In 2021, The NCAA announced changes that allow college athletes to get compensated for their NIL (i.e., name, image, and likeness).1 The issue of monetary compensation for students has always been and will continue to be controversial. Proponents pointing to how administrations and coaches have been making millions from college sports, while students get nothing. Opponents have maintained that the athletes are getting a free college education and that the funds from sports are benefitting the education of all students. But there always have been and remain larger implications and consequences of how the new NCAA rules impacts students, diversity, the future of college sports, American education, and even the US economy. Who can and who should benefit from NIL? This blog answers these questions and provides suggested solutions.
Getting Paid for their Efforts
There are positive aspects of the policy change. For the first time students can legally accept payment for the hours, physical risks, and personal social sacrifices they have contributed to their sports throughout their young lives. These funds can be transformative for the lives of students and their families, many of whom may come from underserved communities. It is only fair that students get a share of the revenues generated by Division 1 NCAA sports ($15.8 billion in 2019).2 To date 450,000 students in the US have received NIL dollars. In the new NIL era, certainly some college athletes have seen a significant increase in their incomes.
So, obviously, the income of those students receiving NIL funding will be increasing. But clarification is needed re: who will get NIL funding. A limited number of college athletes will receive NIL offers. Since football and men’s basketball generate the most revenue, most of the NIL funding (about 67% of it so far) would logically be directed to those athletes. But, also, even only a small percentage of those players will receive offers.
Then there is the issue of how much athletes actually receive from NIL deals. In 2021, despite the media stories about the top earners, the average income from NIL deals was $1000-$10,000. Through May 2022, the average Division 1 athlete had received about $3700 from NIL. So, yes, more students are now receiving payments because of NIL, but not as many or as much as many people think.3
2 Analysis: Who is winning in the high-revenue world of college sports?
By — Andrew Zimbalist, Econofact https://www.pbs.org/newshour/amp/economy/analysis-who-is-winning-in-the-high-revenue-world-of-college-sports
3 The Highest-Paid College Athletes In The NIL Era
Race and NIL
In America, many people are quick to classify, generalize, and often exaggerate. As a result, in this growing age of misinformation, anecdotes can become facts. So, the success of an Oprah Winfrey is looked upon as meaning Black women now have equal opportunity and the election of Barack Obama signified the end of racial discrimination in politics to many. Likewise, the salaries of Michael Jordan or length of dominance of LeBron James appear represent the success of every Black athlete. Some white Americans can see sports as an easy way for Blacks to become rich. With the discrimination persistent in other professional careers, Black Americans can see sports as the only escape from poverty. A whole generation of African-American boys grew up dreaming: “I want to be like Mike.”
The statistics surrounding the economic life of athletes in America are grim. According to sources like Sports Illustrated, American Bankruptcy Institute and others 78% of NFL player and 60% of NBA players go bankrupt within a few years after retirement from very short careers (i.e., in MLB, NBA and NFL, the average career is 4.6 years).4
Since 56% of NFL players and 73% of NBA players are African-American, the issue of professional compensation and the horrendous post-career consequences have impacts of special concern to Black communities.5
In 2007, William Rhoden, a reporter for the Washington Post published Forty Million Dollar Slaves: The Rise, Fall, and Redemption of the Black Athlete.6 Rhoden details the long American history of the exploitation of Black athletes. He explains that while Blacks are now allowed to play and get paid well for sports (they had been denied access until the last half of the 20th century), they are still denied management and ownership positions. It was and remains very controversial.
Some of the same controversies that were hotly debated when Rhoden’s book was released will arise again. There are whites who feel Black athletes (often they cite the myth that all Blacks are physically superior and good at sports because they were bred to be during slavery) are being overcompensated and/or should be grateful for just being allowed to go to college or to play professional sports.
Others see NIL as just another way to exploit Black students, and that the same college administrations and their sponsors/alumni/boosters continue to make most of the money. Many NIL-related companies have sprung up and NIL is expected to become a $5-8 billion industry.
