A groundbreaking new study published in Management Science challenges conventional wisdom about Name, Image, and Likeness (NIL) policies in college football, demonstrating they actively enhance competitive balance and broaden opportunities for athletes. Researchers Tim Derdenger from Carnegie Mellon University's Tepper School of Business and Ivan Li at the Naveen Jindal School of Management, University of Texas at Dallas, find that NIL has led to a wider distribution of talent across college programs, directly benefiting athletes who seek to maximize their brands and earning potential. This research overturns the "rich get richer" narrative, asserting that college athletics now fosters a more dynamic and competitive environment for aspiring collegiate players.
The comprehensive study analyzed pre- and post-NIL recruitment patterns for 3, 4, and 5-star (a method for ranking football recruits based on on-field accomplishments, physical traits, etc.) recruits, uncovering a significant increase in talent dispersion throughout the college football landscape. Contrary to initial predictions, NIL opportunities empower lower-ranked football programs to attract higher-quality recruits, particularly among 5-star and lower-ranked 4-star athletes. This shift provides more athletes with greater leverage and diverse options, ensuring that talent does not solely concentrate within a select few elite institutions. Athletes now actively evaluate their options based on financial prospects alongside athletic ambition, driving a healthier market for their skills. "Our findings clearly show that NIL is not just about the top institutions; it's empowering a broader range of schools to compete for elite talent, directly benefiting more student-athletes," states Ivan Li, coauthor of the paper.
Furthermore, the research conclusively shows that competitive balance across college football has improved since the implementation of NIL. Sportsbooks now establish smaller point differentials for games, even after accounting for talent levels, team performance, and transfer portal activity. This evidence strongly indicates that NIL fosters more competitive matchups, increasing engagement and excitement for fans and participants alike. The policy creates a more unpredictable and thrilling sport where a broader array of teams can vie for top-tier talent and achieve success. Coauthor Tim Derdenger adds, "We've observed a tangible shift in competitive dynamics. These data speak volumes: NIL makes college football a more exciting and less predictable sport, which is a win for everyone involved."
The study also highlights that 3-star recruits, post-NIL, increasingly prioritize NIL earnings over traditional academic selectivity, often choosing colleges with lower SAT class averages or graduates with lower mid-career incomes. This demonstrates the profound influence of NIL on athletes' decision-making processes, as they strategically weigh immediate financial benefits against long-term academic or career considerations. Athletes now possess more agency in their collegiate choices, actively pursuing avenues that align with individual priorities and financial goals.
Policymakers should encourage NIL adoption across all programs and implement legally binding regulations for collectives, including mandatory registration and disclosure of deals for a more equitable and competitively balanced college football environment. Additionally, they should prioritize educating student athletes about NIL and the contractual norms and obligations by requiring NIL counseling and monitoring the long-term effects of NIL through regular research and policy adjustments.
