Implications of Name, Image, and Likeness Collectives: Will Players Become Subjects of Endless Bidding Wars?

Introduction

It has been nearly two years since National Collegiate Athletic Association v. Alston, the landmark case where the Supreme Court unanimously ruled that the NCAA’s rules limiting education-related benefits violated the Sherman Antitrust Act,¹[1]Nat’l Collegiate Athletic Ass’n v. Alston, 141 U.S. 2141 (2021). a federal statute which prohibits activities that restrict competition in the marketplace.²[2]Sherman Antitrust Act, 15 U.S.C. §§ 1-38 (2022). Following this decision, the NCAA changed their longstanding policies and implemented the Interim Name, Image, and Likeness (“NIL”) policy which allows student-athletes to benefit from their NIL “without jeopardizing their NCAA eligibility.”³[3]National Collegiate Athletic Association, Institutional Involvement in a Student-Athlete’s Name, Image and Likeness Activities (2022), https://ncaaorg.s3.amazonaws.com/ncaa/NIL/D1NIL_InstitutionalInvolvementNILActivities.pdf. This new policy has dramatically changed NCAA recruitment and the introduction of “NIL collectives” presents many potential issues to the NCAA, including the new way schools are trying to “buy” a player’s commitment.⁴[4]Ross Dellenger, Big Money Donors Have Stepped Out of the Shadows to Create ‘Chaotic’ NIL Market, SPORTS ILLUSTRATED (May 2, 2022), https://www.si.com/college/2022/05/02/nil-name-image-likeness-experts-divided-over-boosters-laws-recruiting.

What are NIL Collectives?

NIL collectives are corporate entities unofficially affiliated with a university that promote college athletics and/or assist in providing benefits to student-athletes and their families.⁵[5]National Collegiate Athletic Association, Interim Name, Image and Likeness Policy Guidance Regarding Third Party Involvement (2021), https://ncaaorg.s3.amazonaws.com/ncaa/NIL/May2022NIL_Guidance.pdf. Collectives are usually founded by “prominent alumni and influential supporters” who pool funds from businesses and boosters and help facilitate NIL deals for athletes.⁶[6]Pete Nakos, What are NIL Collectives and how do they operate?, ON3 (Jul. 6, 2022), https://www.on3.com/nil/news/what-are-nil-collectives-and-how-do-they-operate/. The collectives provide more opportunities for student-athletes to monetize their NIL.⁷[7]Id.

According to the NCAA Interim NIL Policy Guidance Regarding Third Party Involvement, there are rules regarding NIL entities and the recruitment process. NIL entities cannot communicate, organize meetings, or guarantee an NIL agreement with a prospective student-athlete.⁸[8]National Collegiate Athletic Association, Interim Name, Image and Likeness Policy Guidance Regarding Third Party Involvement (2021), https://ncaaorg.s3.amazonaws.com/ncaa/NIL/May2022NIL_Guidance.pdf. They are only supposed to work with the student-athletes already in their program.⁹[9]Id. However, the collectives have found ways to be involved in the recruitment process.

Recruitment and the Transfer Portal

The NCAA recruitment process is conducted at two possible times during a student-athlete’s career: when an athlete is in high school,¹⁰[10]National Collegiate Athletic Association, Recruiting – Eligibility Center (2014), https://www.ncaa.org/sports/2014/10/8/recruiting.aspx. and when a current NCAA student-athlete chooses to switch schools and enter the transfer portal.¹¹[11]National Collegiate Athletic Association, Want to Transfer? (2015), https://www.ncaa.org/sports/2015/2/13/want-to-transfer.aspx. NIL collectives have impacted high school recruitment, a prominent example being football prospect Jaden Rashada.¹²[12]Leonard Armato, NIL Collectives And Jaden Rashada Show NCAA Rules Are In Shambles, FORBES (Jan. 24, 2023), https://www.forbes.com/sites/leonardarmato/2023/01/24/nil-collectives-and-jaden-rashada-the-ultimate-snub-of-ncaa-rules/?sh=7d272b6128eb. It was reported that the University of Florida’s NIL “Gator Collective” promised Rashada $13 million to join their program.¹³[13]Id. After Rashada signed the National Letter of Intent, the alleged deal fell through, prompting Rashada to request to be released from his binding National Letter of Intent and look elsewhere.¹⁴[14]Id.

