The collegiate sports landscape has been undergoing some big changes of late, with potential ramifications for collegiate licensees and other companies partnering with universities and student-athletes on commercial ventures:
- A spike in popularity of women’s sports. Stars such as Caitlin Clark of Iowa and Angel Reese of LSU are driving interest in women’s NCAA basketball; gymnast and social media star Olivia Dunne, also of LSU, has been a top-earning star in the world of name, image, and likeness (NIL) deals; and 92,000 fans recently watched a volleyball match at Nebraska’s Memorial Stadium, representing the biggest audience ever for women’s sports. All of this creates new opportunities for potential licensees. Fanatics said this week it sold more Caitlin Clark merchandise in a 24-hour period than it has for any collegiate athlete in the NIL era, after she broke the NCAA women’s scoring record last week.
- The evolving NIL landscape. The NCAA has increased its enforcement of name, image, and likeness violations. Some coaches and their schools are calling for the federal government to create legislation that would impose some consistency and a more level playing field to the patchwork of state laws that currently govern the space. NIL collectives of alumni and boosters, which finance student NIL deals and are separate but closely tied to the university athletic departments they support, have gained a lot of influence, leading the NCAA to propose new rules to limit their power.
- More frequent student-athlete transfers. The NCAA relaxed student transfer rules in 2018 and the athletes are taking full advantage. Their decisions are driven by a number of factors, but better NIL earning opportunities are often at the forefront. When students with big national followings move from school to school each year, there are repercussions on ratings, jersey sales, and other commercial activities that not only affect the schools and the athletes but their licensees as well.
- Conference realignment and the growth of super conferences. Universities have been switching conferences at a fast pace, with the Pac-12 shrinking to just two teams, the ACC adding three new members for a total of 17 (but potentially losing Florida State in the near future), the Big Ten having 18 teams after the addition of four more, and the SEC up to 16 teams, among other changes. The realignments affect licensees who need to accommodate new logos and designs. Longer term, the changes could transform rivalries and alter the relative popularity of teams, with consequences for sales trajectories of specific universities’ merchandise.
- Students as employees? The question has come up as to whether student athletes should be considered employees of their universities under federal labor law. With three major cases currently going through the court system, observers believe the Supreme Court is likely to take up the issue, possibly as soon as this year. This could lead the way to direct compensation by colleges, collective bargaining by student-athlete unions, revenue-sharing, and other changes.
- High school athletes and NIL. Thirty-four states now allow high school students to earn money from commercial activities, and more are expected to join them in 2024. That opens doors for merchandise, endorsements, and other partnerships tied to well-known recruits before they turn pro.
Some of these trends will have a significant direct impact on commercial partners, including licensees, almost immediately; the consequences of others are more uncertain and indirect. While a few of these developments may create more challenges than benefits, at least in the short term, others open up significant new opportunities for companies that are active in, or want to join, the collegiate licensing space.
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