The Economic Effects of Name, Image, Likeness (NIL) on the College-Sports Market

Background

In mid-2021, the NCAA relaxed longstanding limits on athletes profiting from their name, image, and likeness (NIL). This caused the college-sports ecosystem to experience a rapid and visible re-pricing of athlete value. That shift created economic winners and losers, revived debates about fairness and amateurism, and prompted new legal and institutional changes that will shape college athletics and local economies for years. This article examines how the NIL market has affected revenue, spending, and distribution; the controversies and structural consequences that have followed; and how local economies and student-athletes are responding to these changes.

The overall size of the NIL market grew quickly from small, local deals to a multibillion-dollar industry. According to the Opendorse “NIL at 3” report, NIL compensation processed through disclosed transactions exceeded $250 million by mid-2024, drawn from more than 150,000 athlete users. Their data also shows year-over-year growth: for example, the top 25 football earners have an expected annual NIL compensation of about $294,134 per athlete and suggest NIL market valuations of $1.2 to $1.7 billion by 2025.

The landscape naturally changed through major judicial decisions. First, the Supreme Court’s decision in NCAA v. Alston (2021) undermined broad NCAA compensation limits and opened the door to further antitrust challenges arguing that colleges could not block students from forms of income. Further litigation monumentally shifted the economic landscape of the NCAA.. Second, the House v. NCAA settlement (2024–25) created large-scale damage awards and an explicit pathway for schools to pay athletes from institutional revenues and requires the NCAA to pay roughly $2.8 billion in past NIL compensation. This fundamentally changed college sports and together, these cases transformed the legal and economic baseline for college sports.

Financial Distribution

Power Five programs and high-profile athletes capture a disproportionate share of NIL spending. Major programs attract more major endorsements, have a larger alumni network, and their athletes command larger deals due to marketshare. Analysts consistently show that per-athlete and per-school NIL money is heavily concentrated at the top tier programs. For instance, Shedeur Sanders leads On3’s NIL valuation charts. His On3 valuation has reached around $5.1 million (or in some reports, $6.5 million) thanks to high visibility and elite branding. Sanders cultivated an elite national following while he playing for Colorado. Leading into the draft, everyone had an opinion about Sanders. Meanwhile, Dillon Gabriel has a lower valuation (On3 lists him at $1.7 million in some accounts) despite being a top quarterback and getting drafted before Sanders. This shows the disparity among NIL compensation based on popularity. Popularity isn’t parallel with social media following. College programs with strong branding or large alumni bases are at an advantage. Wealthy or popular programs easily attract endorsement deals. Critics have argued NIL will widen the gap between large and small schools.

Community-Level Economic Effects

The rise of NIL has reshaped local economies. Collegetowns . The rise of NIL has also reshaped local economies, especially in cities and college towns where athletics are central to community identity. In regions tied to powerhouse programs, NIL has injected new money streams that ripple through many sectors. Local restaurants, car dealerships, apparel shops, and small media outlets now partner directly with athletes or collectives, using them to boost visibility or drive promotions. For example, when some high-profile athletes host events, it has the possibility of stimulating the economy. These events draw fans, media, and extra spending, and strengthen local brand networks. And over time these athlete-driven partnerships encourage entrepreneurial ventures. Collegiate athletes now launch apparel lines, make content, and create merchandise. This is a natural product of rankings and popularity. In contrast, schools in smaller conferences or economically weaker regions often struggle to replicate this success. Local businesses may lack the capital or risk appetite to invest in NIL deals, and alumni collectives are smaller. Thus, the benefits concentrate in markets already advantaged by large athletic brands and donor bases. Over time, NIL may show geographic economic inequality. Bigger schools will receive more NIL money compared to their small school counterparts. 

Impact on Student-Athletes

NIL has essentially given student-athletes more autonomy than ever before. However, added responsibilities has introduced new pressures and inequalities among athletes. The top-tier athletes in high-exposure sports can land deals worth upwords of $1 million. College aged adults are now obtaining generational wealth setting a new precedent. As mentioned, Shedeur Sanders’ valuation exceeds $5 million according to On3, making him one of the highest-valued college athletes. That contrasts sharply with average NIL earnings: the Opendorse report finds that many athletes with less visible roles have smaller deals.

For a majority of athletes, NIL income is life-changing. NIL income has the ability to cover tuition, housing, or personal costs, offering financial relief that was previously unavailable. But only a minority receive those large contracts. Most NIL deals are typically modest, occur in a piecemeal negotiation context, or are highly conditional. Athletes now juggle brand management, contract negotiations, social media presence, and academic requirements. These are tasks for which athletes have very little training. 

There is also a risk of exploitation. Athletes without representation may sign unfavorable contracts or mismanage their finances. The pressure to build a brand may in some cases distract from academic performance. Some athletes now view their time in college as more of a business platform than as an educational experience. This can shift incentives for students  that will challenge university academic missions. 

Conclusion 

The NIL era reframed college sports from a system that separated athletes from commercial markets into one that recognizes their true economic value. Business strategy, branding, fundraising, and capital flows are now central to how athletic programs compete. NIL has unlocked opportunities and new income for athletes and institutions, but it has also deepened divides between powerful and marginal programs, and between thriving and struggling communities.

The real question going forward is not whether NIL continues, but how it will be managed. Schools, conferences, and regulators must find ways to balance growth with equity, to ensure that college sports evolve into a fair and sustainable marketplace rather than one that amplifies existing imbalances.