, cleared the way for schools to begin paying players directly through revenue sharing as early as 2025. The tentative settlement, which would provide compensation to past and future student-athletes, enters its last phase before a final approval hearing next spring. If approved, the traditional NCAA amateurism model will be replaced with a system allowing schools to make direct payments to student-athletes for the first time ever.


NIL in South Carolina


South Carolina passed its first state law on NIL in 2021 following the Supreme Court decision, but it was relatively restrictive in how athletes could earn NIL money. 


Lawmakers passed H. 4957 in the spring, giving institutions the right to both directly and indirectly oversee NIL deals involving its student-athletes. The law does not require student-athletes to engage with their college or university as part of an NIL deal.


State Rep. Seth Rose, D-Richland, sponsored the bill and said the purpose of involving the universities is to prevent “bad actors” from taking advantage of student-athletes unfamiliar with sports contracts.


“There could be somebody who's a shady character that is having a student-athlete sign a contract that they don't understand." - State Rep. Seth Rose on South Carolina's NIL law passed in May

The new law still doesn’t allow student-athletes to endorse certain products like tobacco, alcohol, illegal substances and sports betting in the South Carolina.


But the state’s student athletes are definitely taking advantage of the NIL goldmine.



NIL impact on South Carolina universities


Although the full impact of NIL is uncertain, what is certain is that college sports is becoming even more of a business. And the business model of choice is the “collective.”


Collectives are organizations usually funded by alumni and big donors of a university, that direct their funds toward NIL deals for the top athletes at their respective schools.


“Collectives are the future of NIL. They make it a lot easier to get money to the players, but it’s very unregulated,” says Jones. “I think Congress will also put more regulations on collectives because it’s such a gray area.”


Such collectives have infiltrated South Carolina’s schools.


Clemson was an early adopter, creating the 110 Society in late 2023 as the one-stop shop for all things Clemson NIL and an official partner of Clemson Athletics. 110 Society creates opportunities for fans, donors and businesses to participate in and benefit from NIL deals with student-athletes.


The College of Charleston just launched The Edge, a collective to raise $600,000 in the first year to fund sports like baseball, softball, soccer and volleyball. 


“We believe The Edge collective will give our coaches and players the ability to compete on a national level,” College of Charleston athletics director Matt Roberts told Andrew Miller for the Post & Courier. “The collective will help with the recruitment and retention of student athletes. We’ve been involved with NIL in the past, but The Edge takes what we’ve been doing to an entirely new level.”


The South Carolina Gamecocks created The Garnet Trust as its official NIL collective, which works in partnership with The Gamecock Club. Reportedly, at least 90% of membership revenue goes to student-athletes, but the percentage fluctuates monthly. 

 

Currently The Citadel does not have a university collective but does have a football player with an NIL deal.


“I think college institutions and their collectives are going to take over NIL,” says ICON’s Smith. “Some schools even have staff specifically for managing those deals.”


NIL impact on fans


Sports fans have mixed feelings on NIL. 


While a lot of positive feedback has been shown around the growth of NIL for collegiate athletes, sports fans and their opinions are arguably the most important in helping drive the success of a team.

 

The question during this time however, may not simply be if public support is so much in favor of NIL, but rather the restrictions on NIL deals themselves. 


“The top schools have just been turned into, you know, money machines and basically pro athletes in college,” stated Richard Gilles, an avid Kentucky sports fan.


Gilles would have preferred the NCAA direct NIL money to "insurance" for players who get hurt while playing their sport, but he understands the benefit for more money to athletes.


“Before the NIL, these athletes couldn't even go out and get a regular job because of the scrutiny that was placed on 'em,” Gilles said. “It allows them to be able to stay in college and have a little bit of income, to stay stable.”


Josh Kanes, a University of South Carolina student and huge Gamecocks fan, resonates with this.


“I didn't think it was, like, very fair that they could go and play for a school and make the school a lot of money and not make any money themselves,” he said.


Alex Undorf, a lifelong Philadelphia sports fan, is fine with NIL but wants it to be closely monitored.


“NIL is a good thing but it needs to be regulated,” he said.


Gamecock fans Jeff O’Hara and Brad Sales have gotten involved as fan donors for NIL. 

While both like supporting their favorite college team, they see the fine line with just paying players like booster clubs in the old days.  


“The fact is, this is college sports today — without money, you’re not going anywhere,” Sales, a Gamecock fan who donates monthly towards NIL at South Carolina, told The Daily Gamecock. 


Likewise, O'Hara, is a co-owner of CB18 Bar and Grill, pointed out that college sports programs that don’t have a large NIL donor fund will fall way behind.


“When NIL was first created, it was named image and likeness, and it was an opportunity for players to be able to capitalize just on that: their name, image and likeness,” O’Hara told The Daily Gamecock. “And somewhere along the way, it has gotten a little bit misconstrued about schools paying players to get there and things to come."


 



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