While the media focuses on the few students (e.g., Bronny James—LeBron’s son–$7.5 million) that are making millions, obviously most students will get little or just a short-term benefit.7
6How Athletes Go Bankrupt at an Alarming Rate
6Why Do Professional Athletes Go Broke?
740 Million Dollar Slaves By William C. Rhoden
The Impact on Sports
With the key role sports play in the American economy, there are also economic implications of NIL for universities and their supportive communities.
There has been some hyperbole about the NIL leading to “the end of college sports as we know it.” Students have obviously been given some more power; the best athletes can switch colleges, go to the highest bidders. It will put greater pressure on coaches, having to continually juggle rosters, and figure out new ways to recruit and retain students. But a few wealthy universities have always attracted the top athletes and will continue to do so. While it may be more challenging for colleges to recruit/retain the top students, and NIL will change how student athletes are recruited and retained, it is difficult to envision Division 1 or professional football being mortally wounded by NIL issues.
Long-Term Impacts on Students and Communities
It was very concerning that the NCAA initially changed the NIL policy in 2021 without any regulations or rules to protect students. Wealthy parents can ensure that NIL offers are legally vetted and will set up ways to best manage the money. If their children do not get pro offers after four years of college, they can fund more continuing education or absorb them into their family businesses.
On the other hand, families from underserved areas will continue to be more susceptible to getting swindled into bad deals, in which the NIL funds will be a short-term or one-time boost and/or the student may be trapped into a terrible long-term deal if he/she does pursue a pro career.
Top student athletes have very complex sports schedules and may not be getting the great academic education they were promised. This becomes a major problem finding good jobs post-graduation if they do not get selected in the draft.
Of the over 450,000 students in NCAA sports in the US, less than 2% will have professional careers.8 If they have not gotten a “saleable” degree and they do not have wealthy families to fall back on, what is their Plan B? If the university athlete is not in an NIL-attractive sport (e.g., primarily football or basketball); is not destined for a pro-sport career or got injured somewhere along the way; did not get sufficient education/training to enter a good non-sport career; or is not prepared or wealthy enough to move onto grad school, it appears the system is sending unprepared students back into their underserved neighborhoods.
8Top Ten NIL Earners by Sean Labra
9NCAA Recruiting Facts
Some universities (e.g., Arizona State University had a 92% Graduation Success Rate (GSR) for its student-athletes in 202110) are doing well. But all universities should be focusing on enhancing graduation rates for ALL students and preparing them for either graduate study in needed industries or long-term, fulfilling careers, whether students go onto pro careers or not.
There is an on-going controversy over the worth of a college degree. According to USA Facts, between 2000 and 2019, the price the average college student paid for tuition, fees, and room and board increased 59%.11 With student loans, stagnant job markets, unmarketable degrees, rising costs-of-living, athletic students often face daunting post-graduation challenges if they are not among the 2% who become professionals. Because they have spent most of their time on the field and not in the lab or library, they are usually not prepared for any career or industry.
Vocational schools around the country are improving their programs to better prepare students for either specific careers or for going to four-year colleges. Likewise, colleges should ensure that athletes, who have brought so much entertainment and revenue to their schools, are equally prepared for a professional or non-professional sports career.
We Need to Add “Ownership” to NIL
About 56% of people now wonder if going to a 4-year college is even worth it.12 There are changes that would benefit both athletes and non-athletes. Universities must seriously and quickly re-examine the courses being offered (e.g., are they consistent to the new post-graduation job needs–from technology to business to health to agriculture)?12
Consideration should be given to going “back-to-basics.” Time, money, and emotions are being wasted by all sides on banning/not banning books and speakers. These are ridiculous fights to be having in the world’s biggest democracy. Free speech should not be a left or right-wing issue; it’s an American value that needs protection, and the history of all Americans, regardless of race or sex, should be acknowledged and included in all studies.
