Adweek – by Rafael Canton, Staff Writer, Jan. 5, 2022. Features thought leadership by LEARFIELD CMO Jennifer Davis.
Online Version. Full read below.
Companies like StockX and Outback Steakhouse seek out sports stars for representation
Despite the excitement and attention that comes with college football Bowl Games in December or college basketball’s March Madness, there’s been a financial inequality that has permeated throughout the NCAA.
During the 2016-2017 season, the NCAA topped $1 billion in annual revenue for the first time. NCAA conference the SEC could potentially reach $1.3 billion in revenue for its 2024-2025 fiscal year based on estimates. Despite all of this, up until July 1, NCAA athletes were not able to profit off their names, images and likenesses.
That all came to a head after the NCAA adopted an interim name, image and likeness (NIL) policy after years of pressure from state and federal legislators.
The NIL legislation opened the floodgates for student-athletes and brands. Fresno State twin basketball stars and TikTok mavens Haley and Hanna Cavinder were some of the first student-athletes to sign NIL deals, inking an arrangement with Boost Mobile. The Cavinder twins went on to then sign with brands like the WWE, retailer Champs Sports and athletic apparel brand Eastbay. UConn basketball star Paige Bueckers has also signed contracts with apparel brand StockX and Gatorade.
“Changes to the NCAA NIL compensation policy created an opportunity for StockX to be one of the first to do something disruptive in the space,” StockX chief marketing officer Deena Bahri told Adweek. “We immediately thought of Paige because she stands for innovation and disruption; she’s not afraid to use her voice for good and leverage her position for change.”
Even outside of the deals, many student-athletes can now sell their own merchandise and perform music thanks to the new ruling. Though the NCAA rule is in effect, there still are inconsistencies in terms of what states have NIL laws in place: 22 have created legislation that is currently active for NIL; seven have enacted laws that will become official between 2022 and 2025; 11 are still in the process of trying to pass legislation.
Five bills have been introduced in Congress to establish federal regulation for NIL, but the path to legislation is still ongoing. It’s been a learning experience for all parties involved in the last six months.
Value creation from athletes
UCLA quarterback Chase Griffin signed NIL deals with Shell, Degree deodorant, advertising agency UniWorld, grocery delivery service Duffl, Boost Mobile, Discord and Clearcover car insurance.
“I think the value of sport and the value creation of sport is intrinsic,” Griffin told Adweek. “Student-athletes now have the opportunity to act on this value on their own behalf and on their community’s behalf. There was a lack of equity where student-athletes who created value could not do anything with this value.”
When Griffin is negotiating his NIL, he has three markers that guide him. First, he looks at whether the brand aligns with his personal values. For instance, Degree was one of the first major brands to sponsor student-athletes, and the campaign aligned with his life story and values.
Next, he looks at economic value. It has to have a fair market rate plus future campaign potential. For Griffin, Degree was ideal since it had Unilever and WPP behind it.
The third marker was community value. The deal with Degree allowed Griffin to make a direct investment of 4,000 meals for the Los Angeles Regional Food Bank weekend BackPack program.
“We’re up to 20,000 meals donated above 4,000, and we’re going to make a large jump in the next couple of weeks just because Boost Mobile is making a huge community investment and almost doubling the amount of meals that we’re able to give,” Griffin explained.
Developing impactful partnerships
Brands are testing the waters with different types of partnerships. For example, StockX released an Air Jordan VIII University of Oregon Player Exclusive via its direct-to-consumer product release method called DropX. It’s the first player-exclusive sneaker to ever be released to the public for purchase. Proceeds from the auction of the shoe will benefit participating student-athletes on the University of Oregon football team, according to Bahri.
Outback Steakhouse liked the idea of working with various student-athletes under a broader partnership. Outback initiated the TeamMATES program, which allowed them to give back to their communities by raising money locally and nationwide. The players also dined with teammates and hosted give-back nights at local Outback Steakhouses to raise money for their favorite charities.
