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Impact of NIL Partnerships on Consumer Purchase Behavior
Name, Image, and Likeness (NIL) rights empower student-athletes to monetize their personal brands. A pivotal 2021 Supreme Court ruling catalyzed sweeping changes in college sports. Though not directly addressing NIL rights, the decision significantly swayed the NCAA’s interim policy, effective July 1, 2021, allowing athletes to capitalize on their image. The regulatory framework, however, remains intricate, with a patchwork of state legislation mirroring the U.S.’s decentralized approach to oversight.
In its inaugural year, college athletes collectively raked in almost one billion U.S. dollars from NIL deals.
While most athletes earn only a few hundred dollars from NIL deals, the average NCAA Division I athlete earns $3,711, and some elite athletes stand to make millions, reflecting the lucrative potential of NIL agreements. Football and men’s basketball athletes command nearly two-thirds of NIL earnings.
According to On3, a NIL valuation platform, the top 100 earners range from $561,000 to $6 million.
NIL deals span a broad spectrum, including ad campaign features, paid appearances, and autographed memorabilia sales.
Survey Insights
Elevent conducted an online survey with 2,000 American adults to assess the impact of NIL on sponsors.
At the survey’s time, 55% of participants were aware of the NCAA policy allowing college athletes to profit from their NIL.
Similar to traditional endorsements, partnering with an emerging sports personality has significant potential, but also risks, such as adverse effects on brand alignment with a controversial collegiate athlete.
When questioned broadly about the impact of a college athlete’s brand endorsement on their purchasing decisions, 21% expressed a willingness to patronize a company endorsing an athlete they favor.
Conversely, 17% would boycott or avoid a company backing an athlete they view unfavorably.
These findings align with sports sponsorship outcomes, where endorsements can sway fan loyalty and, consequently, brand perception and purchasing intentions.
Managerial Takeaways
Endorsement deals are fraught with potential scandals, ranging from illicit drug use to extramarital affairs, even crimes as severe as murder.
Endorsing public figures poses significant risks and rewards for brands, akin to placing all one’s eggs in one basket. As an example, the intricate partnership between Kanye West and Adidas serves as a cautionary tale.
The vulnerabilities associated with pro athletes extend to young, rising student-athletes.
A diversified endorsement strategy, complementing sports investments, is recommended to mitigate risks. A multi-level approach, aligning with various hierarchical levels like leagues, teams, venues, and athletes, can balance the portfolio.
Methodology
Elevent conducted an online survey of 2,000 adult Americans (18 years of age and older) in Q1 2022. The purpose of the survey was to understand how sports sponsorships impact American consumers. The comprehensive survey covered a wide range of topics, including the impact of sports sponsorships, corporate social responsibility (CSR), athlete advocacy, stadium naming rights, and sports fanbases. Among the respondents, 437 identified as runners (engaging in running/jogging at least once or twice a year, with the majority running/jogging at least once a week), and 343 identified as competitive runners (having participated in a competitive running race). The survey results were weighted using Census Bureau data based on age, gender, race, and region of residence, with a margin of error of ±2% (based on probability and a confidence level of 95%).
To learn more about Elevent, access the survey on consumer perspectives regarding the impact of sports sponsorship, or arrange a demo of the Sponsorship Lifecycle Management platform, please contact us at info@elevent.co.
Sources:
https://sportslens.com/news/biggest-sponsorship-deals-in-college-football-for-2023-8-26-23/
https://finance.yahoo.com/news/nil-heres-how-much-ncaa-athletes-earned-185901941.html
https://finance.yahoo.com/news/nil-heres-how-much-ncaa-athletes-earned-185901941.html
