Muhammad Hashir | NILvana Sports
Since NIL was introduced in 2021, its rights have changed the face of college and even high school sports, granting athletes more than ever before to become creators of their personal brands and cash in. But behind the excitement of million-dollar deals and new money opportunities lies a more complicated truth: athletes face exploitation, lack of control, and rising ethical concerns about recruiting and fair competition.
Broken Promises
The most notable instance is the UNLV quarterback Matthew Sluka, who was one of the first recruits in the program. Mark Watch reports that he verbally agreed to a $100,000 NIL contract. It was never put on paper, and thus, Sluka only got paid $3,000. He eventually exited the program. This case indicates that oral agreements are risky without a handwritten or written document. Without a paper agreement, it is unsafe for sports stars to get a deal
NIL has created a boundary between adequate compensation of athletes and the wrong recruitment strategies. The situation where schools utilize third-party collectives to entice talent is also an ethical and legal issue.
The University of Wisconsin and its NIL collective filed a lawsuit against Miami after the latter tampered with a prospect by enticing him with NIL offers. This is just one example of why there is growing concern about whether NIL may become a recruiting vehicle and not a fair way for athletes to earn money.
The Business of Licensing and NIL Value
While individual deals dominate headlines, group licensing represents another major frontier. In 2023, Electronic Arts (EA) paid more than $40 million to over 29,000 current and former athletes for using their likeness in its college football video games. Athletes also got an average pay of around 1,200 dollars per person. The ones who were most identifiable were getting 7,200$, depending on appearances.
An executive of EA Sports, Joel Linzner, provides evidence that the game tends to bring in roughly 80 million/yr as a result of sales of 2 million units/yr. Using licensing models that take 10–15% of revenue, each student-athlete’s share in group licensing could be valued at about $1,000. In the absence of licensing limits, the per-player value would rise to $7,200, which is the upper cap of the settlement.
The collegiate-professional remunerative disparity is also sharp.
- NBA licensing (Nike deal): 1 billion dollars, eight years (consecutive): ~ 275,000 per player annually.
- The total spending on college apparel tops 10 apparel deals: $8 million per school/ year = $10,000 per student-athlete.
This information proves, that the yearly NIL value for a college athlete ranges from $1,000 to $10,000, while professional athletes can earn around $50,000 to $400,000 through group licensing deals.
Contracts, Frauds, and Exploitation
Another big risk comes from contracts that pressure athletes into signing without proper explanation. Some of them are mentioned below.
- Contracts that allow a brand to use an athlete’s image without limits, sometimes even for life.
- Contracts that do not include termination, which place the athletes in a helpless situation, to sign their way out of abusive contracts.
- Extremely uneven provisions are highly favorable to the brand over the athlete.
There have also been real cases of scams. Players have complained of receiving bad checks, fraudulent agreements that concealed secret conditions, and unfulfilled payment agreements. This student-athlete population can be highly vulnerable without representation (legal or financial), especially inexperienced ones who, in most cases, are underage.
Balancing Opportunity and Oversight
NIL certainly provides opportunities to athletes. Bringing them financial independence, exposure, and career-building opportunities. Yet, as was the case with Sluka, without regulation, the athletes are open to exploitation.
The second step of NIL reform is likely to entail.
- There needs to be better rules to make sure contracts are fair and can be trusted.
- Clear guidelines concerning the recruitment process, absence of tampering, and unethical procedures.
- The athlete should be educated on their finances to provide them with the tools to address taxes, contracts, and investments.
NIL has changed the way college athletics are done, and it has opened the doors to massive earning opportunities for student-athletes. However, it has also opened the doors to manipulation, tampering, and exploitation. Until the equilibrium is reached in a system that is fair and balanced, athletes will continue living in a state of indecision.