“We really believed that building an umbrella program like TeamMATES was going to have a much greater impact than the sum of its parts,” said Leah Burgess, director of marketing at Outback Steakhouse. “Together, the athletes we partnered with would be able to bring more impact and value as TeamMATES than they would individually because they would be able to create content together, engage with one another and give our program more significance and relevance with fans, media and communities.”
Burgess added that Outback wanted to build a hyper-local arm to its NIL presence. It launched an open application for college athletes across all sports and schools to apply to become a TeamMATE. It received more than 200 applications.
Sports technology company Opendorse revealed at the end of November that posting content accounted for 83% of NIL activities among athletes that use its NIL marketplace solution. Licensing rights is where student-athletes are seeing the highest rate of earning as it makes up over a quarter of total compensation.
Connecting brands and athletes
Last month, collegiate sports marketing company Learfield announced that it was creating the first nationwide NIL solution titled Learfield Allied, which allows brands the chance to pair student-athletes with university partner logos.
NIL created the chance for Learfield to provide national and local brands the opportunity to combine university intellectual property with the brand’s own engagement with student-athletes. Several schools including Duke University, Syracuse University, Florida State University and the University of Wisconsin have joined the launch.
In October, Learfield’s collegiate trademark licensing division secured a partnership with athlete licensing firm One Team Partners that would allow student athletes to opt in for their name, image and likeness to be used in products such as video games, jerseys and trading cards.
“We’ve been partnering very closely with the industry and specifically our school partners to help them navigate all of this and we’re excited about what is happening in this space,” said Jennifer Davis, chief marketing officer at Learfield. “It’s encouraging to all parties, and it needs to be done in a way that’s sustainable and make sense for all parties to want to be a part of it long term.”
In the dance between student-athletes and brands, it’s hard to quantify what value is created from a partnership. That’s where agencies like Excel Sports Management come in to analyze what partnerships make sense for both sides.
“One of the things that happened with NIL is that both the athletes themselves and the companies that are looking for athletes really wanted a language to understand how value is being created and that both sides can really benefits from the relationship,” said Adam Grossman, vice president, business insights and analytics at Excel Sport Management.
Grossman explained that Excel uses analytics to present how a partnership can be beneficial to both sides. Excel looks at the organic conversation around an athlete and how it impacts positive brand association. He noted that female athletes usually have a more organic conversation around them compared to male athletes.
“You want to look at how they impact the business, and if you look at it from that context, you can really see that female athletes have a significant intangible image or have the opportunity to have significant tangible impacts on businesses in ways I think that haven’t necessarily been captured before,” he said.
Where will NIL head in 2022?
In Outback Steakhouse’s eyes, the TeamMATES endeavor was a true pilot program.
“You will see us become more present in early 2022,” Burgess said. “We are working on our winter sports program plan at the moment, which will include men’s and women’s basketball and women’s gymnastics.”
From there, Outback is targeting male and female athletes in spring sports, taking a break in the summer and preparing for a big fall season when the next school year starts.
StockX is looking to keep amplifying women’s voices in sports.
“Paige has joined a handful of other power players we announced as brand partners earlier this year, such as skateboarder Briana King, professional gamer Sydney Parker (aka Sydeon) and sports personality Brittney Elena,” Bahri said. “We’ll work closely with Paige specifically on upcoming StockX campaigns, on community-driven initiatives tied to her passions, and we’ll be collaborating with her on exclusive direct-to-consumer product releases.”
It’s not lost on Griffin that these first six months could have an impact on the future for many young athletes.
“It all comes down to value creation,” Griffin explained. “If I have a deal for $1,000 to make a post, this is going to be the best post for this company they’ve ever had. That’s how I look at every single deal because I know that there’s going to be athletes 10 years from now that, depending on how the athletes of today went about NIL and provided value creation for the brands and for themselves that they work with, affects the market that they’re going to live in.”