What are NIL Collectives?

Thanks to a new NCAA legislative change, college athletes now have the opportunity to earn from their Name, Image, and Likeness (NIL).¹ This landmark legislation has thus given rise to a sudden influx of NIL collectives.

What is an NIL collective?

Put simply, NIL collectives are independent organizations that fundraise money for various universities and give it to attending college athletes in the form of NIL agreement payouts. Several NIL collectives guide their athletes through the NIL endorsement landscape.

NIL collectives are a relatively new phenomenon. In less than two years, they’ve shaken up the college sports scene and spurred some controversy. In this article, we’ll help you understand the impact of NIL collectives now and in the future.

The New NIL Ruling Summarized

For many decades, college athletes weren’t legally allowed to earn money off their NIL. If they tried, they could face NCAA penalties. However, a July 1, 2021 court decision turned this rule on its head. Now, college and high school athletes have the right to be compensated for their NIL.

The NCAA still restricts college athletes to quid pro quo endeavors, which means that college athletes must offer some kind of service to receive NIL payment. This stipulation is meant to prohibit “pay-for-play” dealings, where high school recruits are offered compensation solely to commit to a certain university.

Some states also have additional rules for NIL. In states without clear NIL legislation, universities are tasked with the job of outlining NIL rules and regulations for their student-athletes. Due to the Wild West nature of the current NIL landscape, many people expect the federal government to introduce universal legislation in the future.

Key Players in the NIL Landscape

NIL has impacted nearly every player in the college athletics industry, but the greatest beneficiaries are college athletes and their families. Depending on the NIL valuation, financially, NIL deals have been a game-changer for top-ranking talent. In fact, some star athletes have earned enough money from their NIL to put themselves through college, help their families back home, and build generous nest eggs for the future. After all, some NIL deals can be as high as seven figures.²

In addition to college athletes and their families, the following stakeholders must have a NIL tracker and ensure they stay up to date on the quickly-evolving NIL landscape:

• Sports marketers
• Brands and companies
• Corporate sponsors
• Coaches
• Recruiters
• Athletic directors
• School officials
• Alumni
• Boosters
• NIL collectives

Some of these stakeholders welcome the shift in NIL rules, while others have expressed concern about the impact that NIL is having on the industry.

Understanding NIL Collectives

So, where do NIL collectives factor into the mix? The role of NIL collectives is to support athletes who fall under NCAA bylaws as they take advantage of their newfound NIL opportunities. To this end, NIL collectives may:

• Collect money from boosters and donors to pay student-athletes
• Facilitate various NIL endorsement opportunities
• Empower athletes to make informed NIL contract decisions
• Help athletes monetize their personal brands
• Advise athletes on their off-field ventures

Currently, over 120 NIL collectives have been formed or are in the formation process.³ Over 90% of Power 5 schools and 100% of SEC schools have at least one NIL collective.⁴ One out of three NIL collectives currently has nonprofit status. Some NIL collectives service specific universities, while others lend their support to several at a time.

While NIL collectives act as independent organizations from the universities they’re affiliated with, it’s quickly becoming clear that universities without NIL collectives may fall behind as NIL money increasingly motivates athletes’ recruitment decisions.

How Do NIL Collectives Operate?

As independent, third-party organizations, NIL collectives operate outside the university system. However, it would be naive to assume that universities aren’t communicating with NIL collectives about important issues.

Once NIL collectives are up and running, they pool money together from boosters. Some NIL collectives employ a subscription-based payment system, while others simply accept one-time donations as they come in.

NILs collectives can then use these funds to pay student-athletes for their NIL. Since some NIL collectives manage money in the tens of millions, these NIL agreement payouts can be incredibly lucrative for college athletes.

5 Examples of Leading NIL Collectives

While NIL collectives have only been operating for less than two years, many have already proven to be quite successful.

Some noteworthy NIL collectives include:

• Spyre Sports Group – Tennessee-based Spyre Sports Group boasts some of the largest figures in the business. Its co-founder and president, Hunter Baddour, claimed that the collective is on track to generate $25 million a year.⁵ This money will be allocated amongst participating student-athletes, giving top-tier talent that much more of a reason to consider committing to Tennessee.
• John Ruiz – Fueled by a motivation to see the Miami Hurricanes win big, John Ruiz invested $10 million in NIL money, creating an NIL collective of his own in a sense.⁶ He’s facilitated brand deals for over 110 Miami athletes through his companies, LifeWallet and Cigarette Racing. Nijel Pack is just one example—he secured an $800,000 two-year deal with LifeWallet after transferring to Miami from Kansas State.⁷
• The Fund – The Fund is an NIL collective that serves Texas A&M University student-athletes. It formed before the NIL ruling, and today, it’s still as elusive, as the Fund’s founder remains anonymous. Unlike other big-name collectives, The Fund doesn’t advertise its lofty aims, but it’s suspected to have generated tens of millions for Texas A&M athletes.⁸
• Division Street – Oregon Ducks Division Street NIL collective was created by Phil Knight, co-founder of Nike. Rosemary St. Clair, former VP/GM of Nike Woman, and Rudy Chapa, former VP of Nike’s sports marketing, also hold prestigious positions within the collective.⁹ Thanks to its business-savvy leadership, Division Street is setting the bar high for the quality of collectives across the United States.
• Gator Collective – Former Florida Men’s basketball star, Eddie Rojas, is the CEO of Gator Collective.¹⁰ This collective is the very first to sponsor its affiliated university’s athletic department. Due to its success, its students have been able to enjoy incredible financial opportunities. Many are even taking care of their families back home. For example, Trey Dean, Florida Gators football player, purchased his mom a car with his NIL money.