If a student-athlete wants to transfer to a different institution, they enter the NCAA transfer portal.¹⁵[15]Michelle Brutlag Hosick, What To Know About Division I Transfers, NCAA (Aug. 20, 2019), https://www.ncaa.org/news/2019/8/20/what-to-know-about-division-i-transfers.aspx. The transfer portal has become an important part of the recruitment process.¹⁶[16]Id. The launch of the transfer portal in 2018 gave student athletes the ability to “publicly declare their intent to transfer” and their desire to meet with other schools.¹⁷[17]Id. From August 2021 to July 2022, 2,918 Division I FBS football student-athletes entered the transfer portal.¹⁸[18]Transfer Portal Data: Division I Student-Athlete Transfer Trends, NCAA (Jan. 2023), https://www.ncaa.org/sports/2022/4/25/transfer-portal-data-division-i-student-athlete-transfer-trends.aspx. The transfer portal, in this new era of NIL, is a forum where schools and their collectives can use the allure of potential NIL compensation opportunities to recruit student-athletes.¹⁹[19]Russell Steinberg, The Transfer Portal, NIL, and College Sports ‘Free Agency’ Explained, Boardroom (Oct. 25, 2022), https://boardroom.tv/ncaa-transfer-portal-nil/. For example, for both high school and transfer recruits, the University of Southern California (“USC”) and their unaffiliated collectives can reference the large media market in Los Angeles.²⁰[20]Pete Nakos, How transfer players can take advantage of NIL opportunities, ON3 (Jul. 8, 2022), https://www.on3.com/nil/news/how-transfer-players-can-take-advantage-of-nil-opportunities/. USC’s famous and wealthy alumni funnel financial donations to dazzle potential recruits.²¹[21]Id.

Two former University of Oklahoma (“OU”) football players are prime examples of the benefits of the transfer portal.²²[22]Oliver Hodgkinson, Top 10 NIL Deals in 2022: Ohio State and Alabama Players at the Forefront of CFB’s Financial Revolution, PRO FOOTBALL NETWORK (Aug. 15, 2022), https://www.profootballnetwork.com/top-10-nil-deals-in-2022/. Spencer Rattler, after being beaten out of the quarterback position at OU by Caleb Williams, entered the transfer portal and signed with the University of South Carolina.²³[23]Madison Williams, Spencer Rattler Says Time at Oklahoma Was a ‘Toxic Situation’, SPORTS ILLUSTRATED (Apr. 15, 2022), https://www.si.com/college/2022/04/15/spencer-rattler-oklahoma-toxic-situation-transfer-south-carolina-shane-beamer#:~:text=He%20wanted%20to%20see%20where,really%20wanted%2C%E2%80%9D%20Rattler%20said. Since becoming the starting quarterback at South Carolina, Rattler has entered NIL agreements with brands such as Blackwood for Men and Jim Hudson Chevrolet.²⁴[24]Oliver Hodgkinson, Top 10 NIL Deals in 2022: Ohio State and Alabama Players at the Forefront of CFB’s Financial Revolution, PRO FOOTBALL NETWORK (Aug. 15, 2022), https://www.profootballnetwork.com/top-10-nil-deals-in-2022/. These deals were engineered by South Carolina’s NIL collective, Garnet Trust, and Rattler “currently has an estimated NIL value of $2 million.”²⁵[25]Id. Even though he won the starting quarterback role at OU, Williams also entered the transfer portal following the 2021 season, and reportedly received an offer of $1 million from one school before ending up at USC.²⁶[26]Id. At USC, Williams has struck deals with companies like Beats by Dre, Hawkins Way Capital, and Fanatics, and is now “worth an estimated $2.4 million.”²⁷[27]Id. NIL has seemingly turned the transfer portal into an endless bidding war for players.

Implications

Rather than looking for the best fit, prominent student-athletes now seem to be deciding what school they will enroll in based on the potential NIL opportunities they will garner while playing there. NIL Collectives, on behalf of their respective universities, are engaging in bidding wars that can reach millions of dollars. This is revolutionizing the recruitment process and can potentially change college sports altogether.

Written by: Riley Malone
Haley is a 2025 J.D. Candidate at Brooklyn Law School