10Sun Devil Athletics Reaches All-Time Best Graduation Success Rate
11The Price of College is Rising Faster than Wages for People With Degrees
12Was Your Degree Really Worth It?
More education, knowledge and priority in colleges should also be devoted to integrating decision-making, critical thinking, negotiation, public administration, and financial literacy into the orientation and curriculum, starting with first-year students. Honing these skills, knowledges and abilities will not only enhance the lives and livelihoods of the students. Having a new, sustainable pool of educated and motivated graduates with common sense and problem-solving abilities will benefit every business and industry and institution in America.
Colleges Should Be Open to New Ideas and Methods
Colleges and universities, especially those who are not among the big spenders that will be attracting the top athletes, should be seeking out ideas on how to make their offerings more attractive to student athletes and parents in other ways. Top priority for both athletes and non-athletes should be education of the students, that students leave more knowledgeable and capable of supporting themselves than when they arrived. Moving back in with parents should not be the only option for any graduate.
For example, the organization—The World’s Best Connectors LLC (WBC)–is launching a non-profit named NILO LIMITED. NILO LIMITED oversees a business education program for college athletes called PROJECT NILO (www.projectnilo.com). “NILO” adds “Ownership” to NIL. The vision is to create a new generation of talented and skilled business executives, who can return to their own or other communities and enhance the quality of goods and services to the benefit of all Americans.
PROJECT NILO (www.projectnilo.com) is a non-profit that consists of a series of 90-minute virtual classes, featuring experts from businesses, academia and the sports industry discussing issues from self-image branding to creating business plans to giving presentations. Those will be followed by real-world working experiences. Each student will leave the program with his/her own business.
This non-profit initiative differs from other current programs in that: 1) it focuses on providing business management knowledge and skills to both the student AND parents, 2) it is open to any student (male, female, LBGQTIA+, students with disabilities, etc.) in any sport at any school and 3) involves both virtual education and business experiential opportunities. The goal is to have each student in the program graduate with his/her Plan A and/or B. WBC wants to help a talented and deserving student, not just get his/her photo on a cereal box, but to start a business in his/her hometown that manufactures cereal boxes.
PROJECT NILO is being promoted by the for-profit NILO MEDIA, a collaboration which includes NILO TV—a 24/7 OTT television station—that focuses on “Everything NIL.” NILO TV includes interviews, podcasts, sponsors, commercials, live action, webinars, and other exciting educational and informational material. NILO MEDIA also partners with ActionEra and others to promote innovative apps, websites, and other communication technology. Other students (non-athletes), who want to become sports reporters, filmmakers, and other communication or marketing professions are being engaged and trained in these aspects of the sports industry.
Universities should be open to programs, such as PROJECT NILO, which are not competing with, but supplementing on-going operations. This type of program will strengthen the competitiveness of any partnering university or NIL company for new student recruits. There is a wide world of worthy sports, many of which do not yet, or may never have, the interest of the NIL industry. But these sports and their participants deserve attention as well.
Businesses Should Help Establish New Partnerships
The NCAA issued policy changes in 2022. which validated the approaches PROJECT NILO is advocating and should foster partnerships, not competition. The escalating negative monetary competition among universities over athletes is not healthy for students or schools.
Business leaders can play a positive role by taking more of an interest in their local colleges and universities, not just by sending a check, but by getting involved on educational boards and committees, becoming mentors, instructors and influencers that can facilitate positive outcomes for all parties. Private business leaders and can play a major role in helping universities and organizations, like Project NILO help students.
I am a member of the Financial Policy Council (FPC), an organization dedicated to promoting economic growth and wealth creation. Project NILO, endorsed by organizations like the FPC, also presents several monetization opportunities for investors. Investors could sponsor or partner with the PROJECT NILO and the NILO MEDIA programs, gaining visibility for their business, and fostering new business avenues. Investors could fund the creation of educational content, which could be monetized through various models such as subscriptions or pay-per-view. Furthermore, as athletes gain financial literacy and start their own businesses, investors could benefit from endorsements or even invest in these new athlete-led ventures.
