How NIL Is Changing College Sports Investments

College Student-Athlete Investment Opportunities

Written by

Keaton Nankivil

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4 min

The recent NCAA policy change on Name, Image, and Likeness (NIL) has revolutionized the college sports landscape by enabling athletes to monetize their personal brands. This shift not only benefits student-athletes but also introduces significant investment opportunities in NIL platforms, brand partnerships, and technology solutions. Investors can capitalize on this emerging market by backing digital platforms that facilitate NIL transactions, engaging with companies that craft athlete-brand collaborations, and supporting tech innovations that assess athletes’ market value. As the NIL market matures, it offers prospects for potentially substantial economic returns and a more equitable sports ecosystem.

The collegiate athletic arena is witnessing a seismic shift with the NCAA’s new Name, Image, and Likeness (NIL) policy. This pivotal change is not just empowering student–athletes with brand monetization opportunities; it’s also carving out a dynamic new investment landscape.

In this blog, we’ll explain how this shift not only benefits student-athletes but also introduces significant investment opportunities in NIL platforms, brand partnerships, and technology solutions.

Webinar
How NIL Is Changing College Sports Investments

Presenters
Keaton Nankivil
Keaton Nankivil

Senior Principal, Sports Fund

Greg Baker
Greg Baker

Managing Partner, Sports Fund

Keith Marshall
Keith Marshall

CEO, The Players' Lounge

The collegiate athletic arena is witnessing a seismic shift with the NCAA’s new Name, Image, and Likeness (NIL) policy. This pivotal change is not just empowering student–athletes with brand monetization opportunities; it’s also carving out a dynamic new investment landscape.

In this blog, we’ll explain how this shift not only benefits student-athletes but also introduces significant investment opportunities in NIL platforms, brand partnerships, and technology solutions.

Capitalizing on Athletes’ Value

In 2021, the NCAA announced its decision to allow college athletes to profit from their name, image, and likeness (NIL) through endorsements, sponsorships, personal appearances, and social media monetization. This shift acknowledged the value athletes bring to their institutions, the broader sports industry, and a fanbase that attracts millions nationwide.

The new rules also created significant economic opportunities via platforms, brand partnerships, and technology solutions. The NIL market is worth an estimated $1 billion annually, according to NIL company Opendorse.* Investors can potentially capitalize on this emerging market by backing digital platforms that facilitate NIL transactions, engaging with companies that craft athlete-brand collaborations, and supporting tech innovations that assess athletes’ market value.

* “How NIL Deals and Brand Sponsorships Are Helping College Athletes Make Money,” Business Insider, April 2, 2024

The Rise of NIL Platforms & Marketplaces

Among the most immediate investment opportunities are NIL platforms and marketplaces. These digital platforms serve as intermediaries between athletes and commercial entities, facilitating endorsement deals, sponsorships, and content creation opportunities. Startups like Opendorse, INFLCR, and MarketPryce are leading the charge, offering solutions that help athletes navigate the NIL landscape, from legal compliance to deal negotiation and brand building.

Investing in these platforms can offer a two-fold advantage: Supporting the infrastructure that enables athletes to maximize their NIL potential, and capitalizing on the ecosystem’s overall growth.

Webinar
How NIL Is Changing College Sports Investments

Presenters
Keaton Nankivil
Keaton Nankivil

Senior Principal, Sports Fund

Greg Baker
Greg Baker

Managing Partner, Sports Fund

Keith Marshall
Keith Marshall

CEO, The Players' Lounge

Brand Partnerships & Sponsorship Agreements

The relaxation of NIL rules has also opened the doors for brands to enter into direct partnerships with college athletes. The scope for innovative and mutually beneficial partnerships is vast. Beyond sports-related brands, a wide range of national corporations, from FedEx to Keurig, as well as local businesses have sought to tap into athletes’ influence and reach.

