A better future for NIL: Open, Public, Transparent

3/5/2024


College sports is in disarray.

…and broken approaches to Name, Image, Likeness (NIL) are the culprit.

NIL—when leveraged correctly—makes college sports better, not hurts it. Why? College sport’s true pageantry lies in its unique ‘free agency’ model.

Unlike any other sports leagues in the world, athletes ultimately decide where they want to go to school. No drafts, no trades. Pure pageantry.

NIL has the opportunity to amplifies this pageantry and establish an equitable collegiate free agency where:

  • Athletes deserve to openly assess their NIL value on a per-school basis
  • Fans—a team’s true lifeblood—deserve to have a real part in assembling their team’s future

There’s only one problem: the role NIL play’s in today’s status quo is broken. It’s finally time to do something about it.

Enter: the Public NIL initiative.

Stepping Back: Today’s State of NIL

Before March 1, 2024

On July 1, 2021, the National Collegiate Athletic Association (NCAA) officially passed its first Interim NIL (name, image, and likeness) Policy, featuring:

Individuals can engage in NIL activities that are consistent with the law of the state where the school is located. Colleges and universities may be a resource for state law questions.

What these guidelines were originally intended to be — a way for athletes to make a few bucks from, say, a sponsorship with a local restaurant — only took two months to unravel from endorsements to inducements.

Compensation for college athletes through brand endorsements and custom merch became pennies compared to the real money: NIL Contracts from ‘Private Collectives.’

It only took a few months and some smart donors to figure out some key NIL bylaw loopholes—enabling big-pocket donors to pool their money, and use this pool as financial leverage to pledge money to top recruits to entice them to come to their school.

This entity founded on the grounds of this legal loophole was called a ‘Collective’ (we call them ‘Private Collectives’). While the NCAA later updated their guidelines to try to reel this behavior in, the genie was already out of the bottle:

  • $8 million NIL deal inked with a 17-year-old QB for Tennessee (source)
  • Texas’s backup QB allegedly made more via NIL last year than Brock Purdy, the starting Super Bowl QB (source)

What began as a legal way for athletes to endorse their local restaurant turned into six-figure contracts from private collectives to entice the best players to their school. And the same regulatory gray area that made private collectives ‘legal’ reflects the gray area in which they operate:

  • Not Inclusive: Private collectives restrict membership to specific athletes in select sports (top 1%)
  • Not Transparent: Private collectives aren’t transparent about how and where donor money goes
  • Not Fan-Friendly: Private collectives control allocations and only let donors donate to ‘the general fund’

Even though the rules technically didn’t allow private collectives to use NIL as a recruiting tool… think that stopped them? It’s no secret that NIL drives recruitment decisions, and that’s where these shady private collective practices give them the upper hand:

  • Behind-closed-doors conversations that ‘technically never happened’
  • Under-the-table contract values that are predatory and non-negotiable
  • Controlling terms via short-term contracts, payback clauses, and forced exclusive NIL rights ownership

This behavior spread like wildfire across college sports—until March 1, 2024.

On March 1, 2024

The Eastern District of Tennessee announced a preliminary injunction on February 23, 2024, that officially blocked the NCAA’s ability to enforce any of its NIL bylaw rules:

"...without the give and take of a free market, student-athletes simply have no knowledge of their true NIL value... this suppression of negotiating leverage... harms student-athletes."
- TENN v. NCAA, Preliminary Injunction (Feb. 23, 2024) - Full Doc Here

And one week later, on March 1, 2024, NCAA President Charlie Baker concurred with this court ruling:

"...NCAA staff to pause [enforcement of] third-party participation in NIL-related activities ... consistent with the injunction [regarding the NIL-recruitment ban]”
- Charlie Baker, Letter to NCAA member schools (Mar. 1, 2024)

What does this mean?

Prospects (both recruits and transfers) finally have the leverage to compliantly discuss, understand, negotiate their NIL value prior to committing to a school. The NIL-recruiting ban has officially been lifted.

This means that you—the athlete prospect—can now expect to discuss your NIL opportunities and value, without fear of penalization, prior to signing your NLI.

…only problem? Today’s status quo of private collectives is simply too broken to power this new, equitable future of NIL.

The system is broken, and college sports desperately needs a solution.

Enter: the Public NIL initiative.

Looking Forward: An Open Standard to Power NIL

These latest, positive changes around NIL only becomes a win for athletes if NIL is done right. We believe that today’s status quo—Private NIL Collectives—is not right.

Today's new rules require a thoughtful approach for tomorrow. This is why NIL needs a new, public system—with new priorities.

Public NIL is a open-source initiative establishing common-sense standards for the role Name, Image, Likeness (NIL) plays in the future of college sports.

Public NIL believes in:

  • Athlete-friendly deal terms
    • Today’s Private Collective NIL contracts are riddled with predatory terms—payback clauses for transferring, forced exclusive NIL rights representation, and termination rights without cause—built to protect donors, not athletes.
    • Athletes deserve to get paid to attend the school of their choice, without being victim to legal jargon.
  • Unbiased and unrestricted
    • Today’s system is in disarray with per-state rules that differ, and per-collective processes that suppress an athlete’s ability to understand or negotiate their NIL market value.
    • Without ubiquitous rules to govern the give and take of the free market, student-athletes simply have no knowledge of their true NIL value.
  • Open and transparent
    • Today’s Private Collectives infamously lure athletes through overpromising contract value—without willingness to put it in writing, place money in escrow, or show financial records to prove they can actually perform the payments they’re offering.
    • The flow of funds in NIL must be fully transparent, for athletes to both understand their value and trust that their value will actually be paid out.

Ultimately, none of this is groundbreaking.

But you’ll be shocked to know this is earth-shattering to today’s broken status-quo surrounding NIL.

Hence why Public NIL is a call to action for collectives, agencies, brands, institutions, and student athletes to adopt NIL standards that are transparent, athlete-friendly, and ubiquitous system-wide.

What Now & What Next

We believe in a future where NIL powers an equitable free agency for college sports. And we believe even stronger that this is only possible through common-sense principles similar to Public NIL.

While we’re excited for a future where collectives, agencies, brands, and institutions adopt the Public NIL Standards for themselves—in the meantime, here’s what you—the athlete—can do:

  • Understand your rights
    • The rules have changed, and its imperative that you know that YOU have the leverage to understand and negotiate your NIL market value prior to committing to a school.
  • Heighten your expectations
    • Shady NIL contract terms are simply not right. This manifesto is not legal advice, but rather we hope it opens your eyes to the expectations you should have toward the relationship between you, collectives (private or public), and your NIL.
  • Look for Public NIL (or similar) adopters
    • Public NIL is one of many initiatives seeking a better future for NIL’s role in college sports. Explore using products—like FanCave, the first online public collective—or services that adopt Public NIL’s athlete-friendly principles prior to accepting any deal.

Whether you’re an athlete, recruit, parent, coach, agent, institution, or otherwise—we’d love to help you in your NIL journey. Feel free to reach out to learn more, or share your experiences.

→ Contact the team behind Public NIL here