NASHVILLE, Tenn. (WTVF — For more than 50 years college athletes made a simple agreement with the schools they represented. In exchange for their athletic participation these students would receive academic scholarships that included free, full-priced tuition, room and board for the duration of their college career.
Over the years those benefits expanded to include full medical care, academic support and access to world class trainers and facilities.
“The value of the experience, which beyond just the scholarship – it’s the travel, it’s the health benefits, it’s the access to all of the resources,” Vanderbilt athletic director Cadice Storey Lee said. “And if we were actually to put a dollar amount on that it would be incredible.”
The academic cost alone of the averaged division one scholarship is worth $14,716 per year, according to debt.org. For fully funded sports like football or basketball where student-athletes receive full scholarships that cost jumps to $37,025 per year.
But as NCAA revenue soared to more than $13 billion by 2016, many began to believe that the student-athlete scholarship model was no longer enough.
“The student-athletes are producing all this value for everyone else,” Tennessee Attorney General Jonathan Skrmetti said. “Some of them will go pro and get rich, but most of them won’t. There’s so much value there and if the kids can’t capture a fair share of it then they are being exploited.”
A string of court decisions in favor of the student-athletes provided additional stipends that increased the full value of a scholarship. But it was the Supreme Court’s 2021 ruling on the lawsuit brought forth by former West Virginia running back Shawne Alston that changed the game.
In National Collegiate Athletic Association V. Alston, the Supreme Court unanimously upheld the district court’s opinion that the NCAA violated anti-trust law, unfairly restricting student-athlete compensation.
Justice Brett Kavanaugh further threatened the NCAA’s model in his concurring opinion that called the ruling “an important and overdue course correction”.
“Nowhere else in American can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate,” Kavanaugh wrote. “It is not evident why college sports should be any different.”
In the wake of the Alston ruling the NCAA immediately began to allow athletes to profit off their name, image and likeness.
But how much are they worth? And who is footing the bill?
“There’s 170,000 division one athletes,” On3 founder and CEO Shannon Terry said. “There’s about 8,500 that play football and men’s basketball that drive most of the revenue for the schools. Outside of that group most of the athletes are being taken care of. What NIL was intended to do was to give athletes an opportunity to go out and do marketing deals.”
But three years into NIL commercial partnerships like the one Caitlin Clark struck with State Farm or Caleb Williams's deal with Dr. Pepper have been few and far between.
The athletics administrators we spoke with estimated that between 90-95% of all NIL deals come in the form of roster payments from third party collectives associated with universities. Those collectives raise money from boosters and alumni and then enter their own partnerships with athletes, often with minimal or no strings attached beyond enrolling and playing at their school.
“It’s pay for play,” Terry said. “Almost all the money in NIL was coming from the collectives and boosters to play at that school.”
Terry has become one of the leading experts on NIL and the marketplace. After nearly three decades in sports media, he founded On3 in 2021 to cover the changes in college sports. Three years later the company has more than 200 employees and has become the premier NIL media platform.
On3 provides recruits and their families resources to help navigate the new NIL rules. It also established a NIL valuation tool, which suggests how much a player is worth in college athletics today.
“We know for the most part from talking to the athletes, the agents and the collectives – to some range – what the athlete is getting,” Terry said. “A lot of people don’t like the NIL valuation. I promise you this. This is from a third-party organization that doesn’t have any skin in the game. We’re not making money off this, selling deals for you or trying to get you to go to any school. We don’t care. This is what you’re worth.”
The On3 model’s helped hundreds of athletes negotiate deals in what has become an increasingly lucrative marketplace. Elite college players can make between $20,000-$30,000 per month in NIL.
Star college quarterbacks often command NIL deals in the range of $2 million per year. Colorado’s Shadeur Sanders tops On3’s NIL valuation at more than $4 million per year while the Athletic reported Tennessee quarterback Nico Iamaleava’s deal with Spyre Sports Group would pay him as much as $8 million total by the end of his junior season.
While most of the money has gone to football players, basketball players often command high money deals as well. Smaller roster sizes lead schools and their collectives chasing a few elite players they believe can help them win championships or make deep runs in the NCAA Tournament.
Terry says many basketball players have received NIL deals in the $1 million range and higher. Highly sought after big men Great Osobor and Coleman Hawkins each received $2 million NIL packages when they transferred to Washington and Kansas State, respectively, this offseason.
But the money isn’t just going to proven college players. USC quarterback commit Julian Lewis has already inked endorsement deals with Alo, Cactus Jack and Leaf Trading Cards. He holds a $1.1 million NIL valuation from On3 as he enters his senior year of high school.
“Not many 16-year-old kids buy their car and buy their dad a car,” Lewis said at On3’s Elite Series in Nashville in June. “It’s just a blessing. We’re providing for our families now. Not many college guys – or high school guys – go to college knowing they’re about to make seven figures.”
Brentwood Academy star George MacIntyre also attended On3’s Elite Series. The five-star recruit is considered the eighth-best QB prospect in the class of 2025. Like Lewis, MacIntyre has already benefitted from the new NIL rules, inking multiple deals.
But when it came to his college decision MacIntyre says he committed to Tennessee because he believed it was the best place for his long-term development and dream of playing in the NFL, not because it was the highest bidder.
“At the end (of my recruitment) it got a little crazy,” MacIntyre said. “I had schools I’d never visited before; I had boosters calling me saying, ‘I can write a lot of numbers on this check.’ I’d say, ‘no, I haven’t even been down to see (the school). I’m committing next week, so I’m sorry I’m going to have to pass on the offer.’”
But the money isn’t there for everyone. According to Sports Business Journal, only 17% of division one athletes made money from NIL deals in 2022.
That means a few players are now getting rich while playing college sports while most others receive nothing beyond their scholarships. A growing disparity between athletes on campus, and even on the same teams, which has already caused issues of jealousy and roster competition, according to several of the coaches and administrators we talked to.
“As these (NIL) dollars begin to be distributed,” Middle Tennessee State University President Dr. Sidney McPhee said. “You have certain athletes making six and seven figures and you have others, particularly on that same team, making less or none, that’s going to create some real challenges for institutions to be able to deal with.”
