How does NIL Change Things for College Basketball and Football?

The NCAA tournament is over, and the NFL Draft is still a few weeks away. Matt and Jadrian look at how Name, Image, and Likeness (NIL) regulations on college athletes have reshaped their behavior and influenced their decisions regarding their careers. They discuss the significant changes brought about by allowing athletes to monetize their name, image, and likeness while still in school. They highlight examples such as star basketball player Caitlyn Clark foregoing her last year of eligibility to head to the WNBA and Marvin Harrison Jr. sitting out during many of the NFL combine drills. Check out this week’s episode for more ways that NIL is shaping the landscape of collegiate and professional sports.

In this episode, we discuss:

• The transformative impact of Name, Image, and Likeness (NIL) regulations on college athlete behavior

• How athletes like Marvin Harrison Jr. and Caitlin Clark have been making business and professional decisions for years

• How NIL changes the incentives for athletes to go pro

• Speculation on potential long-term effects of NIL regulations on financial literacy among college athletes

• And a whole lot more!

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Some show notes:

Matt and Jadrian chat about how each week seems to just keep bringing a heavy amount of work at the start of the week, even though they feel pretty good about their workload by the end of the week. Thankfully, the podcast lets them take a break from it all and enjoy each other’s company. In honor of our sports-theme episode, Jadrian went with his favorite mass-market light beer, Coors Light. Matt has a much more refined palette and went with a Nice IPA from the Rusty Rail Brewery in Mifflinburg, PA.

We’ve talked about Name, Image, and Likeness (NIL) regulations for college athletes in a previous episode, but we wanted to dedicate this episode to how those regulations have impacted college athletes’ behaviors leading up to their professional debut. NIL fundamentally changed the landscape of college sports, allowing athletes to monetize their talents while still in school. Start college athletes like Caitlin Clark, Marvin Harrison Jr., and Caleb Williams have earned millions while enrolled in their respective schools.

In addition to the millions they’re earning off the court, college athletes have recently started changing their behavior in unexpected ways compared to before the introduction of NIL. In the past, the decision to stick around in college for another year often meant giving up big salaries in the professional league. That’s not always true anymore. It’s easier to stay another year in college when they aren’t giving up as much income as before.

Another change in college athletes’ behavior is around how they’re preparing for the rookie draft in their sports. We’re used to seeing players sit out during bowl games in their last season to avoid getting injured, but now we’re seeing some of the best players forgo on-field workouts or skipping physicals. Instead of being desperate to go to a team at a higher position in the draft for a bigger paycheck, players with strong financial savings from NIL deals in college may be willing to fall a few spots in the draft to go to a team that matches their preferences.

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It also leads to a really interesting question about how this sort of exposure to business decisions in college will impact players financially in the pros. There has been a historical trend of players going broke despite earning millions. That could all change now that many of these same players have smaller paychecks in college from their NIL deals. A little confidence in handling money in college and lead to some better decisions when the payouts get much bigger.

Jadrian followed up with the possibility that NIL may have spillover effects on other college students who learn about these decisions facing people of a similar age. College students often say they wish they had learned about how to handle money, but don’t show up when those presentations are made. Perhaps hearing about it in a sports context will get some more students to think carefully about it later in life.

This week’s pop culture references:

Since Matt & Jadrian mentioned ESPN’s Broke in this episode, it’s a great chance to remind listeners of how great this documentary was. It highlights the financial struggles of professional athletes after their professional careers end. Here’s a quick trailer of the episode:

Matt linked his pop culture clips this week to a great game theory example related to a Survivor Pool. It’s not related to NIL deals, but it offers an intriguing perspective on strategic decision-making in sports.