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As NIL (Name, Image, and Likeness) deals roar into 2024 as a billion-dollar industry, more brands are jumping on board with college athletes to promote their products or services.
As community stewards, dealerships have long-since been interested in featuring and promoting their local athletic super-stars. But, it wasn’t until 2021 that the NCAA (National Collegiate Athletic Association) threw out the old rulebook and ruled to allow NIL agreements, permitting athletes to sign endorsement deals and receive compensation for things like autographs, social media content, and appearances.
Nearly three years later and NILs now make up a billion-dollar industry.
How do you know if a NIL deal is right for you? Here are some things to consider.
UNDERSTANDING NIL
NIL stands for Name, Image, and Likeness. It's just the ticket for college athletes looking to control and profit from their personal brand. Thanks to recent policy changes, athletes can now monetize their NIL without worrying about NCAA sanctions.
Car dealers are now actively engaging with athletes for marketing partnerships to leverage their social media reach.
Most often, dealers are providing vehicles to student-athletes in exchange for promotional and advertising opportunities (think social media shout-outs, in-person appearances, meet-and-greets, autographs, etc).
HISTORICAL CONTEXT
For decades, college athletes were prohibited from cashing in on their fame and popularity. The NCAA's strict rules meant any attempts led to scandals and penalties.
Over the years, several high-profile cases have emerged of athletes, coaches, and schools circumventing NCAA rules to provide financial benefits to athletes.
One such case was the University of Southern California football program, which was hit with severe sanctions in 2010 after it was revealed that star running back Reggie Bush had received improper benefits. The scandal resulted in USC being stripped of its 2004 national championship and being banned from postseason play for two years.
RECENT CHANGES
In July 2021, the NCAA threw out the old rulebook, allowing athletes to earn from their NIL. They were finally able to sign endorsement deals and receive compensation for things like autographs, social media content, and appearances..
The floodgates have since opened, and college sports have never been the same. By 2024, the NIL industry is projected to hit $1.1B, with athletes from all sports cashing in on their marketability.
THE KICKOFF
LSU quarterback Myles Brennan scored the first known NIL deal with a dealership in 2021, paving the way for future deals. He received a Ford F-250 from a local dealership, showcasing the immediate impact of the new NIL rules.
PARTNERING WITH STUDENT ATHLETES
WHAT'S IN IT FOR DEALERS?
Mutual Beneficial. Athletes get the wheels, dealers get the buzz. Simple as that.
Visibility. Athletes' social media followings offer massive exposure. For example, an athlete with 100,000 followers can reach more potential customers than traditional advertising methods. Leverage the athlete’s social media to boost your dealership’s visibility. Encourage them to post about their new ride, tagging the dealership and using relevant hashtags to increase reach.
Potential Profit. A study by Tomoson shows an average return of $6.50 in revenue for every $1 invested in influencer marketing.
Community Marketing. Dealers tap into the local fanbase's passion. Partnering with local heroes strengthens community ties and boosts dealership credibility. Plan exciting public appearances, or host meet-and-greet events at the dealership where fans can interact with the athlete and scope out the inventory..
State-by-State. NIL laws vary significantly across states. Familiarize yourself with your state's specific rules to ensure compliance and avoid legal issues.
Local Relevance. Pick athletes with local fame. For example, partnering with a star quarterback from the local university can attract local fans.
Brand Alignment. Ensure the athlete’s image matches your dealership’s vibe. A luxury dealership might partner with a high-profile athlete to reflect its premium brand.
Social Media Reach. Evaluate their online influence. An athlete with a strong social media presence can amplify your brand’s reach.
Step 3: Craft the Deal
Compensation Models. Options include cash, car use, or endorsements. The average NIL deal for a mid-level athlete ranges from $1,000 to $5,000 per month.
Contractual Obligations. Clearly outline terms to protect both sides. Ensure the athlete agrees to specific promotional activities, such as social media posts or event appearances.
Taxes. Help athletes understand potential tax hits. They should be aware that receiving a high-value vehicle could lead to significant tax liabilities.
Step 4: Consider Compliance and Legal Factors
Potential Risks. This has the potential to be a very effective marketing method, but it is important to keep in mind the risks. Namely, you have a teenager driving a potentially very expensive vehicle, so you will want to make sure it is adequately protected.
Written Lease Agreements. Guard yourself by using formal and specific contracts. Ensure the athlete acknowledges responsibility for the vehicle and any associated liabilities.
Driver’s License, Background, and Insurance Checks. Ensure the athlete is a responsible driver. Conduct thorough checks to avoid potential issues.
Usage Agreement: Limit who can drive the vehicle to the athlete only to minimize risks and ensure Suzy Swimmer doesn’t let her boyfriend Johnny Lawless jump behind the wheel.
Step 5: Measure Your Success
Have A Plan. Establish a way to measure a successful partnership with KPIs. Monitor social media metrics and website traffic to gauge the partnership's impact.
Fine-Tune with Feedback. Collect data from surveys, social media interactions, and chatting with your customers to improve future campaigns.
