Are NIL collectives a problem or part of a solution?

When the NCAA lifted its longtime ban on college athletes earning endorsement money in 2021, there was no such thing as collectives.

Now the booster-funded organizations have become ubiquitous, and a common way for athletes to cash in as name, image and likeness compensation quickly evolved into a stand-in for salary — much to the chagrin of many in college sports.

With revenue-sharing with college athletes on the horizon as part of a $2.8 billion antitrust settlement proposal agreed to Thursday by the NCAA and the nation’s biggest conferences, the future of collectives seems uncertain even though the duties they perform are about to become more important.

“One of the key functions of a collective is properly managing payroll for a sport. And that skill set that’s been developed is now going to be required for every single (power conference) school,” said Blake Lawrence, whose company Opendorse works with dozens of schools and more than 40 collectives on NIL activities.

“Will schools hire key members of their collective, the ones responsible for managing and moving money, negotiating with parents and players, and move that internally?” he added. “Or would schools hire the collective as their NIL agency, and shift some of their risk away from the school into the third-party to manage the distribution of those NIL payments?”

The revenue-sharing model proposed in the settlement — which still needs approval from a federal judge — and agreed to by the NCAA, Big Ten, Big 12, Pac-12, Atlantic Coast and Southeastern conferences would allow schools to direct up to 22% of the average power league school’s annual revenue to athletes. That comes out to about about $21 million per year, and would rise as revenues rise over the 10-year agreement.

In a letter to Division I members obtained by The Associated Press on Friday, NCAA President Charlie Baker estimated $1 billion to $1.5 billion in revenue would go to athletes annually in the proposed model.

The 22% cap has already drawn scrutiny from those who have been advocating for athlete rights. In major professional sports leagues, the split between players and teams is around 50-50.

“Our expert said in a world without (NCAA) rules, the athletes would get 10% of broadcast revenues. We’re settling for 22%, so we’re settling double NIL value. And one could say that component is pay-for-play,” said Steve Berman, one of the lead attorneys for the plaintiffs in House v. the NCAA, the case at the center of the settlement.

Berman said if scholarships and other current benefits to athletes are included on top of the new shared revenue, schools would be spending about 45% of athletic revenue on their athletes.

Pay-for-play remains a touchy term for those in college sports, especially as it relates to NIL and collectives.

In lieu of a model that pays athletes their market value, NIL filled that void. NCAA rule changes intended to allow athletes to cash in on their fame by promoting and sponsoring companies and brands led to high-profile athletes making hundreds of thousands of dollars through deals with collectives for some personal appearances and community service.


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