By: Ashley Alford
Navigating the complexities of NIL can be challenging for student-athletes, especially those who are not familiar with the business and legal aspects of these deals. ‘Collectives’ have recently emerged as a new type of NIL organization that’s structurally independent of a university, but still closely related. Collectives are often the largest funders of NIL opportunities for a school’s student-athletes. They are typically founded by well-known alumni and large groups of fans.
So what exactly is a NIL collective? It is an independent organization, typically fundraised by boosters and other supporters, that creates NIL opportunities for athletes. NIL collectives may also provide other benefits, such as marketing and branding support, legal and financial advice, and networking opportunities.
There are several different NIL collectives currently operating in the college sports world, each with its own unique approach and set of offerings. Some collectives are focused on specific sports or geographic regions, while others are more broad. Some collectives may require athletes to pay a fee or give up a portion of their earnings in exchange for the services provided, while others operate on a non-profit basis. A list of collectives operating currently can be found on the Business of College Sports tracker- found here. Another tracker can be found on the On3 website.
For athletes who are considering joining a NIL collective, there are several factors to consider. These include the collective’s track record of success in negotiating deals, the quality of its legal and financial advice, the level of support and resources provided to athletes, and the overall reputation of the collective in the sports industry.
Examples of NIL collectives
There are already several NIL collectives that have emerged to help college athletes navigate the new landscape of NIL deals. Each school has one or a few collectives as well. Here are some examples:
1. Dinkytown Athletes (Minnesota)
Dinkytown Athletes have differentiated themselves by obtaining the support of the Minnesota athletic department. The head football coach, P.J. Fleck said that Dinkytown Athletes was “incredibly important for the future of our program, important for college football and all student-athletes.” Their goal, as laid out on their website, is to provide Gopher athletes with NIL opportunities, along with educational opportunities and post graduate career opportunities. They also hope to aid fans, by allowing them access to and experiences with their favorite Minnesota athletes.
2. 502 Circle Collective (University of Louisville)
502 Circle Collective, a locally-focused NIL Collective, has emerged as a force dedicated to advancing the interests of University of Louisville (UofL) student-athletes. The platform officially launched in August 2022. Guided by founder Marc Spiegel, a tech entrepreneur and UofL alumnus, in collaboration with a select group of passionate UofL alumni and fans, 502 Circle embodies the spirit of the UofL community’s unwavering support for its student-athletes. The collective introduced a user-friendly website that facilitates direct communication between fans and athletes, exemplifying a forward-thinking, digitally-driven approach. In the words of Spiegel, “We have a group of younger people that wanted to build a collective to help the athletes monetize themselves and do it in a way that is forward thinking. It’s new age. It’s not just a bunch of old money pulling together. It’s digital. It’s an experience.”
3. Rising Spear Collective (Florida State University)
Rising Spear, focused on Florida State, was one of the first collectives launched in the country in December 2021. It also became the first known collective to merge with another group when it absorbed Warpath 850 in May 2022. Rising Spear has already provided over 1,400 hours of localized, regional, and national NIL activation opportunities and appearances for more than 200 FSU student-athletes. Within the Rising Spear ecosystem, there are two entities: Garnet Spirit Inc. and Gold Standard. Garnet Spirit Inc., an approved non-profit organization, earned esteemed recognition as a distinguished business partner by Leon County schools. Gold Standard, the for-profit entity within Rising Spear, paves the way for student-athletes to embrace the full potential of their Name, Image, and Likeness through strategic partnerships with local, regional, and national corporations.
Considerations when joining a collective
Benefits of Joining Collectives
- NIL Contracts: Collectives provide a pathway for athletes to secure substantial endorsement contracts and lucrative monetary opportunities, maximizing their earning potential. By pooling resources and leveraging collective bargaining power, athletes gain access to higher-value deals while also benefiting from strategic guidance and streamlined administrative support.
- Collective Strength: Being part of a collective provides athletes access to shared resources, networks, and industry insights that can enhance their marketability and career trajectory.
- Negotiating Power: A collective can negotiate group deals, potentially securing better terms and opportunities for athletes compared to negotiating individually.
- Expertise and Guidance: Collectives often offer expert guidance in navigating complex NIL landscape, aiding athletes in maximizing endorsement opportunities while ensuring compliance.
- Diverse Opportunities: A collective’s varied athlete roster can lead to diverse collaboration and endorsement opportunities, broadening an athlete’s exposure and potential earnings.
- Risk Mitigation: Working within a collective can reduce individual risk by sharing responsibilities, ensuring legal compliance, and collectively addressing challenges that might arise.
Downsides of Joining Collectives
- Personal Brand Control: Athletes may need to cede some control over their brand and business decisions when joining a collective. This could limit their ability to independently shape their personal brand and pursue their unique goals and vision.
- Tied to Collective’s Performance: The collective’s success or challenges can directly affect an athlete’s career and earnings. A struggling collective may hinder opportunities and financial prospects for the athlete. Evaluating the collective’s stability is essential to mitigate potential risks.
- Value Alignment: If the collective’s values and priorities don’t align with an athlete’s, conflicts can arise, impacting the athlete’s growth and satisfaction within the partnership.
- Conflicts of Interest: The presence of competing endorsements or conflicting deals among athletes in the collective can lead to tensions and dilute the impact of individual endorsements.
Ultimately, the decision to join a collective should be a carefully considered one, weighing the potential benefits against the challenges and aligning with an athlete’s unique goals and values.
It’s important to note that while there are potential downsides, efforts are being made to address these challenges and strike a balance between the benefits and potential drawbacks of NIL rights. The long-term effects and implications of NIL rights are still evolving, and ongoing discussions and adjustments in policies and regulations aim to mitigate the downsides while maximizing the opportunities for college athletes.
NIL collectives are a new and evolving aspect of the college sports landscape, offering athletes a powerful tool for monetizing their NIL rights and securing better deals in the marketplace. As the NIL marketplace continues to grow and evolve, it is likely that more and more athletes will turn to collectives as a way to navigate the complexities of this new landscape. By understanding the pros and cons of NIL collectives, athletes can make informed decisions about whether or not to participate, and how to maximize their earning potential while protecting their brand and image.