One thing I have not seen in the discussion and analysis of this new NIL regime is the change in total dollars spent and made in the industry. Here's what I mean:
- Universities - will still sell tickets and jerseys, will still provide scholarship funds, and will still be required to build top-notch facilities to remain competitive, which means donations will need to come in at the same rate they always have. So, this seems like no change, in the aggregate.
- Players - will still receive a scholarship for tuition/room/board and a living stipend from the University. Now, players may also receive NIL funds, which is a completely new bundle of money entering the equation. Thus, a net increase in money flowing to players, in the aggregate.
- Fans/donors - will still buy tickets and jerseys, and will still donate to facilities, athletic department, etc. In that regard, they will spend the same as always. Now, you have NIL funds that will also be paid to players, and these will be coming from fans/donors (at least, that's my understanding of where this money comes from). Thus, the entire new bundle of money that is involved in college athletics is expected to be provided exclusively by fans/donors.
Here is my point - this entire conversation pre-supposes that fans/donors of Universities have the interest and the financial wherewithal to fund an additional bundle of money (NIL payments) that was never there before, thereby donating some percentage more than before in the aggregate, for no specific additional benefit, other than the fear that if they don't do it, others will and their favorite team will suffer competitively. The early discussion of the topic and rumored actions (creating collectives, etc.) seem to suggest that this is absolutely true - that is, fans/donors are collectively willing to give more money, there apparently just needed to be a compelling case made as to why that additional giving was necessary (like competing in the NIL landscape). I just wonder if it will actually turn out to be true, or whether the assumed willingness of donors to give in these collectives will not measure up. It's an amazing economic exercise, that people can be convinced to simply increase spending, getting nothing directly tangible in return (just the hope that their giving will advance the cause of their favorite University's athletic department, which ostensibly is why donors gave money previously as well).
Sorry to ramble, this topic is just objectively interesting, in addition to sparking subjective emotions in people (including me) about the effect this will have on amateurism in athletics, competitive balance, etc.