Better Prepared Athletes Can Help Businesses, Communities, and the US Economy
While it is important for businesses to get involved in supporting and educating athletes, there are many benefits to businesses for doing so. For example, it has been challenging for businesses to attract Gen Z and Zoomers as interns and beginning professionals since the end of the pandemic. Athletes are usually disciplined, energetic, and often charismatic. PROJECT NILO can connect business sponsors with trained and eager interns and work study students and, ultimately, be a source of new employees or potential management program members or spokespeople/influencers.
Imagine if a student named Elena, a PROJECT NILO participant, completes the virtual class program; serves an internship with a marketing company arranged by PROJECT NILO; has her accomplishments as a gold medal winner at the Paralympics promoted on NILO TV and the NILO MEDIA app; and, right after graduation, successfully opens her LLC, created during the program, which employs her family members and specializes in selling athletic wear specially designed for Paralympians.
This hypothetical scenario could/should/would be repeated throughout the country, benefitting students, their families, their communities, and, collectively, the US economy.
PROJECT NILO’s success could even set a precedent for similar initiatives in other sectors. For example, young chefs in the culinary world, often navigating complex business landscapes, could benefit from a similar program that educates them about restaurant management, contract negotiations, and supply chain logistics. In the fashion industry, emerging designers could be empowered with knowledge about manufacturing, retail partnerships, and brand marketing. Even budding entrepreneurs, across all sectors, could gain from a program teaching them about startup financing, business law, and strategic planning. Regardless of their majors, a supplemental program like Project NILO can help any student more successfully manage their businesses after graduation. The ripple effect of Project NILO’s success could lead to a wave of educational programs that foster a more informed, empowered, and equitable economy.
The Financial Policy Council (FPC) is an example of a partnership which promotes economic growth and wealth creation. It showcases articles like this and initiatives like Project NILO as part of its efforts to support to contribute to a thriving environment for private companies and investors. In FPC, I will be using my many decades of seeing what is good and bad about the greatest democracy in the world to publicly speak, write about, advocate and, through consulting, help business leaders develop positive economic solutions, not new gripes.
Project NILO is an example of a partnership involving many business and community leaders, who are concerned with the state of education. Some examples of current potential partners include NIL companies, like Pliable, (we can jointly recruit students, with the NIL company providing the contract initiation/management, while NILO provides the educational/internship components); businesses (as sponsors and to provide work opportunities during and after the program); sponsors and donors (as speakers and contributors who are interested in supporting business development and education); and universities (NILO students can be at any school, but some schools are interested in partnering more proactively with/promoting Project NILO to their students).
Higher education has always been a dream and aspiration for Americans. Historically, all Americans have not been afforded access. But now there are wonderful opportunities for residents from underserved communities and recent immigrants, as well. It is time to harness the brains and talent of ALL our populations. Athletes can provide more than temporary entertainment value.
The NCAA policy change can be a boon to the socio-economic power of the US, but only if it is implemented in a way that still encourages quality education and nurturing of saleable skills for all NCAA student athletes. Giving students more money, but with no business or financial management education, is setting them up for failure. The focus should be not only on providing students the just compensation they deserve for the notoriety and money they attract to the school, but on providing them the skills to carry on a successful career post-graduation.
Entrepreneurship and being able to create and manage a business are skills that will benefit society as well as athletes, their families, and their communities. We need to add “Ownership” to the concept of “NIL”, which is why the Project NILO initiative was created! If you are interested in helping create a new generation of young, talented, committed business, visit the website at www.projectnilo.com.
Business, sports and academic leaders, philanthropists, and investors, who would like to support PROJECT NILO or NILO TV, should contact Denise@projectnilo.com. Students (first-year through juniors) and their parents interested in participating in PROJECT NILO, whose next sessions will be launched in January 2024, should send an email to email@example.com.