- Tom McMillen, President & CEO, LEAD1 Association (Moderator)
- Jim Cavale, Founder & CEO, INFLCR
- Kristina Minor, Associate AD for Compliance, Northwestern University
- Casey Schwab, CEO & Founding Partner, Altius Sports Partners
*Nothing in this recap shall constitute legal advice.
Since July 1st, when the NCAA’s Interim name, image, and likeness (NIL) policy went into effect, a patchwork of state NIL laws, as well as institutional NIL policies, have served as the regulatory backdrop for college athletes aiming to monetize their NIL. Prior to the NCAA’s Interim policy, however, one common thought was that only those institutions in states with effective NIL laws would engage in NIL activities on July 1st. As a result, prior to then, many coaches were hesitant to engage in speculative discussions about the future of NIL. But now that we are approximately 100 days into the NIL era, and every institution can participate in NIL, regardless of whether they have an effective state law, one thing that has become very clear is that coaches must be educated on NIL, as it has become ubiquitous in recruiting conversations. Questions, therefore, arise about the role of coaches relative to NIL and recruiting, as well as coaches’ communications with other athletics staff, including compliance and licensing departments on campus. This was the topic of LEAD1’s latest webinar moderated by LEAD1 CEO and President, Tom McMillen, featuring INFLCR Founder & CEO, Jim Cavale, Altius Sports Partners Founding Partner, Casey Schwab, and Northwestern Associate AD for Compliance, Kristina Minor. Here are some of the important takeaways from the panel discussion.
- Coaches are realizing that NIL now plays a fundamental role in recruiting. According to Cavale, coaches are realizing that in recruiting conversations, they must be informed enough to communicate both the value of their program relative to potential NIL opportunities, as well as the transactions that have already occurred for their college athletes. “Now coaches really want to be in on the conversation,” said Cavale. “Compliance led the [NIL] conversations initially, and coaches weren’t really showing up in the beginning. But now coaches really want to be involved in the conversation, particularly with National Signing Day approaching. So, the involvement of coaches over time has been the biggest shift since the start of NIL.” “Assistant coaches also need to be able to intelligently speak to NIL,” said Schwab.
- While NIL can be analogized to a new recruiting “currency,” there’s a fine line between communicating previous NIL transactions versus using it as a recruiting inducement. NIL is a “new currency in recruiting,” said Minor. “We need to be transparent about that, the rub [however], is how this is used in recruiting.” In other words, there is a distinction between inducing an athlete to attend an institution premised upon NIL guarantees versus merely communicating previous NIL transactions that have already occurred as well as the ways in which the athletics department helps guide their athletes relative to NIL. “There is nothing wrong with saying look at the deals that our athletes have already done,” said Schwab.
- NIL data being used in recruiting is a good thing and there will only be more data over time. According to Cavale, more than 5,000 transactions have been reported on INFLCR’s NIL platform, the average transaction being $1,308 and the median transaction being $81. In addition, 54 percent of all transactions have been reported by Olympic sport athletes. “This time next year there will be even more data,” said Cavale.
- Another fundamental question for college sports is whether athletics departments should be involved in helping facilitate NIL arrangements between their college athletes and third parties. According to Schwab, “some schools are at a “5” and other schools are at a “9.8” in terms of facilitating [NIL agreements]. The involvement of athletics departments in facilitation depends upon the state law and/or the institutional NIL policy established by the athletics department. Facilitating the actual deal, such as negotiating, or merely connecting a local business with a college athlete, are very different, said Cavale. In addition, according to Cavale, for individual athletics departments, getting their MMR partners and licensing departments all on the same page will make facilitation “more efficient,” given that college athletes want to use school marks and MMR partners may have preexisting relations with businesses that want to spend on college athlete NIL opportunities.
- NIL is unlikely to trigger Title IX scrutiny. According to Minor, given that third party payments directly to athletes does not generally involve institutional involvement, NIL would be unlikely to trigger Title IX scrutiny. Of course, the more involved an athletics department is in facilitation, the increased possibility of legal scrutiny.
- Cavale views NIL as potentially “additive” regarding institutional revenue. While some have stated their concerns about NIL possibly displacing sponsorship and philanthropic income previously received by athletics departments, Cavale views NIL as potentially “additive” for athletics departments based upon new businesses entering the college sports space and those new entities using institutional marks.
More in the recording can be found on other relevant NIL topics, including the international college athlete NIL issue.