Investors can look towards companies that are adept at crafting authentic brand partnerships, focusing on those that prioritize long-term value for both athletes and brands. Additionally, there’s potential in companies developing analytics tools that measure the impact and ROI of such partnerships, further refining the NIL ecosystem.

EXAMPLE: Brand Partnership Companies

One example is Players Tribune, which provides a platform for athletes to share their personal stories and perspectives. Through authentic storytelling, athletes can connect with fans on a deeper level, attracting brands aligned with their values and experiences. Another example is OpenSponsorship, an online marketplace connecting athletes with brands for sponsorship opportunities, including those related to NIL.

Learn More About the Sports Fund

Investors in the fund will own a diversified portfolio of innovative ventures in sports and gaming

Max Accredited Investor Limit: 249

Technology and Data Analytics for NIL Valuation

With the NIL market in its infancy, accurately assessing a college athlete’s market value is both a challenge and an opportunity. Technology and data analytics play a crucial role here, with startups developing sophisticated models to determine an athlete’s worth based on social media reach, engagement rates, and on-field performance.

Investment in these tech-driven solutions can not only enhance the market efficiency of NIL transactions but also provide valuable insights for brands, athletes, and platforms alike, ensuring fair and equitable deals.

EXAMPLE: Tech and Data Analytics Companies for NIL

Several companies are utilizing data analytics and technology to assist athletes in capitalizing on NIL opportunities. Opendorse provides tools for athletes to gauge their NIL value and negotiate fair deals with brands. INFLCR offers analytics to track social media impact and inform brand partnerships.

As the NIL landscape continues to expand, the need for support services will grow in step. Two primary areas of interest are in financial and legal services. As athletes generate more income from NIL opportunities, it’s important that they have the proper tools to manage their money intelligently. Universities may even adopt these platforms as a recruiting advantage to show their interest in supporting players. Similarly, with an ever-changing legal environment, access to legal services will be critical for athletes. Whether they engage these services independently or through the university, there is no doubt that a market will continue to emerge for professional services.

Investors have an opportunity to support these services, recognizing their role in sustaining the long-term viability and integrity of NIL transactions. Examples include Scout, which is building a comprehensive financial services platform for athletes, and Teamworks, one of the largest platforms in the athlete management space that has a compliance services module. Emerging services around NIL-specific legal needs will undoubtedly begin scaling soon.

NIL Investment Opportunities Just Beginning

The introduction of NIL in college sports represents a watershed moment, offering unprecedented opportunities for athletes to leverage their personal brands. For investors, this change promises a wealth of opportunities, from supporting the platforms that facilitate these deals to investing in the technologies and services that ensure their success.

As the NIL landscape continues to evolve, those who invest wisely might not only reap significant returns but also contribute to a more equitable and prosperous ecosystem for college athletes. The journey into NIL investments is just beginning, and the potential is as vast as the passion that fuels college sports.

Learn More About the Sports Fund

Investors in the fund will own a diversified portfolio of innovative ventures in sports and gaming

Max Accredited Investor Limit: 249

This communication is from Alumni Ventures, a for-profit venture capital company that is not affiliated with or endorsed by any school. It is not personalized advice, and AV only provides advice to its client funds. This communication is neither an offer to sell, nor a solicitation of an offer to purchase, any security. Such offers are made only pursuant to the formal offering documents for the fund(s) concerned, and describe significant risks and other material information that should be carefully considered before investing. For additional information, please see here. This communication includes forward-looking statements, generally consisting of any statement pertaining to any issue other than historical fact, including without limitation predictions, financial projections, the anticipated results of the execution of any plan or strategy, the expectation or belief of the speaker, or other events or circumstances to exist in the future. Forward-looking statements are not representations of actual fact, depend on certain assumptions that may not be realized, and are not guaranteed to occur. Any forward-looking statements included in this communication speak only as of the date of the communication. AV and its affiliates disclaim any obligation to update, amend, or alter such forward-looking statements, whether due to subsequent events, new information, or otherwise.