Sales and Marketing

What Type of Business Impact Will The NCAA’s NIL Compensation Have?

February 17, 2022

Finding an athlete who aligns with your business will create the best chance for a high return on investment.

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Student athletes can now profit from their name, image and likeness…so what does that mean for your business? As of July 1, 2021 most states are allowing athletes to earn money from their presence as an athlete. This opens up a slew of opportunities for businesses small and large alike. Endorsing an athlete could have a positive impact on your business financially and help you reach a demographic of fans that your product may not have gotten to otherwise. Keep reading to learn more about the ins and outs of NIL and what it could do for your company. 

What is “NIL” anyway?

NIL (Name, Image and Likeness) is a NCAA rule that recently changed which now allows college athletes to benefit from their name, image and likeness. This means student athletes can profit from autographs, endorsing products, appearing in advertisements and collaborations with brands on social media. 

Prior to this rule change student athletes were not allowed to reap these benefits and accepting money or any form of endorsements could actually result in them losing their scholarship and place on the team. This rule was originally set in place to keep amateur athletes free from the influences of money. 

This NCAA change first happened in 2019 in California when the state created a law that barred the NCAA from interfering in student athletes getting monetarily compensated for NIL. As of 2023 NIL will be passed in all states allowing all student athletes to benefit from this rule change.

How can NIL impact businesses?

It may initially seem that the change to this NIL rule may not have a larger impact other than to the athletes, however NIL creates a monumental opportunity for businesses. Athletes can now be endorsed by businesses and by associating your business with a highly esteemed athlete it can help you boost profits and gain new consumers. 

An athlete that is well known amongst your target audience increases the likelihood of consumers purchasing a product and will grow your business. If your business chooses to endorse an athlete, be conscious of who you are endorsing. You’ll want the athlete to have a positive image and background in order to reflect your business well. Now that you’re considering endorsing an athlete, below are all the points you are going to want to consider.

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Return on investment

Decide how much you are willing to spend on advertisements and set a goal for what you want your ROI to be. Factor in what type of advertising channels you’ll be using. You may be able to do your endorsement deal completely through social media to minimize the cost, or you may be able to do regular events and create more of a partnership.  Depending on your business, the ROI may not be immediate financial gains. 

For example, Journey Payroll & HR is excited to work with athletes that are leaders on and off the court.  Our first deal is with David Roddy, from Colorado State University, who is getting national attention for being a top basketball player in the country.  Journey’s business is tightly tied to the community and long term relationships, so we do not expect quick sales.  We expect to build our brand awareness.  A local sports store could work with an athlete for completely different reasons, and expect more immediate sales.  There is no boiler plate ROI, your company simply needs to have the ROI that is right for you, and have clear expectations going into these deals.

Cost to endorse

Figure out how much you can afford to pay a student athlete and essentially how much will motivate and inspire them to promote your brand.  This is a very new concept, therefore searching the internet and asking the athlete you’d like to work with is a perfect start.  The two most common options are a set monthly amount to do A, B, and C; or you can start at a lower cost and add incentives such as higher payouts for performance. 

Kevin Welch, Journey’s CEO says “These athletes are most likely having their first real-life business experience with you.  It is our responsibility to help them, not treat them like a commodity.  Outside of paying them, what else can we do for them?  We like to give a really cool signing kit to kick off the relationship with excitement, and provide other business advice where we can.  We have a lot more ideas on what we can do in the future, and I’m excited to give those surprises as we move forward.  Those are things not written in the contract, but it shows and teaches them that business should still be positive and fun.  Personally, I am also open to sitting down with these athletes and help them any way possible, any day of the week.  I would hope and expect other CEO’s do the same, as I believe it’s our responsibility.”

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Find an athlete who fits your brand

Finding an athlete who aligns with your business will create the best chance for a high return on investment. When selecting a student athlete things to consider are gender, sport, university and social media reach which is how many followers they can get your brand out to.

Specify what the athlete will be doing

Sales, marketing, social media, coaching, and memorabilia. Figure out exactly how you want the athlete to promote your brand before approaching the athlete, and make sure the athlete is comfortable with your requests.

Time to celebrate!

When you “sign” your student athlete, make it fun for them too! Celebrate your collaboration with them and get the athlete excited for their new position promoting your brand. This should be fun for them and you. Get creative with it!


Can Student Athletes Endorse Any Product?

While student athletes are allowed to endorse products under name, image and likeness there are limits to what can be endorsed. Products such as alcohol, tobacco, e-cigarettes and steroids are not allowed to be endorsed by student athletes. Additionally, services that relate to sports betting, gambling, and sexually oriented businesses are not allowed to be endorsed. 

All endorsements must go through the athletic departments compliance officers before a deal is approved.

Journey is about humanizing the workplace. From HR to payroll services we’ve got you covered. We are the #1 complete payroll solution for business owners. Anyone can sell the idea that they’re the best. We actually care more about delivering than selling, and we have the industry leading retention of 98% and local ownership groups to prove it. Reach out to Journey Payroll & HR today to see what we can do for you and business

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