The Future of NIL and College Sports
We all love this uniquely American institution of college sports, but it's broken. We built Fanstake because we believe our model can play a small part in bringing about a new era of college athletics. In order to understand where we're going, it's important to study how we got here.
When the NCAA finally opened the door to Name, Image, and Likeness (NIL) deals, it was clearly going to let the proverbial genie out of the bottle. In hindsight, it’s almost surreal now that the old model lasted as long as it did; a model where the NCAA thrived as a billion-dollar industry while student-athletes received no compensation beyond scholarships (and were actively punished for even the slightest infractions). Four years later we’re at a precipice, finally acknowledging that the athletes fueling this system deserve more for their talent, dedication, and yes, labor.
It’s hard not to appreciate the nostalgic idea of amateurism. We all want to believe that athletes should play for school pride, the name on the jersey, and the unique spirit of their student body. We think it for a good reason - many of us share in that university pride. We’re passionate about our allegiances, and we want to root for those who are passionate about them as well.
The first thing to acknowledge is that passion and pride are not mutually exclusive with compensation. I’d argue the entire professional journey is a search for fulfilling work that’s coupled with fair compensation. The second more pointed truth we must acknowledge is that college sports hasn’t been a true non-profit enterprise for over half a century. Amateurism might look like students who are athletes, but then it would also look like teachers who are coaches - and we know that isn’t the case. What it looks like in 2024 is nonsensical conference realignments based on maximizing every last media dollar, be-damned tradition or anything else that gets in the way.
The reality is the NCAA has been one of the largest professional sports organizations in the world for decades - ahead of all US and International leagues save for the NFL. College football alone surpasses the NBA and the MLB in revenue, yet there’s still a vocal faction who believe these athletes should have significant limitations on their pay - an odd marriage of one uniquely American tradition in stark contrast with our uniquely American capitalist ideology.
The House Settlement: Progress, but Not a Solution
The recent multi-suit settlement (colloquially known as The House Settlement), marked an important step forward, validating that NCAA athletes deserve real compensation for their contributions. This is a necessary acknowledgment of the value these players bring to college sports, but it’s not a magic fix. The cap for athlete compensation is set at around $20 million for many schools, a number that, when distributed across all sports, doesn’t come close to matching the real market value of athletic talent.
Consider a powerhouse like Ohio State, who has over 1,000 student-athletes competing each year. If that $20 million were split evenly across all athletes, it would amount to roughly $20,000 per athlete—a sum that’s unlikely to reflect the actual distribution of the revenue (let’s save Title IX fairness and distribution for another post). So realistically, let’s say the lion’s share will go to these high-visibility sports, but even then, it falls short. With optimistic distributions, an average football or basketball player might make around $110,000, which might sound substantial, but it pales in comparison to professional salaries. The average starting offensive guard for a middling NFL team, for example, makes $2.5 million per year. The average ESPN 300 recruit has 15+ offers from D1 schools - the demand vastly outstrips the supply. Does it make sense then for the starting offensive guard at, say, Alabama to make a 1/20th of that amount?
So then - why this discrepancy? In short, college sports has never operated in a free market. In many ways, the compensation is depressed simply because it can be. The schools, through collaboration with one another, have set the cap to an amount they can live with - but are still proactively preventing the type of competitive compensation that you’d expect for elite talent in an open market. The House compromise is merely the least painful step the NCAA was forced to take.
As you might expect, this is the exact reason an antitrust carve-out is so coveted by the NCAA. They’re quite aware (they are educational institutions after all) that any model where competitive bodies collude to cap compensation without negotiation and/or representation is, and has been, illegal in the United States since 1890.
For Colleges, It’s a Financial Tightrope
To be clear though, our position is not that the Universities and the NCAA are inherently greedy. On the contrary - they’re in a genuine pickle.
Paradoxically, while athletes still aren’t getting fair market value, the money involved is an amount that nearly none of the schools have at their disposal. Colleges rely on revenue from sports like football and basketball to fund less profitable sports, academic initiatives, and other campus needs. The reality is even though the NCAA might be as big as the NFL, it’s not the NFL, and its operating costs are inherently more complex. Even amongst the top programs there aren’t endless resources, and an additional $20 million in athlete compensation could mean drastic budget cuts elsewhere. Olympic sports, scholarships, facilities or staffing will likely be reduced or eliminated to cover these costs, leaving schools and the sports themselves in a financial bind, and ironically, worse off.
Taken a step further beyond the top-tier programs, hundreds of other Division I schools simply can’t compete financially, effectively creating a new divide that will be coming within college sports. These budgetary constraints risk wiping out the long-cherished tradition of underdog success stories and cementing a new “two-tier” reality in college athletics.
No more Davids, just Goliaths.
So, Where Do We Go From Here?
The structure of college sports is unique—the truth is, no other industry follows a similar model. Yet we keep trying to force it into a mold that makes sense, balancing the need to honor tradition with the desire to create a sustainable, fair system. We believe that for college sports to thrive the future system has to benefit all parties involved, and it needs to maintain the unique heritage that makes it so special.
We built Fanstake because we think it’s going to be an integral part of addressing all of these challenges. Through Fanstake, grass-roots fans get closer to the action - and have a real, no-risk say in shaping their teams’ rosters in a dynamic system where athletes can earn market value, schools can sustain their programs with supplemented revenue, and the competitive spirit that defines college sports can thrive. Fanstake’s model enables athletes to extend their college careers, empowering them to complete their education and maximize their NIL opportunities. Furthermore, a negotiated compensation stack that includes capped rev share coupled with maximum NIL opportunities is a collective bargaining agreement that both the athletes and the NCAA can agree to.
The future of NIL and college sports won’t be perfect or without challenges. There’s going to be controversy because we all care, and we all love this uniquely American tradition. But with innovative models that balance tradition, equity, and financial sustainability, it can be something even better: a system that celebrates talent, democratic principles, and supports all players on the field. We’re excited to play a small part in what will inevitably be a team win, and we can’t wait to see what the next generation of this thing we cherish grows into.
