How the New NIL Era is Redefining College Athletics

Marquette’s Kam Jones, who had his NIL Valuation at 1.6$ Million (Picture Via Marquette Athletics)

For as long as college sports have existed, the biggest payday for an athlete might have been a bowl game gift card and bit of fame. In 2025, that same player might earn hundreds of thousands of dollars, before he even steps onto the field. With the new era of NIL bringing in wild amounts of money directly to student athletes, the floodgates are now open for the universities to share athletic revenue directly with their players. NIL (Name, Image, and Likeness) rules came into effect in 2021 which allowed student-athletes to make money through individual brand deals, sponsorships, and endorsements. For the longest time, the model was simple: players in profit-generating sports like football and men's basketball often receive full scholarships, which cover tuition, room, and board. But that compensation pales in comparison to the billions that come in from television deals, merchandising, and ticket sales. The NCAA alone generated $1.14 billion in revenue in 2022, according to its financial statements.

Now that revenue is flowing directly to the athletes. This would mean that a star quarterback can receive a $150,000 salary from the school, in addition to NIL funds and free tuition. Virginia Tech sports beat reporter Anderson Batter had this to say on the dynamic that NIL has established: "There is going to continue to be a noticeable shift towards the professionalization of college athletics (...) especially the big moneymakers." Some schools are already attempting to reorganize their internal operations for this new financial landscape. In March, the University of Kentucky became the first athletic department to restructure itself as a private, for-profit corporation. Called Champions Blue LLC, the entity is established to better manage athlete compensation and sponsorships. More importantly, perhaps, it gives the university legal insulation as employment models change. University of Kentucky Director Athletics commented in their release as follows: "Our mission remains the same: to put championship rings on fingers and diplomas in hands, But how we get there — how we fund our teams, secure our future and support our student athletes — will have to be different." That's what this new model is all about, a realization that in the market we're in that we have to be innovative. We have to find new ways to generate revenue, manage costs and look at possibilities to grow.

Meanwhile, the University of Texas recently made a public declaration that it would spend up to $40 million annually in football compensation, encompassing revenue sharing and NIL assistance via the Texas One Fund collective. With revenue sharing now the standard, the traditional scholarship model may be ripe for a radical transformation. The NCAA now limits schools to a certain number of athletic scholarships per sport. The House agreement, however, proposes removing those scholarship restrictions in exchange for overall roster limits, which would grant the schools more flexibility, but also more discretion. Opponents argue that it would leave room for disparity, particularly for non-revenue sports like swimming or gymnastics. “These large D1 sports can become increasingly polarized, because you must be constantly re-investing in the massive sports, rather than essentially subsidizing the smaller sports. (...) Those sports may now require substantially more direct donor funding," Batter said.

U.S. District Judge Claudia Wilken, who is overseeing the settlement approval, has also expressed the same concern in court. Lawyers for the plaintiffs said they're attempting to determine how to handle the possible displacement of scholarship athletes, specifically in women's sports. Yet, there quite frankly is no easy answer to a complex issue like this. In fact, at the end of this case, Judge Wilken said "I think we've got problems with this, and I don't have an idea of how to fix them." So I'm gonna just have to throw this back on all of you and see if you all can do any better." 

For student-athletes, NIL has been massive already. Dylan Adelman, a freshman pitcher at the University of Chico, and formerly the University of Dayton, sees the impact of NIL on a daily basis. "At Dayton, the basketball guys got serious money, you could just tell.". (.) Meanwhile, most of us on the baseball team weren't even on full scholarship." There remain plenty of positives to the NIL era, however. "I still like having the opportunity to get paid, guys who work that hard and bring eyes to the university, deserve to get paid." The combination of NIL and revenue sharing is already reshaping recruiting wars across the country. Players now weigh financial opportunities in addition to academics and coaching when choosing schools.

One Marquette athletics fan, Jack Verwiel, said "They shouldn't even come near the same level of money that the pro's get. (…) I mean, they're still student-athletes, right? I have trouble comprehending paying what I pay while they get even more than a free education." And numbers speak volumes. Power Five players averaged $11,000 in NIL deals alone in 2023, according to Opendorse, an NIL platform. For top players, that figure exceeded $250,000 with revenue sharing still to come.

