This story appeared in the Opendorse report "N1L: One year of Name, Image and Likeness"
WHAT WE CAN EXPECT IN THE SECOND YEAR OF NIL In the fall of 2021, fans eagerly made their return to college campuses around the country. Stadiums and arenas were full once again with rowdy student sections, alumni and fans alike. Except that season, game days wouldn’t be the only time you could see your favorite athletes. Maybe you noticed Olivia Dunne promoting activewear on Instagram. Or you saw Iowa Men’s basketball’s Jordan Bohannon while buying fireworks. Maybe you ran into the Virginia Tech offensive line while eating at a local barbecue joint. It was the first taste of NIL for most people. It was new, unknown, and a little intimidating. But headed into the 2022 fall sports season, like any sophomore with a year under their belt and ready to earn a starting job, NIL is no longer a new concept. Stakeholders in the game need to read the scouting report of what could be coming. YEAR 2 — TIME TO ACTIVATE It would be naïve to navigate the NIL waters in 2022 the same way as 2021. The first year of NIL was a time of trial and error, learning, teaching, supporting student-athletes, and for some, sitting back and observing the market. Now it’s time to activate – for all parties involved. Education and awareness of NIL has been fast-tracked in the last year. From student-athletes and schools, to brands, sponsors and donors, the value of the student-athlete voice has been recognized. And the earning potential has been realized. The market can directly impact the success of NIL initiatives in their community. So, where is the money coming from? Opendorse CEO and co- founder Blake Lawrence breaks it down. Participants in NIL should double on both the buyer and student- athlete side in year two. Brands and sponsors see the value, and student-athletes are recognizing their earning potential. Read the entire thread GO BACK TO CONTENTS / 39
N1L THE FUTURE THE ATHLETE — PUTTING IN THE WORK NIL is most impactful for athletes that put in the work. Education was a heavy focus in year one for the purpose of providing athletes with the tools needed to be successful. Now that they have those, it’s time to put in the effort. From the Power 5 All-American to the NAIA walk-on, student- athletes are proving the theory that if you engage in the process, it doesn’t matter what sport you play or school you attend. That national exposure is nice, but deals don’t depend on that. In year one, there were examples of different ways and methods student-athletes could make money. Year two is about looking at what worked, what generated real value and applying it to life. The first movers in year one of NIL set the foundation and laid the groundwork that allows student-athletes, in year two, to navigate the way they want to. Year two will be about finding deals that fit them as athletes, students and people. Year two brings more opportunity for athletes to bring out their entrepreneurial side. With the rise of player-led collectives, student-athletes want to show initiative in promoting and preserving their NIL involvement. FAN INVOLVEMENT — A PERSONALIZED EXPERIENCE Athletic departments spent much of year one educating their athletes. Athlete education will continue to grow, shifting from “here is how you could make money,” to “here is how you can make the most money,” and “here is how you will make money.” From the market side, it’s about providing the biggest supporters, businesses, and individuals in each market with the rules they need to know and the tools they need to use to support the student-athletes in a compliant way. And fans are a major part of that. Fans have always wanted to support student-athletes. That’s why they show up on game day, greet the team at the airport, attend camps, and follow athletes on social media. And as it pertains to NIL, that’s no different. They just need a place to go. Opendorse’s vision is to give every fan a place to go to support any athlete they want. In year two of NIL, it will become clear that there is a place to go to start supporting student-athletes. Opendorse plans to roll out more than 75 school-specific marketplaces where fans can go to easily support student-athletes. How fans want to support student-athletes will continue to evolve. It’s easy to see a world where 10% of all fans in attendance at football games this fall are supporting student-athletes directly in some way. Through collectives, video shoutouts or buying merchandise, new methods of supporting athletes are popping up every week. BRANDS AND SPONSORS — A NEW APPROACH A BRAND NEW GAME Year one of NIL was the “year of the firsts” for brands. The headline was enough of a return on investment to make most brands happy. There will always be more firsts, but expect brands to shift the focus to results in year two. Nationwide campaigns are going to be more prevalent in 2022 because of the effectiveness of student-athletes as ambassadors. There was no data that could be shared with those brands prior to NIL. Now proven effective, the time and spend in the student- athlete market