Student-athletes and companies all around the country are taking advantage of the still-new name, image, and likeness policy. Student-athletes can now receive financial compensation through endorsement deals, social media sponsorships, autographs, and so much more. From a marketers’ perspective, this has opened a new door for opportunity. Instead of finding a big-name professional athlete, NIL deals save brands money and make the connection with athletes before the big leagues. It was reported that US influencer marketing spending will reach $4.14 billion in 2022. The growth is primarily driven by social media, such as TikTok which has added advertisements to their platform, typically sponsored by influencers.
There’s obvious room for opportunity. But as an athlete, how can you capitalize on the opportunities to maximize your return? Read on to learn more.
Understanding the Contract
As a student-athlete, this may be one of the first contracts you’ve ever encountered. There are some things you should be aware of and prepared for. You’ll want to make sure you’re fully aware of the agreement before signing. Here are some things to consider before signing your first NIL contract.
Most states have adopted a bill that outlines guidelines institutions must follow in their NIL contact. Tennessee has its own bill, House Bill 1351, which constructs all of the NIL rules that in-state colleges and universities must follow. The University of Tennessee, Knoxville has a NIL information website that presents the guidelines. It’s important to understand which brands you can or can’t partner with before signing a deal.
Financial Aid Impact
NIL compensation is taxable income. If you’re an athlete on a scholarship, this is less of a concern. But student-athletes who receive need-based aid must be aware of the tipping point for NIL benefits to outweigh the costs of financial aid.
Brands sometimes include an “exclusive clause” that prevents you from working with their competitors for the duration of the contract. Know who these companies are before accidentally signing a NIL with a competitor, breaching the contract.
If this is your very first NIL deal, how do you know if you’re receiving the appropriate compensation? Through March 31, 2022, the average Division I athlete deal was $594.
While it’s important to know your market, you should also recognize the type of partnership, as some endorsements work more than others. Opendorse reported the total compensation by activity, 35% posted content, 17% signatures, 16% other, 13% licensing rights, and 10% created content.
Source of Endorsements
In basic terms, know the brand you’re working with. Circling back to the university regulations, some institutions prohibit athletes from working with certain brands (i.e. tobacco products, alcoholic beverages, gambling associations, etc.).
Another factor here is working with a brand that has a conflict with the university, such as signing with Under Armour but the university has an exclusive partnership with Nike.
Find NIL Opportunities
At Spyre Sports Group, we’re ready to create NIL opportunities for you. We have over 30 years of marketing experience along with having represented hundreds of professional athletes in various professional sports.