Bethel navigates new world of NIL money
The three letters that shook up the world of college sports this summer is NIL — Name, image and likeness.
Thanks to a recent Supreme Court decision, as well as changes in various state laws, college athletes will be able to make money off their NIL, including making endorsements.
While the biggest impact will be at the major college level — where some elite athletes have reported over $1 million in various deals — small college athletes also will have a chance to earn some extra money.
According to Bethel athletic director Tony Hoops, the National Association of Intercollegiate Athletics instituted a policy allowing students to profit off their NIL last summer.
“It’s already been implemented. NAIA athletes knew it, but didn’t know it,” Hoops said. “Especially in a COVID world. Now that the NCAA drives that market, and it’s been all over ESPN, everybody is talking about it. Everybody is wondering, ‘How is it going to affect me.’ It will be interesting to see how it plays out. It’s going to affect everyone down to the NAIA.”
Hoops said the key will be educating student athletes and prospective student athletes about what is and isn’t allowed.
Schools still cannot provide direct payments to student-athletes outside of scholarships or grants-in-aid. Schools also will not be able to “steer” student-athletes to opportunities to make money of their NIL.
Among activities student-athletes will be able to do is (and not limited to) seek sponsorships and endorsements; appear in commercial advertisements (including in their school’s uniforms and apparel; serve as coaches, clinicians and offer private coaching; and get paid as a part of their social media activities (an image maker or “social influencer”).
The student-athlete also has to be aware of some of the responsibilities.
NIL money is not considered part of the athlete’s scholarship and is subject to federal, state and local income taxes.
For a student-athlete receiving needs-based financial aid, that NIL amount will be deducted from the aid a student receives, an important consideration for sports where an athlete only receives a partial scholarship (nearly all college sports outside of NCAA Division I-FBS football, men’s and women’s NCAA Division I basketball and NCAA Division I women’s tennis, women’s gymnastics and women’s volleyball).
“With financial aid, you could claim money on the front end and lose money on the back end,” Hoops said. “It may really not even help you. That won’t always be the case, but their are realities. Ninety percent of student athletes in the NAIA, NCAA Division II, NCAA Division III and even most NCAA Division I athletes are not getting a full scholarship. … If you claim (NIL money) at a high enough level, then you might get $2,000 in (grant) money, but lose $2,000 in (grant) money on the other side.
“That’s the thing we need to educate our student athletes about, since that’s about every Bethel College athlete.”
Hoops said the school can provide guidance to student-athletes about the rules of NIL, but it would be up to the student to go out and do the legwork and marketing.
“It’s got to be driven by the student-athlete and not by the school,” Hoops said. “Some of that isn’t just educating student-athletes, but educating parents. Taking the time to conduct sessions to say this is how this will effect your student aid. Let’s be honest, 18-year-old student athletes don’t always know what a tax deductible item is. Educating the student is important, but educating the parent as well in some capacity, because they are likely claiming that student as a dependent.”
Teams, coaches and athletes all will also have to navigate the potential pitfalls when a star athlete gets a large endorsement, while a bench player may get little to nothing.
“That’s a reality we live in already,” Hoops said. “The star quarterback is on the front page of the newspaper many times and the lineman is not. That’s not fair and it’s definitely not equal.”
Hoops said he hasn’t heard of any rush of student-athletes to take business or marketing classes to take advantage of new opportunities.
Hoops said there also is concern where donors, who previously gave directly to the institution may start directing that money to the athletes.
“The institution is losing out and loses control,” Hoops said. “There are some real concerns about that.”
Another concern will be competitive balance in the KCAC with the various market sizes.
Avila University sits in Kansas City, Mo., the largest market in the conference. University of Saint Mary is located in Leavenworth, just outside of the Kansas City area. Friends is located in Wichita.
Sterling College is in a town of 2,328, one of the smallest.
Bethel is in the middle of the conference market-size-wize.
“The marketability is going to change,” Hoops said. “In the KCAC, how is that is going to change down the road? Even with the schools in the bigger cities, are there that many companies that will be willing to sponsor an athlete. With someone like a Sterling, Kansas, they are the biggest show in town. There might be local sponsorships that do more than what a Kansas City-based company does. … There’s good and bad. We’re in a good situation here.”
Hoops said at the NAIA level, an athlete’s sponsorship may come from that athlete’s home town. That’s a possibility as well.
Hoops said he hasn’t heard from any potential athlete sponsors yet.
“You’re going to see more of that this year because of the publicity the NCAA has gotten,” Hoops said.
Some other questions include to what extent a coach can mention sponsorship potential to a recruit, is a school liable under Title IX if athletes of one gender receive more than athletes of the opposite gender and are companies liable under anti-discrimination laws.
“You’re going to get x number of lawsuits,” Hoops said. “That’s going to lead to x number of decisions because of those lawsuits. It could almost come back to the corporation. It could get messy.”
In the long run, Hoops doesn’t expect much to change in the competitive balance of the conference.
“Much of this is driven at the Division I level in football and that is so much different than what happens in the NAIA and KCAC,” Hoops said. “It could help NAIA athletes in some cases. They could market themselves and provide platforms that a lot of students already use very, very well. That allows the student to express the flexibility and creativity that these students posses.”
Mark Schnabel can be reached at email@example.com