Benefits of NIL Collective Representation

If you’re a high school or college-bound athlete, you may be wondering what the advantages are of working with an NIL collective.

As the examples above display, one of the most notable benefits is having the potential opportunity to earn a generous income from your college sports career. You just need to make sure that the NIL collectives you’re considering have the funds to back up their offers.

Depending on the NIL collective you work with, you may also receive support in navigating the logistics of your NIL activity and monetizing your personal brand.

Controversies and Compliance Challenges Surrounding NIL Collectives

NIL collectives boast many benefits, but they aren’t without their controversies. While the NIL activity and deals must adhere to state law, NCAA rules and guidelines, and university regulations, skeptics of NIL collectives suggest that some aren’t complying as closely as they should.

For example, the NCAA rule explicitly bans NIL collectives or universities from paying students to commit to their schools. However, this practice is inevitably taking place in roundabout ways, and NIL collectives are often enabling these types of unspoken deals.

For instance, John Ruiz allegedly offered Jaden Rashada a $9.5 million NIL contract before the quarterback committed to Miami.¹¹ Although the sports star maintains that he made his college decision because Miami was the best fit, situations like these show how NIL collectives can muddy the recruiting process, even if universities aren’t technically involved. It’s clear to many in the college sports world that the money from NIL collectives inevitably alters the incentive structures for college-bound recruits.

The Future of NIL Collectives

During their brief time in existence, NIL collectives have taken the college sports industry by storm. In many states, their success has surpassed legislators’ ability to set clear guidelines.

Thus, the future of NIL collectives likely holds new rules and regulations, whether these come from:

• The NCAA
• Universities
• States
• The federal government

As new regulations arise, NIL collectives will have to adjust quickly to stay in compliance.

Despite the uncertainty regarding regulations, NIL collectives currently look like they’re here to stay. They’ve already entrenched themselves in the college sports sphere and have opened many financial doors for student-athletes. As a result, it seems that many universities will continue backing NIL collectives, despite the controversies.

Monetize Your NIL With Ease As a Curastory Video Content Creator

For better or for worse, NIL collectives have made a substantial impact on college sports. If you’re a high school or college athlete, understanding the implications of NIL collectives can help you make savvy decisions as you plan out your future.

In addition to working with an NIL collective, you can also earn money from your NIL independently by creating online content with Curastory. At Curastory, we’re committed to helping content creators produce, edit, and distribute their videos. We also match creators with their ideal brand partners so that they can monetize their content with minimal effort.

If you want to simplify your NIL monetization process, reach out to Curastory today to learn more.

Sources:

1. Sports Illustrated. Year 1 of NIL Brought Curveballs, Collectives and Chaos. Now What? https://www.si.com/college/2022/07/12/nil-name-image-likeness-collectives-one-year
2. Action Network. Highest Paid College Athletes in the NIL Era. https://www.actionnetwork.com/ncaaf/highest-paid-college-athletes-in-the-nil-era
3. On3. NIL Collectives. https://www.on3.com/nil/collectives/
4. On3. The On3 guide to NIL collectives around the nation. https://www.on3.com/nil/news/on3-guide-to-nil-collectives-around-the-nation/
5. On3. Spyre Sports Group – Tennessee Volunteers Collective. https://www.on3.com/nil/collectives/spyre-sports-group-2/
6. On3. EXCLUSIVE: A year into his $10 million investment in NIL, LifeWallet CEO John Ruiz is blown away by the return and plans to increase the budget in Year 2. https://www.on3.com/teams/miami-hurricanes/news/exclusive-a-year-into-his-10-million-commitment-to-nil-lifewallet-ceo-john-ruiz-is-blown-away-by-the-return-and-plans-to-increase-his-year-2-budget/
7. CBS. Nijel Pack transfers to Miami: Former Kansas State star to earn $800,000 in NIL deal with LifeWallet. https://www.cbssports.com/college-basketball/news/nijel-pack-transfers-to-miami-former-kansas-state-star-to-earn-800000-in-nil-deal-with-lifewallet/
8. On3. The Fund – Texas A&M Aggies Collective. https://www.on3.com/nil/collectives/the-fund-18/
9. On3. Division Street – Oregon Ducks Collective. https://www.on3.com/nil/collectives/division-street-4/
10. On3. Gator Collective – Florida Gators Collective. https://www.on3.com/nil/collectives/gator-collective-1/
11. Bleach Report. Jaden Rashada Reportedly Agreed to $9.5M NIL Contract With Miami Booster John Ruiz. https://bleacherreport.com/articles/10040029-jaden-rashada-reportedly-agreed-to-95m-nil-contract-with-miami-booster-john-ruiz
12. On3. Trey Dean. https://www.on3.com/db/trey-dean-115982/