College student-athletes can now profit off of their name, image, and likeness (NIL) on an interim basis as of July 1, and data indicates that student-athletes are taking afvantage of the new rules.
“These aren't your granddaddy's endorsements,” Blake Lawrence, CEO of Opendorse, a technology company that connects athletes to prospective business opportunities, said on Yahoo Finance Live (video above). “This is an entirely new world of athlete endorsements. Social media is the leading factor in student athletes earning compensation from brands or fans.”
Nearly 90% of all deals centered around social media promotion. The deals ranged from social media posts promoting a product to Clemson’s starting quarterback D.J. Uiagalelei appearing in a Dr. Pepper video advertisement.
“Brands and fans are eager and willing to pay student athletes at a clip much higher than we expected,” Lawrence said.
More than $1.5 billion in potential earnings
Division I players have been earning $471 on average, according to Opendorse data, while some of these NCAA athletes earned more money just in the month of July than their yearly tuition.
Opendorse is projecting that the new policy could lead to more than a total of $1.5 billion in earnings for NCAA athletes in 2021 alone.
“A lot of these dollars are being pushed around the different sports,” Lawrence said. “The national advertisers are spending across the entire spectrum of sports. But you're seeing a lot of local businesses getting creative and supporting their favorite football players, getting excited around the football season … There will be more spending across other sports as those sports go live.”
Star football players with national recognition like Uiagalelei are still likely to profit the most from their name image and likeness. Football players owned 79% of the NIL market share in July followed by men’s basketball (9.6%) and women’s volleyball (5.5%).
Social media was the leading driver of player revenue, helping bring in 46% of all NCAA athlete compensation so far, while licensing — a player signing away their likeness to an apparel or trading card brand — brought in 29% of revenue. Those categories, which Lawrence described as “passive” endorsement deals, combined for 75% of athlete earnings in July.
“Those that are worried that student athletes will be distracted with NIL actually should be surprised or excited to know that athletes are monetizing with a few clicks or a signature,” Lawrence said.
Many state and team-specific NIL rules still prohibit players from participating in NIL-related activities while playing in games or wearing their school’s branding. Even so, Lawrence said companies will still be gaining the exposure they’re paying for in other ways.
“Once you visit your social media feed and see a student-athlete hawking a local product or local business, go and support that local product or business,” Lawrence said. “Because that's directly supporting those student athletes that show up in your feed and show up on Saturday on the football field.”
Josh Schafer is a producer for Yahoo Finance.