🏈 The new $1 billion “college athlete” industry

GM. This is Work "After" Work, the newsletter that gives you the cliff notes version to making money. We're like a Ted Talk on 2x speed 🏃‍♀️

What's cooking today:

• 🏈 Brands salivating at NIL deals

• 😂 Meme of the day

COLLEGE ATHLETES ARE RAKING IN MONEY

For the longest time, players making money in college sports used to be the biggest deal ever. You’d have famous college athletes literally lose their eligibility just because they made a little money. 

Rewind to just one year ago, and this is no longer the case.

College athletes can now make money off their NIL (name, image, and likeliness) after the NCAA passed the policy in July of last year.

Ever since then, it’s been a race for brands to sign college athletes and for athletes to make as much money as possible from their current fame as they may only have it for 4 years if the big leagues don't pan out.

Google Trends illustrates this well. Just look at the search interest for “NIL deals” these past 2 years.

In this first year of the NIL era, college athletes earned an estimated $917 million, according to data from Opendorse. Next year experts are predicting the industry to grow even more to $1.14 billion 👀

In an article by Action Network, the highest-paid player for NIL deals was Bryce Young, a quarterback for the University of Alabama, who made an astonishing $3.2M... he's only 21 years old.

Here's a chart of the top earners in college football.

Source: Action Network

Just imagine being Sean Tucker (bottom right) and making $239k. That is a ton of money for players in college and this is why NIL brand deals are only getting started.

Hercy Miller, an incoming Tennessee State University basketball player, signed a $2 million endorsement with a tech company called Web Apps America. He's 19, is ranked as one of 2021's top 100 recruits by ESPN, and signed a four-year deal before even setting foot on campus, according to a report by Knox News.

Stories like these are going to cause every new cohort coming into college to focus on one thing: their following. We're going to start seeing a new era of college fame... this industry is only getting started.

Here are two ways to score with this trend... see what I did there 😏

1. Marketplace for NIL deals

Imagine you're not a top recruit but you're still a solid college athlete. Chances are you won't have all the inbound traffic of deals the elites will have, but you're still good enough to get some brand deals.

You'll need to go somewhere to find these brands yourself. This is where a NIL marketplace becomes valuable - it helps connect athletes to brands.

There are a lot of companies out there trying to do this but there aren't any true winners yet.

For buying items in marketplaces there's a clear winner - Amazon (who made $470B in revenue last year)... and then you have its distant second, Alibaba, with revenues of $125B.

Since it's only year 1 of NIL brand deals, companies are still building and fighting for market share.

A marketplace you can replicate that has a great design is Opendorse:

How it works is players post their following (usually their amount of Instagram or Twitter followers) then their price for promotions like Shoutouts, Video Sponsors, YouTube ad reads, etc.

Brands scroll through the players they think will promote their brands the best and sign them.

2. Social Media / Ad Agency

Now I want you to imagine you're a freshman coming into college wanting to make money from all these NIL deals you're hearing about but you have no idea where to start or how to grow a following.

This is where an agency specialized in growing a player's following comes in handy.

• What kind of content should you be posting?

• What ads should you be making?

• How do you create these ads and post them to convert followers to your page?

• What platforms should you market on?

• How do you leverage your school's brand?

These are all things an agency can help with.

You take care of all the content while the athlete is perfecting the sport they're playing.

They show up, you take care of everything: creating the commercials, posting the ads, replying to followers to grow engagement, etc. 

Athletes know a solid following can lead to 7 figure brand deals so if you're able to grow their base, you're looking at a pretty sizeable agency from a percentage of deals and fees.

MEME OF THE DAY

That's it for today folks. See ya next time!!

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.