Profitability as a Knock-on Benefit to Collegiate-Athlete Brand Compensation

Abstract

For the first time in the history of collegiate sports, college athletes can be compensated without the risk of losing their status as amateurs. The Fair Pay to Play act sparked a revolution of state laws allowing college athletes to be compensated for using their Name, Image, and Likeness (NIL). Agency representation, another allowance that has historically been restricted from college athletes, has been granted by these new laws. With the governance of intercollegiate play removed from the authority of the National Collegiate Athlete Association (NCAA) and placed in the hands of the individual states in which universities reside, the respective universities are now in a place to profit as knock-on benefactors. NIL brings corporate relationships closer to the University and, in some states, allows boosters to serve in the capacity of sponsors. Using the school's intellectual property – logo, brand, mascot, etc. – cannot financially benefit the collegiate athlete but can serve as another opportunity for universities to profit from the existence of the NIL legislature. This research explores the impact NIL laws have had on the financial performance of the Universities in the Southeastern Conference (SEC) West Division. The correlational study analyzes the profitability of universities before and after the NIL legislature passed to determine if there is a correlating pattern. The study leverages key performance indicators to describe the financial performance of seven universities across five states. Although the metrics suggest a correlation pattern before and after NIL was passed, it does not find significant variation between the profitability metrics or the components that measure profitability.