When the NCAA’s Board of Directors adopted an interim rule allowing athletes to pursue NIL opportunities beginning July 1, 2021, student-athletes were finally able to receive financial compensation for partnering with brands.
In the following months, a number of non-agency talent collectives have cropped up at universities around the country. Some examples include Gator Collective at UF and Classic City Collective at UGA. Notre Dame is among the latest schools to get their own collective, with the launch of Irish United in light of the start of the college basketball season. You may have heard about these NIL collectives, but if you’re like most people, you’re probably left wondering exactly what they are and how they operate.
The purpose of these collectives is to support and protect the players as they seek out name, image, and likeness opportunities. In the simplest terms, a NIL collective is a program designed to facilitate athletes’ potential endorsement opportunities. The NIL collective is not exclusive to just college student-athletes; it is open to any athlete who falls under NCAA bylaws. Each school can have its own NIL collective or there may be several within one conference.
Today, more than 120 known collectives have formed or are currently in the process of being formed. These are not numbers to sneeze at, as 92% of Power 5 schools now have at least one collective or are in the process of forming one (in case you were wondering, every school in the SEC has at least one organization.
Collectives are often founded by prominent former athletes and other alumni. University-specific collectives often pool money from boosters and other donors and use these resources to create and bring paid endorsement opportunities to student-athletes through a variety of activities.
While they may be school-specific, collectives are still independent of each university. In addition to pooling funds to help facilitate NIL deals, collectives also focus on education and resources that allow athletes to monetize their own brands and adopt better practices for their off-the-field endeavors.
The NCAA is cracking down on NIL collectives.
The major concern with collectives is the development of “pay-to-play” models when it comes to recruiting and the transfer portal. For example, a report from The Athletic in March detailed how a five-star recruit in the Class of 2023 signed with a school’s NIL collective that would pay him around $8 million by the end of his junior year. Many people believe this to be Tennesee five-star quarterback recruit Nico Iamaleava.
Over the course of the 2022 football season, multiple coaches have come forward and talked about players entering the transfer portal to pursue similar opportunities. In response, the NCAA released updated NIL guidance in early May, which stated that collectives are prohibited from being involved in the recruiting process—nevertheless, there continues to be concern over the role of NIL collectives. It doesn’t seem like the NCAA has slowed down many organizations either.
NIL collectives are more favorable than companies that typically take a cut of athletes’ NIL earnings because they don’t create a power imbalance
One of the main reasons for this is that NIL collectives are essentially owned by the athletes themselves (or their representatives). The collective then sells merchandise through its own website, rather than a third-party platform like Fanatics or Nike. By cutting out these middlemen, NIL collectives can keep up to 100 percent of profits from sales—creating a feedback loop that pays athletes and simultaneously allows them to create more opportunities.
Athletes need a way to make money off their likenesses, and some say NIL collectives are the best option right now.
NIL collectives allow players to steer their careers as they see fit, while also giving them access to lucrative sponsorships and merchandise deals that can be used to build their personal brands, gain experience with business dealings and negotiations, and make an impact in their communities.
NIL collectives have quickly risen to prominence and become an important part of the NIL landscape for college athletes—and they don’t appear to be going anywhere. As a security blanket for athletes first, they protect athletes from exploitation by big companies and also ensure athletes maintain control over their name and likeness in the wild west of NIL. As we’ve said before, the Icon Source platform is for everyone. Whether you’re an individual athlete or part of a NIL collective, our marketplace will be here as a resource for you to take advantage of and score meaningful endorsement opportunities. Learn more here.