In recent years, the sports landscape has been redefined by one major shift: the introduction of new policies around Name, Image, and Likeness (NIL) rights for student-athletes. This monumental change has disrupted traditional models of collegiate athletics, empowering student-athletes to profit from their personal brands while navigating new, uncharted territory. While these policies bring exciting opportunities, they also introduce a set of unique challenges for colleges and universities. At RiskVersity, this situation deserves special attention as contracts change, creating new and, in some ways, unprecedented areas of risk that need to be considered and planned for.
For decades, student-athletes were prohibited from receiving compensation beyond their scholarships. The governing body of college athletics, the NCAA, enforced strict rules that kept college sports equal among all amateur players. As the money on the table for rights to promote these athletes grew, so did legal challenges and increasing public pressure for fairness led to the passing of laws, starting at the state level, allowing athletes to capitalize on their NIL. This shift has been a game-changer for the entire industry.
Now, athletes can sign endorsement deals, appear in advertisements, or monetize their social media presence—all while maintaining their eligibility to compete. These new rules come with complications. Colleges and universities must navigate a new regulatory landscape while ensuring compliance with state laws, NCAA policies, and the internal values of their institutions.
With the freedom for student-athletes to engage in NIL deals comes a need for institutions to provide support and education. Schools must now offer resources to help athletes understand contracts, taxation, branding, and financial management. This represents a significant resource strain for athletic departments, which were not originally designed to offer this kind of business guidance.
Another challenge is the potential for inequality within teams. Star athletes may land lucrative deals, while lesser-known players could receive little to no attention. This can lead to internal team tensions and could even affect recruiting efforts, as top-tier athletes may lean toward institutions with more robust NIL resources and connections. Balancing these dynamics requires careful consideration and proactive communication from university leadership.
Moreover, the compliance and legal oversight required to manage NIL deals effectively adds another layer of complexity. Schools must tread carefully to avoid violations, as any missteps can lead to sanctions, reputational damage, and a loss of competitive standing.
Despite these challenges, NIL contracts offer tremendous opportunities for schools willing to adapt. By positioning themselves as institutions that nurture not only athletic talent but also business acumen, colleges can attract high-caliber athletes who see NIL deals as a pathway to long-term success. Developing educational programs around entrepreneurship, marketing, and contract negotiation is one way institutions can evolve and offer greater value to their student-athletes.
This shift also opens new avenues for partnerships with brands, local businesses, and even media outlets. Colleges can leverage the increased visibility of their athletes to create revenue-generating collaborations, boosting both their athletic programs and the broader institution.
For example, just as the XFL has explored new opportunities within football’s changing landscape, colleges and universities have a chance to rethink their own role within the commercial side of athletics. The rise of NIL could also inspire future franchise opportunities, where schools could work with professional leagues or businesses to further capitalize on athletes’ popularity. By being proactive in exploring these avenues, schools could significantly enhance their reputations and revenue streams.
When the rules change, the effects ripple throughout organizations. This is as true for the educational institutions with NIL policies as it is for organizations with new contracts and obligations. NIL policies are changing student athletes' lives, and changing contracts can significantly impact how organizations operate and prepare. Just as shifts in leadership or government regulations can reshape a country or an industry, NIL policies have fundamentally altered the landscape of college sports. While we haven’t delved into it here, changes in employment laws, like the recent California legislation on non-compete contracts, are another reminder of how quickly state-level changes can escalate to national standards.
For colleges and universities, staying informed and adaptable is key to thriving in this new era. Those that embrace innovation and actively support their athletes will be well-positioned to succeed, while those that resist change risk falling behind in a rapidly evolving sports ecosystem. At RiskVersity, we know that changing landscapes mean changing rules--and changing rules means new risk. If your organization is operating in a new environment, reach out to start the conversation with our team of experts.
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