will increase. The sponsor segment, which is largely controlled by multimedia rights holders like LEARFIELD, will be twice as active in year two. The typical sales season for sponsorship is in the spring. When NIL went into effect on July 1, 2021, sponsorship sales teams didn’t spend the prior spring preparing for NIL. With a full year of NIL being a reality, sales teams have a full sales season to sell into the market. ALL EYES ON THEM Similar to sponsors, national advertisers doing one-off, long- term deals with premium athletes will be more prevalent this fall. Clemson quarterback DJ Uiagalelei did a deal with Dr. Pepper, making him one of the first student-athletes to appear in a national brand advertising campaign. Maryland quarterback Taulia Tagovailoa and his brother, Miami Dolphins quarterback Tua Tagovailoa, have partnered with Muscle Milk in a national ad campaign. Shortly after winning a national championship with South Carolina, Aliyah Boston signed with Under Armour and this summer hosted a camp in her hometown of St. Thomas, Virgin Islands. With more of a runway to plan these activations out, expect more student-athletes featured in national campaigns. Temple football alumnus Linwood Crump was one of the many student-athletes to sign their first NIL deal with Gopuff. 40 / GO BACK TO CONTENTS
N1L THE FUTURE The bottom line is brands and sponsors need to know that student-athletes who want to do NIL will produce a quality return. Whether it’s creating content or making an appearance, those athletes that have done their homework and put in the effort will produce high quality outcomes and likely at a much more cost-effective rate than any national advertiser ever used to pay anyone in the sports world. THE DONOR IMPACT — STAYING COMPLIANT The biggest story to come out of the second half of year one of NIL is the emergence of NIL Collectives and the donor impact on NIL. The largest source of revenue in an athletic department is donations. And one year ago, donors had no idea they would even be able to play a role in NIL. In year two, if you’re a donor to an athletic department and you still don’t know how to support student-athletes then you haven’t been paying attention. Through collectives, donors that leverage their passion and long-time support of programs to compensate athletes at their school is what will make – and keep – programs successful. If there is one in your market, which there probably is, the number one source of NIL compensation will come from collectives in year two. Current college athletes — and especially recruits — will learn that if there’s an educated collective in the market that’s providing consistent and compliant NIL activities to student-athletes then that is where they want to be. After staying mum on NIL for nearly a year, the NCAA has rung the bell on what NIL is and what it is not. While nothing has crashed and burned yet, the NCAA has made it clear there is a desire to learn about the NIL activities in certain markets and investigations into NIL activities to ensure compliance with the interim policy is likely coming. SCHOOLS — WINNING THE MARKET So what does this mean for schools? Every school will have a variation of a marketplace by year end to provide a framework to easily engage each market. With this, schools must further educate their market (fan base) through resources and opportunities to connect athletes and supporters and keep their athletic programs competitive. In addition, schools need to have a software solution that documents eveything to ensure compliance. Schools that have a log of every NIL activity that their student- athletes have participated in will rest easy. A log that includes the compensated party, contact info, terms of agreement and proof that the activities required of the athlete were completed for compensation. Issues arise when schools fail to gather the relevant information that would help them prove that compensation is for work performed and not in contention on enrollment or performance. Expect more schools to come under scrutiny to provide proof that they are making an effort to follow the NIL interim policy. Finally, educating the student-athlete will remain a crucial piece to NIL. Just as sport is used as a vehicle to receive an education for a future career, it’s also used to build life skills as these young adults prepare to enter the real world. As NIL becomes more of a centerpiece in athletic departments, expect schools to invest in more resources to ensure student-athletes are well-equipped to be successful. HERE TO STAY In short, there is no stopping the growth of NIL and if you’re not on board now you will get left behind. For student-athletes, everyone needs to help - from education and compliance to financial literacy and deal support. For schools, you can’t lag behind. Getting a solution in place like Opendorse only protects you and helps maximize NIL opportunities for your student-athletes. For donors, collectives, sponsors and fans, there are hundreds of thousands of athletes ready to engage with you and start their path to financial freedom.