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Impact of NIL Beyond the Deals

by michelle

Impact of NIL Beyond the Deals: An Unprecedented Growth Opportunity for Women’s Sports 

The impact that NIL reform will ultimately have will extend beyond the deals. Way beyond.

For the first two years, athletes, coaches, admins, service providers, media, brands, fans, EVERYONE around NIL has been hyper-focused on the transactional deals and dollars:

  • “We’ve had over $3m in disclosures in the first year!”
  • “My athletes averaged $20k each. You can expect to make at least that much if you come here!”
  • “I now can afford to go out to eat!”

It makes sense: Deals are tangible, catch headlines, and can attract recruits. And obviously without these transactions, there wouldn’t be any additional impact.

But we aren’t here to talk more about the deals. We’re here to explore what’s happening BECAUSE of NIL reform and the new ACCESS to NIL opportunities. 

So, let’s look beyond the transactions and dive into some current trends, mindset shifts, and behavior changes that have the potential to create unprecedented growth opportunities for women’s sports.

Digger Deeper Than Deals

“Michelle, NIL is just pay-for-play for high-profile football and men’s basketball athletes. The typical college athlete has no marketing value. Come on now.”

If I had a dollar… 

But I get why people may think that: Over the first two years, the media has been hyper-focused on the million dollar contracts, car deals, and recruiting inducements. Authentic brand partnerships, where a business anticipates a positive return on investment (ROI) from their marketing campaign, don’t make headlines very often. 

Also, if you follow NIL closely, you know that the overall participation by college athletes has been lower than most projected. Industry experts estimate that only around 20-25% of D1 athletes have completed an NIL deal. Going even further, if we remove the mass activations that were prominent for a while (e.g. Barstool, IV liquid), that percentage likely drops to between 10-15%.

So, are people correct in saying that most college athletes have no NIL value? If we just analyze the transactions of the first two years, that sure is what it looks like. 

However, I’m confident that the first two years of data isn’t the full NIL story. Not even close.

What’s Been Happening 

At its foundation, NIL reform has created significant new opportunities: Half a million college athletes can now be compensated through endorsements and sponsorships, something that would’ve previously cost them their NCAA eligibility. Millions of businesses, especially smaller brands that were previously entirely priced out of sports marketing, can now partner with college athletes for affordable campaigns.

For both athletes and businesses across the country, these new opportunities have set off a series of mindset shifts and behavior changes.

And the tangible results of those changes are barely starting to surface. Let’s dive in.

For the First Time, Athletes are Incentivized to Build Their Brands

Before NIL, there wasn’t a widely known or realized value for most college athletes to develop a personal brand, build large platforms, or to actively engage with their audience.

Sure, there were anomalies of college athletes who genuinely enjoyed content creation and had a knack for being influencers. And of course, there were a couple hundred elite athletes in revenue generating sports that amassed a huge following because diehard college sports fans are, well, diehard.

But for the majority, there was no reason to spend the time and energy strategizing on building a monetizable platform. 

So when July 1, 2021 rolled around, less than 1000 of the 500,000 NCAA athletes were prepared to take advantage of this new opportunity. Immediately after, many began working on strategies to position themselves for NIL deals. The problem, however, is that building an authentic brand and platform that is monetizable typically takes YEARS. A lot of these athletes, especially after seeing the headlines of million dollar deals but finding no NIL success themselves, quickly grew discouraged and decided that NIL was not worth the effort.

The Behavior Change

Now that college athletes can monetize their NIL, there is a tangible incentive to put time and energy into building a brand and growing an engaged community.

While many current college athletes haven’t been able to immediately capitalize like they hoped, high school athletes are looking up at this new opportunity, strategizing, and positioning themselves to successfully engage in the space once they arrive on campus. For many recruits, working on their NIL strategy is now a part of their overall preparation in transitioning to being a college athlete.

Additionally, the ecosystem surrounding NIL is adapting quickly. Since September 2021, the number of schools providing NIL services for their athletes has grown 131%. Even more impressively, athletic departments that have an NIL-specific employee have grown over 1000% in the same time period and show no sign of slowing down. Beyond more athletes getting NIL support, the services are innovating and improving, meaning the utilization of them will continue to increase. 

Finally, the trend of universities providing NIL support is trickling down to the junior level. Over the past year, top clubs across many sports have started investing in education, tools, and training to assist their athletes in preparing for NIL opportunities. While not yet the “norm”, there is a strong possibility that this trend will mirror the growth trajectory we’ve seen in universities.  This is because elite clubs, much like their collegiate counterparts, are incentivized to invest in innovative services for their athletes in order to recruit the next top talent to their organization. 

The Impact for Women’s Sports: More Eyeballs On Your Athletes = More Eyeballs On Your Sport

Women’s sports have historically had a viewership problem. Now, there has been continuous growth and 2023 has already been a record year, but there’s still a lot of room for improvement. 

