As we are deep in the midst of college and NFL football, the Kavea team wanted to further investigate a tangential topic to employee compensation, albeit with a different spin while breaking the blandness of general Human Resources discussion.
Recent news has circulated about top incoming college recruits, most notably the rumored University of Michigan offer to Brice Underwood over $10 million to forego his commitment to LSU and don the Blue and Maze at UM. For clarity’s sake, Underwood is immensely talented but has not played one down of college football and stands to make more than THREE times the salary (per year) of Brock Purdy, who led the San Francisco 49ers to the Super Bowl as a second-year quarterback.
This tremendous shift in the leverage towards players at a less superior level is bound to have ripple effects that may not be truly quantifiable. This is merely one example others are Arch Manning and Quinn Ewers (University of Texas, $3.1million and $2.2 million, respectively), Travis Hunter and Shedur Sanders (Colorado, $3.3m and $5.8 million, respectively), Jalen Milroe (Alabama, $2.5million) amongst others.
With these examples looming large, the Name, Image, and Likeness (NIL) rule change, which has allowed college athletes to earn money through endorsements and personal branding, has sent shockwaves through college athletics. This article dives into the impacts of NIL on college football and the evolving dynamics it has set into motion within NFL compensation and contracts.
The NIL Impact on College Football: Recruiting, Competition, and Player Development
Since the NIL policy went into effect, college athletes have benefited from endorsement deals, social media influence, and other monetization opportunities. Here are the primary impacts of NIL on college football:
- Recruiting Power Shift: NIL has transformed college recruiting. Historically, top programs were able to attract elite players due to their storied reputations and athletic success. Now, schools located in markets where athletes have greater opportunities to earn from NIL deals are gaining a competitive advantage. Universities in large metropolitan areas or with strong alumni networks in media and entertainment fields may have an edge, allowing these schools to compete more effectively with traditional powerhouses. At Oregon, the Ducks are a championship contender due to Dillon Gabriel (former University of Oklahoma quarterback) and his number 11 ranked NIL deal. Oregon has been backed by one of the most famous alumni in college sports, the founder of Nike, Phil Knight.
- Extended College Careers: Players now have a financial incentive to stay in college longer, particularly if they don’t project as early NFL draft picks (see Brock Purdy example). Previously, many college athletes were financially motivated to leave college for the NFL as soon as they become eligible, notably the pre-NIL ligitated case between Maurice Clarett (former Ohio State running back). Now, those who can earn substantial NIL income will likely feel less pressure and urgency to declare for the draft yet take the alternative to continue their development in college while earning compensation.
- Enhanced Player Development: With NIL providing a new source of income, top players can invest in their personal and professional development. This can include hiring personal trainers, nutritionists, and other professionals to help them succeed both on and off the field which are generally unattainable by the average college student to gain the competitive edge. By enhancing these areas, players may be better prepared for the NFL, leading to higher quality athletes entering the league and reducing some of the risk of underdeveloped talent entering the draft early for financial reasons.
The Impact of NIL on NFL Compensation Contracts
The changes in college football under NIL are trickling down to the NFL in several ways, particularly in the realm of player contracts and compensation.
- Valuation Shifts for Rookies: As top college athletes come into the NFL with brand deals and established followings, they bring a built-in marketability that NFL teams now take into account. Players who enter the league as recognizable figures with large social media followings may command higher initial contracts and sponsorships. This means that NFL teams are adjusting their valuations for rookies, especially those from high-visibility college programs.
- Increased Leverage for Contract Negotiations: The brand-building opportunities that NIL provides allow players to negotiate with NFL teams from a stronger position. For example, if a high-profile rookie can command major sponsorships independently of team agreements, they might prioritize the fit with a team over the first contract’s dollar amount. This dynamic can shape contract negotiations, and agents may begin to leverage players’ NIL-established brands for better terms, bonuses, or performance incentives.
- Changing Role of Endorsements and Sponsorships: Historically, NFL players could expect to see an increase in sponsorship opportunities only after proving themselves on the field. However, with some players entering the league with existing NIL deals, the NFL’s relationship with sponsors and advertisers is shifting. Top rookies may come with a sponsor portfolio, which could impact team deals or even create competitive dynamics between individual player endorsements and team sponsorships. This introduces new complexities in contract negotiations, as players may need to balance NFL sponsorship opportunities with pre-existing NIL partnerships.
- Impact on Salary Cap Dynamics: NIL also has the potential to shift how the NFL and its teams view salary cap dynamics. With many rookies entering the league having already earned significant money, teams may find players willing to accept certain types of contract structures, such as lower base salaries with performance incentives or bonuses tied to commercial metrics. While these changes might start subtly, the ongoing influence of NIL could shape future NFL salary cap strategies, particularly as teams look to maximize resources across star players.
Potential Long-Term Implications for NFL Contracts and Player Marketability
The effects of NIL on the NFL are still evolving, but several potential long-term outcomes could reshape NFL contracts and team strategy:
- The Rise of “Pre-Market” Stars: With NIL, certain college players are emerging as stars before they set foot in the NFL. If players bring high marketability into the NFL, teams may start crafting contracts that take these factors into account from day one. Rookies could see contracts with unique clauses tied to their personal brand performance, media presence, or market reach, reflecting a convergence between NFL compensation and marketing.
- Increased Focus on Player Autonomy: NIL fosters autonomy, allowing players to cultivate their brand while still in college. This experience with personal branding may create a new generation of NFL athletes who are more conscious of maintaining control over their image and financial opportunities. As they enter the NFL, these players may prioritize teams and contracts that support their brand objectives or offer better flexibility in managing endorsement deals, leading to a potential shift in the team-player power balance.
- Market Saturation and Sponsor Allocation: With college athletes already absorbing a share of available endorsement dollars, there may be reduced endorsement revenue potential for younger NFL players. Companies that historically focused on rookie NFL players may divert funds to college athletes, especially in football-focused regions or media markets. This could create a more competitive landscape for endorsement deals within the NFL and potentially increase the value of NFL contracts to compensate for this shift.
The NIL era in college football is transforming not just the NCAA landscape but also creating new dynamics in the NFL, particularly around compensation and player contracts. By empowering college athletes with the ability to earn and establish themselves as brands, NIL has created a new class of highly marketable rookies entering the NFL. The result is a league adapting to these changes through shifts in rookie contract valuations, endorsement strategies, and negotiations around branding control. As NIL continues to evolve, its ripple effects will likely deepen, reshaping both college and professional football in ways we are only beginning to understand. The impacts of NIL underscore the importance of adaptability for both players and teams in a rapidly changing sports industry.