With athletic departments forming LLCs, NIL collectives acting as marketing agencies, and schools paying athletes, skeptics wonder if the NCAA can—or should—still exist. "This has the potential to be a cautionary tale about why you don't give these college kids hundreds of thousands of dollars." claimed Batter. But others see this as a long-overdue correction. “I find it really neat that these guys are able to earn a share of the pie from the amount of money these sports bring in," Marquette Freshman Ravi Goradia said. "I can understand how much they work, why not give them some money for it."

Regardless, the seismic shift in the landscape of college athletics is real. The traditional model of "student-athletes" as amateurs, playing for the love of the game while attending school, is fading away. The focus is now squarely on the commercial potential of these athletes in the form of television contracts, massive stadium gates, or high-dollar sponsorships. The typical athlete, especially in high-grossing sports such as football and basketball, is now viewed more as a professional performer, no longer a student who happens to manage academics and athletics, but a brand in and of themselves. As these events unfold, people speculate about how far the NCAA will stretch in attempting to address this new reality. Will schools be able to bid for athletes in a professionalized marketplace, where economic incentives outweigh old-fashioned academic enticements? What will this do to the character of competition, particularly for smaller schools or those in non-revenue sports that won't be able to match the economic munificence of the powerhouse programs? And with the advent of NIL collectives and pro-level compensation, there's a feeling that the "student" in student-athlete is growing increasingly antiquated. The professional leagues, the NBA, NFL, and others, will be watching closely as the line between college athletics and pro leagues continues to blur. Will this even the playing field, or will it further codify existing inequities between top-tier and mid-tier programs?

Image Via ESPN

With colleges across the country bracing for the changes, the question then becomes: How will the landscape of college sports evolve as players begin to receive their full economic prowess? Only time will tell if the newest wave of change will result in more parity, or if it will increase the disparity between the haves and have-nots of college athletics.

As college athletics rushes headlong into this brave new world of revenue sharing and individualized income, the effects are only just beginning. Athletic departments are hiring lawyers, athletes are hiring agents, and the NCAA is rewriting its rulebook under judicial order. For student-athletes, the trade-off between "student" and "professional" is no longer perhaps theoretical, but financial. Whether this will lead to more parity or increased imbalances remains to be seen.

Works Cited:

AP News. (2024, May 31). Attorney says NCAA deal should resolve judge's concerns over roster limits, criticizes Saban. https://apnews.com/article/f14c384b5aceba35b567e1daeb3e2f76AP News+1Yahoo Sports+1

AP News. (2024, May 30). Kentucky changes its athletic department to an LLC, hoping to become more nimble in finding revenue. https://apnews.com/article/1511ccf2b47bf669faba159174cb8cc8AP News

AP News. (2024, May 30). NCAA sets the stage for paying college athletes. https://apnews.com/article/ncaa-settlement-b6ff58d62f93359789dde1626f827bf1AP News

CBSSports.com. (2024, May 30). How historic House v. NCAA settlement will impact college athletics on and off the field for years to come. https://www.cbssports.com/college-football/news/how-historic-house-v-ncaa-settlement-will-impact-college-athletics-on-and-off-the-field-for-years-to-come/CBSSports.com

CBSSports.com. (2024, May 30). House v. NCAA settlement winners and losers: Athletes take monumental step, non-revenue sports at risk. https://www.cbssports.com/college-football/news/house-v-ncaa-settlement-winners-and-losers-athletes-take-monumental-step-non-revenue-sports-at-risk/CBSSports.com

Pells, E. (2024, May 30). Objectors have final say and $2.8 billion NCAA lawsuit settlement. AP News. https://apnews.com/article/college-lawsuit-settlement-roster-limits-2cdd17ee4b6081dd8892b3dc998d03e8AP News

Sage Journals. (2024, February 15). Getting NIL for Unpaid Labor: Self-Branding U.S. “Student-Athletes” as Content Creators. https://journals.sagepub.com/doi/abs/10.1177/15274764251314177SAGE Journals+1SAGE Journals+1

The Wall Street Journal. (2024, May 30). The 75-Year-Old Woman Who Has Become the Most Powerful Figure in College Sports History.https://www.wsj.com/sports/judge-claudia-wilken-ncaa-241ac0f3

And a special thanks to Dylan Adelman, Anderson Batter, and all of the fans that I spoke with.