The impact of NIL, or more specifically of a league’s future stars now getting started in building their brands years prior to turning pro, is not yet measurable. But it’s not difficult to see the potential: Athletes that go on to play professionally will likely bring much bigger audiences with them. The leagues they compete in, in turn, will benefit from increased brand exposure through their large platforms.

For example, when a pro athlete shares sports-related content with their audience, their organization’s brand will likely be visible in some capacity (on the jersey, signage, etc). For many of the same reasons that businesses engage in influencer marketing, these leagues will benefit from reaching new audiences (that likely are interested in their sport), increasing awareness of their events (as athletes promote their games), and growing brand loyalty (people trust people).

The commissioner of the WNBA, Cathy Engelbert, is seeing her league reap the benefits already, “These players coming out of college now have huge followings. We’re going to benefit from their followings, from the NIL they have. With all the negative out there about NIL, it’s a huge positive for us.”

With the well-publicized NIL success of college women’s basketball athletes this year, I anticipate that the benefits that Engelbert is referencing will likely grow exponentially over the next decade. Why? Because girls basketball players all over the nation are witnessing their role models reaping significant benefits from developing their personal brands and cultivating engaged communities. Seeing this inspires a mindset shift among these girls, making them believe that they too have the potential to achieve similar success. As a result, they start strategizing on actions they can take to ensure a similar path for themselves.These behavior changes are just getting started and the WNBA is positioned to benefit greatly.

For the First Time, Businesses are Partnering with Athletes

Before July 1, 2021, businesses were instructed to stay away from college athletes. They were told that any benefit, even providing a complementary soda with their meal, could result in the athlete losing their NCAA eligibility. For decades and decades, companies that wanted to get their brand in front of sports fans were limited to brand partnerships with professional athletes OR corporate sponsorships with a sports entity (e.g. athletic department, pro franchise, etc).

Both options were (and are!) cost-prohibitive to small businesses, resulting in the vast majority never engaging in marketing campaigns with athletes. 

Then, seemingly overnight, businesses went from being told “stay away from college athletes” to “you can now provide as many sodas as they want, heck, even throw in some cash, as long as the athlete performs some sort of activity (even just a tweet!) for the compensation.”

Immediately, we saw national brands jump in. After all, they have dedicated staff, a legal team, and all the resources they need to ensure their campaign was a success.

However, small businesses – aka the local brands that would benefit the most from NIL deals with their local college athletes – have been slow to engage.

What’s the deal (or lack thereof)?

Behavior Change #1: Local Businesses Adopting Influencer Marketing

The most common type of NIL deal, by far, is an athlete promoting a business’ products or services to their audience. This type of marketing, influencer marketing, has grown exponentially over the past decade and national brands are constantly reporting great ROI from these types of campaigns.

However, influencer marketing is not as commonly used by local businesses. Why?

For starters, it’s way more complex than the traditional advertising they’ve always done. Local businesses are used to getting a list of options, picking the one they want, paying the fee, and getting the benefits they paid for. The ROI is proven and consistent. The risk is low.

Influencer marketing is anything but that. Businesses must allocate a budget, determine their goals, create a campaign (including activation details, payment timeline, posting requirements, etc), select their influencer(s), figure out how to get in touch with them, negotiate the terms, sign the agreement, complete the activation, pay the talent, and measure the overall success.

Before NIL, figuring out influencer marketing didn’t make a lot of sense for local brands. Even if these businesses weren’t limited by a small staff and access to resources, identifying an “influencer” who could drive a positive ROI from their campaign presented a big challenge. Think about it: the customers of local businesses are typically, you guessed it, local. In order for a local brand to see a positive return from an influencer marketing campaign, they need to partner with an individual that’s locally influential and has a hyper-localized audience.

Enter the college athlete.

College athletes, even those who aren’t high-profile, generally have platforms that are ideal for local influencer marketing campaigns: Their followers are mostly from either their hometown or their college town. Their audience is heavily skewed towards the 18-24 year old demographic, which brands aren’t reaching through their traditional advertising methods. And finally, they are also followed by college sports fans – a group that is 1.6X more likely to have incomes greater than $100,000.

Additionally, local businesses can now incorporate influencer marketing as a recurring strategy, knowing they’ll always be able to find partners in their local college athletes.

So, what’s taking so long?

In a nutshell, it’s a long road to adoption: Even before figuring out all the pieces of influencer marketing addressed above, local businesses must first become aware of what NIL is (I think we’ve gotten here for most!), then they have to understand why an NIL campaign would benefit their business, and they then have to shift their long-standing mindset that partnerships with athletes are cost-prohibitive and/or that doing business with a college athlete is illegal.

It’s a lot. 

