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No, that D-III school doesn't need an NIL Collective

What makes sense for Ohio State may not make sense for Ohio Northern.

Good morning, and thanks for spending part of your day with Extra Points.

At this point, I believe every P5 school has at least one NIL collective, and most of them have more than one. But we also have collectives popping up not just to support mid-major schools in the Mountain West, Missouri Valley or A-10…there are collectives for SWAC schools, Southland schools and WCC schools. Leagues with some of the smallest budgets in D-I will soon have multiple NIL collectives.

Could we get even smaller? Will D-III schools start adding NIL collectives?

Friend of the newsletter Cory Hogue over at Dave Campbell’s Texas Football asked several small-college coaches in Texas asked if they knew of D-II and D-III schools starting collectives.

“I know of one Division III school in Texas actively working on a NIL collective right now,” one coach said. “I’m trying to get something going here as well. I think everyone will have a collective within the next 10 years.”

“There will be a trickle-down effect. It started at Division I, and it’s going to work its way down to us sooner rather than later,” another coach said. “It’s definitely going to be a priority for everyone moving forward, so we have to start thinking of ways to get it done here that will make sense for our university.”

A handful of D-II and D-III schools have signed mass NIL deals via MOGL, but I am aware of only two D-III NIL collectives. One was launched to support Hampden-Sydney College last August (but does not appear to be currently active), and another to support Southern Virginia is about to launch. 

I’m sure a few other D-III schools will try to start these groups in the near future. But this doesn’t need to become a trend. D-III schools don’t need these groups.

NIL collectives typically do two things. They help facilitate brand--focused deals between athletes and companies (or charities), and they help fundraise to provide well-above-brand-market deals to athletes to encourage them to either stay on campus, or to recruit other athletes.

The brand deal facilitation can actually be a very useful service, if the collective actually has that skillset. Athletes generally don’t have very much free time, and many local businesses do not have the understanding or time to best coordinate marketing campaigns. A collective can handle the middleman stuff more efficiently, and also bundle athletes together to create more marketing value than an athlete might have individually.

Here’s the honest truth though. Most athletes at the D-II and D-III level do not have meaningful brand value and the ones that do typically have that value because of something the athlete can offer that has nothing to do with their status as an athlete.

D-III athletes generally do not have large social media followings, they are generally not in markets that care deeply about college athletics, and their university brand generally does not have enough local cachet to move a marketing needle beyond what a business could generate from other marketing strategies. In a world where ad budgets are contracting all over the country, a micro-influencer will need to work to provide value to a brand or find perfect alignment.

There’s no novelty factor in doing a NIL deal anymore. Almost no deal is going to generate earned media just because it involves an athlete, and especially not at the D-III level, where most programs don’t have a single beat writer or external media outlet covering them on a regular basis.

I believe it will be very rare for a NIL collective to find enough meaningful marketing deals for D-III athletes at just one school to justify its existence and fundraising. The typical local sandwich shop in a D-III college town is not just waiting for somebody to call before they throw money at the baseball team. Not in 2023.

Fundraising for roster-based NIL deals (or as I like to call them, bagman-NIL deals) also requires enough fans who are sufficiently invested in that team to reliably and consistently donate money.  

D-III schools usually have a hard enough time just getting people to buy tickets to events and donate to athletic departments in general, let alone cultivate new donor bases to give multi-year commitments. A powerhouse D-III program like Wisconsin-Whitewater has a budget of around five million, with the majority of that money not coming from ticket sales or donations…how are schools that get maybe $150,000 a year in total athletic donations supposed to build out collectives that can raise that same amount of money?

I asked Ayden Syal, the head of MOGL, if he agreed. He told me that he actually thought we would see an increase in collectives forming to support D-II and D-III schools, since “those schools are in recruiting battles just as much as D-I schools are, and they need to have answers for how they’re supporting athlete NIL.” But he also told me he expected “D-II and D-III collectives, in practice, to function much more as marketing agencies that help facilitate deals, rather than fundraising groups that control eight-figure funds.”

Maybe he’s right and I’m wrong. But in my mind, there’s no point in starting a collective anywhere that is going to raise or distribute less than $50,000 a year. It would be more efficient for those schools to simply conduct NIL activities in-house, bringing brands in for open houses, using campus resources to teach athletes about brand-building and entrepreneurship, or signing department-wide NIL deals. Splitting an already teeny tiny donor base to build a new organization with new overhead costs is a waste of time and money, in my humble opinion.

There may be a few on-off cases were a group could be sustained, especially if they can secure a multi-year commitment from some whale of a donor. But generally, just because something makes sense for Ohio State, doesn’t mean that Ohio Northern needs to do it.

Speaking of D-III, here’s what else we wrote this week:

I’ve been making lots of calls this week, and hope to have more to share with you about Notre Dame hitting the apparel free agency world, D-II conference realignment, the NIL marketplace (and where Extra Points fits in it), and much, much more.

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Also, I talked about Sports Twitter with Awful Announcing. Surprise! I don’t think it is going very well!

If you’re interested in meta-commentary about sportswriting (and who isn’t!), I chatted with Awful Announcing about the state of Sports Twitter these days, along with several other college sportswriting voices. My big Tl;DR is that I am really worried about having to depend on any platform that is unreliable and unpredictable, as my experience as a professional journalist has taught me that major tech platforms like Facebook and Google typically do not have my best interests in mind.

I’ve talked to a few folks who work in college sports communications who have expressed similar frustrations, and maybe I’ll turn that into a newsletter if there’s any interest.

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