- New Name, Image, and Likeness (NIL) mean that college athletes have dozens of new ways to monetize their personal brand
- One of the most popular ways is to create and sell artwork as NFTs using the blockchain
- Thousands of athletes have already launched their own NFT storefronts to have greater control over commissions and royalties.
It’s official – college students involved in all three athletics divisions can now generate revenue from their name, image, and likeness (NIL). The newly announced interim policy change took effect on Thursday, July 1, 2021, and seven states have already adopted the new NIL laws. InWe’ll take a look at what this policy change means for college athletes and how they can leverage blockchain (smart contracts) to create a new income stream using their personal brand.
A History Lesson
College sports, especially football, is a multi-billion industry. Statistics show that even after excluding money from corporate sponsorships and broadcasting rights, college athletics garnered a whopping $14 billion in revenue in 2019. The packed stadiums nationwide across campuses translate into apparel deals, network contracts, and wealthy coaches.
And everyone involved gets a piece of this cake, except the athletes – which sounds like a cruel irony at best and exploitation at worst. Furthermore, instead of salaries, student-athletes are given scholarships. NCAA records show that there are over 150,000 student-athletes in Division I and Division II who receive the sum of $2.9 billion in athletics scholarships.
The average scholarship is about $18,000 which can’t cover tuition for the vast majority of out-of-state students or private schools. In short, most college athletes on scholarship receive the shorter end of the financial stick.
The main premise behind this stance is that NIL restrictions and scholarships supposedly create a clear distinction between college athletics and professional sport and also protect the integrity of college athletics as an amateur sport.
Both Florida State QB McKenzie Milton & Miami QB D'Eriq King have NFT's up for auction right now.
— Joe Pompliano (@JoePompliano) July 30, 2021
They include a video message on the back & were conceptualized by Dreamfield, the NIL platform that they co-founded.
The auction ends tonight.
Link: https://t.co/xZdg8w367Y pic.twitter.com/fC7CPW2OyQ
What Does the Name, Image, and Likeness (NIL) Laws Mean for College Athletes?
For a very long time, the National Collegiate Athletics Association (NCAA) prohibited college athletes from monetizing or profiting from their name, image, or likeness in any form. This changed in July this year after a Supreme Court ruled against the NCAA. This new policy will remain in place until a national standard governing college athletes’ NIL rights have been developed and implemented.
In a nutshell, a lot has changed for college athletes in the past two months – and for the better.
The policy also allows recruits and college athletes to:
- make money from personal appearances, endorsements, or signing autographs,
- leverage personal service providers as long as their specific universities endorse their activities and don’t contravene the applicable local state laws,
- attend college in states lacking NIL laws while still retaining the liberty to monetize their NIL.
Take the case of Hanna and Haley Cavinder of the Fresno State University women’s basketball team. They made and posted some viral videos on their TikTok account during the COVID-19 outbreak. With over 3 million followers on social media, they’re among the most prolific social media brands in college athletics. Several companies, including the Associated Press and Boost Mobile, already contacted them with deals on making them their brand ambassadors – a brilliant example of how college athletes monetize their NIL.
The states of Alabama, Florida, Georgia, Mississippi, New Mexico, and Texas have already fully signed the NIL legislation that became law beginning July 1, 2021. The other four states, Illinois, Iowa, Ohio, Nebraska, and Oregon, are in the process of bringing similar laws into effect. Additionally, many more states are expected to follow suit before 2025 as it is in their best interest to do so.
And although the NIL policy is minimalistic in outlining the earning potential of college athletes, new ways to capitalize on the policy change are already here. And one of the most interesting methods is within the blockchain space, called non-fungible tokens (NFTs).
NFTs and NIL Rights
College athletes eyeing the NIL market can get better returns by commercializing their brands via non-fungible tokens (NFTs). In essence, college athletes can turn images, songs, games, or other products into NFTs with a very simple process. They can then sell the digital NIL content they produce across marketplaces using smart contracts for athletes.
And unlike Bitcoin and other cryptocurrencies that are fungible, NFTs are unique in that they aren’t uncommon and are interchangeable. Individual NFTs can represent a single item in the form of a digital collectible or digital art. The NFTs are a digital representation of a tangible art form, but the creator retains the ownership copyright. Twitter founder Jack Dorsey and a host of artists and musicians have become multi-millionaires thanks to NFTs.
College athletes can profit from NFTs by creating their marketing platforms. Take the case of golfer Bryson DeChambeau who used NFTs to release five different digital trading cards in March 2021. He made at least $64,000 in digital currency in 24 hours when he placed copies of his cards on auction at the Open Sea NFT platform. College athletes Luka Garza and Lebron James recently made $210,000 after creating their own NFTs.
The only problem with selling NTFs on a platform like Open Sea, SuperRare, or KodaDot is that college athletes have to include an intermediary in the process that takes a cut from their revenue. Not only that, college athletes would also never get royalties from secondary transactions, for instance, if someone sells the original artwork on a different platform.
Dreamfield NFT Brand has arrived @McKenzieMil10 @DeriqKing_ https://t.co/fqrhq8SPYi
— Dreamfield (@dreamfieldco) July 1, 2021
Fortunately, it’s just as simple for college athletes to create (or mint) their own NFTs using NiftyKit’s Smart Contracts and not lose a percentage of their revenue. On top of this, college athletes can control the commissions they receive on primary sales and also royalties on secondary sales on platforms like OpenSea.
Related: The universe of digital collectibles defined—in seconds
Wrapping up: Smart Contracts for Athletes
By learning to create and use smart contracts for athletes, college athletes can employ NFTs to represent their ownership of assets like digital fan rewards, memorabilia, or tokenized equity in their earnings. Smart contracts for athletes have the potential to expand the reach of the influence of their NIL. The smart contract law will enable college athletes to use a blockchain ledger to track digital editions of their memorabilia and verify ownership, provenance or take note of any upgrades.
Revenue from crypto-based art is already nearing $800 million since the past year with almost a million artworks sold. The niche is so lucrative that Nike recently patented a concept called CryptoKicks that enables guests to create and sell digital shoes as NFTs.
The key takeaway of the new NIL law is that college athletes have a huge opportunity to create a new income stream and raise funds for themselves. And one of the best ways to have full control over this income stream is to use NFTs alongside smart contracts. The NFT model is ideal for college athletes to build their brands by enabling them to create and sell digital content. Customized NFTs can include royalty rates and ensure an athlete’s NIL guidelines are followed through smart contract laws. Learn more about NFTs and how you can sell artwork based on your name, image, and likeness using smart contracts today.