However, similar to how high school athletes are looking up at their college role models, local businesses are taking notes from NIL activations within their industry, learning best practices, and slowly but surely, coming around to launching their first campaign. 

Behavior Change #2: Brands Are Reporting More Campaign Success With Female Athletes

In addition to local businesses starting to understand the value of influencer marketing with college athletes, there’s another trend happening across the entire industry: Women are consistently outperforming men.

“Despite female athletes’ relative lack of representation so far in the collegiate NIL space, they generate 4x the total audience engagement of male athletes, and 7x more engagement per deal”, SponsorUnited shared.

They continued, “While men have inked over 1,000 total deals with 2,000 total social media posts–compared to the 550+ deals and 1,100 posts for women–female athletes tally a total engagement score of over 27M, versus 6.5M for male athletes. Women’s posts engage followers at nearly 8x the rate of men’s posts (48K vs. 6.3K), while their percentage of engaged followers also trumps men’s, at 5.5% vs. 4.6%, respectively.” 

Female athletes delivering better ROI for their brand partners than their male counterparts is, you guessed it, shifting mindsets. The long-standing narrative that women’s sports and their athletes don’t have significant marketing value is changing.

With businesses around the country, from the local level all the way up to national brands, beginning to understand this, female athletes will continue seeing their NIL opportunities increase.

The Impact for Women’s Sports: More NIL Opportunities For Your Athletes = More Business Connections To Your Sport

Already, hundreds of companies that had never considered partnering with athletes before are engaging in the NIL space. By the time this landscape fully settles, thousands of businesses will have had their first experience with your sport through an NIL deal. 

So, what’s the opportunity for women’s sports?

Beyond the increased exposure that women’s sports will get through their college athlete’s NIL deals, businesses that have repeated success may even take it a step further: Over the next few years, I wouldn’t be surprised to see new corporate sponsors for pro teams and/or leagues that got their start in that sport through an NIL deal.

The WNBA is already starting to see this happen. “[NIL] is a huge positive for us. I may not have predicted it that way three, four years ago, but they’re getting huge followership and marketing. It’s attracting broadcast partners and corporate partners to us when [college players] come into our league. So I think it’s a huge plus,” shares Cathy Engelbert.

Tips to Maximize This Growth Opportunity 

Although women’s sports will likely see benefits of NIL regardless of taking any action, organizations that embrace NIL and proactively support their athletes will be in a better position to maximize the growth opportunity. 

As discussed earlier in the context of women’s basketball, the success of athletes in a particular sport influences other athletes’ beliefs about their own potential for NIL opportunities. When athletes believe in these opportunities, they invest more time and effort into growing their audience, resulting in more eyes on the sport.

Conversely, if athletes don’t see their peers benefiting from NIL deals, they may assume such opportunities don’t exist for their sport, leading to less dedication to their NIL strategy.

Since NIL is still in its early stages, athletes’ perceptions of its potential within their sport are still subject to influence. By taking a proactive stance and supporting athletes in achieving NIL success, organizations can shape the overall landscape and establish a foundation for long-term benefits in their respective sports.

Help Them Grow Their Platforms

When athletes are getting started in NIL prep, it’s easy for them to get discouraged. As noted earlier, building an authentic community is a slow process that can take years. Nevertheless, one proven approach to expedite this growth is by leveraging the support of prominent brands that share a similar target audience.

Professional leagues, national governing bodies, clubs, teams, etc – I’m looking at you. 

Recommendation: Develop a comprehensive social media strategy that prominently showcases your athletes (or future athletes!). This strategy should encompass collaborative posts, athlete takeovers, and sharing of their content.  And please, don’t forget to tag them!

Provide Your Athletes with Brand Building Tools and NIL Guidance

Positioning oneself for NIL deals is not easy or intuitive for most. The “best practices” for establishing a personal brand, cultivating an authentic audience, and producing compelling content are constantly evolving. What worked well yesterday could never work again. 

Recommendation: Demonstrate support for your athletes by making investments in brand-building tools and providing comprehensive NIL guidance. These resources can offer valuable clarity and alleviate the daunting nature of this process.

Educate Your Audience About NIL

As discussed, it’s a long road for companies to adopt NIL as part of their marketing strategy. However, organizations that have large audiences can help by creating awareness and educating their fanbase.

Recommendation: Incorporate NIL “quick facts” into your marketing content – such as a weekly instagram story or placing a banner in your newsletter. Ready to take it one step further? Host an “NIL & Your Business” webinar to educate the business owners and/or marketing directors in your audience on the NIL landscape and how/why they should take advantage of the new opportunities available to them. 

Want to chat about how to maximize the growth opportunity for your sport? Or want to get a better understanding of how NIL Network can help you navigate this landscape? 

Schedule a call with NIL Network founder, Michelle Meyer

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