Forty years ago, Michael Jordan’s mother insisted her son receive a share of every shoe sold with his name on it — not just a standard endorsement deal. Despite that such an arrangement would give the athlete an unprecedented stake, Nike saw the value in a true partnership with Jordan. It signed the deal, starting what became a billion-dollar empire for both Jordan and Nike and a new world order for professional sports.
College sports is now staring at the same choice. The NCAA first allowed athletes to make money from name, image and likeness in 2021, and the House settlement allowed universities to become financial partners in NIL.
What comes next will define college sports for the next generation. Will university and business sponsors follow Nike’s example to create an ecosystem that makes athletes owners of their own future like never before?
New Mexico State University secured a major partnership with Chevron to sponsor youth basketball clinics across southeastern New Mexico. At one of these clinics, star guard Jemel Jones sought out a quiet 10-year-old attendee during a break to mentor the youngster on discipline, setbacks and the choices that carried Jones from Chicago to a Division I scholarship.
That mere 10-minute interaction is a poignant example of the opportunities available to all stakeholders in a system that allows athletes to fully pursue meaningful partnerships, as well as serve as ambassadors for their school and sponsors. Everyone benefits: Chevron expanded its brand presence; the university deepened its community footprint; and Jones, by exercising his autonomy, has influenced many young people in positive ways.
Two institutional constraints remain in the way of making these mutually beneficial activities the norm across college athletics: the revenue-sharing caps and the punitive NIL GO clearinghouse, which hampers athletes’ abilities to fully capitalize on their brand value.
The NCAA’s new model technically allows schools to share revenue with athletes but caps it at $20.5 million per year — no matter how much value a program generates. Coaches negotiate without caps. Development officers fundraise without caps. Universities build entire wings of campus without caps. Yet the athletes, who are the foundation of the entire operation — and who produce hundreds of millions of dollars in brand exposure — are the only ones facing arbitrary limitations on making business decisions.
The current market cap incentivizes universities to invest in the two sports that generate the most revenue and most often are profitable year-over-year: football and men’s basketball, which receive 90% of NIL revenue-sharing allocations. This leaves other sports with a dearth of resources when they are already often struggling to stay alive.
Consider former Iowa women’s basketball phenom Caitlin Clark. How much bigger could her already-sizable impact have been if she could have capitalized, beyond third-party endorsement deals, on the national attention and revenue she brought to her school? Things have changed since the House settlement, but the artificial limitation still prevents a true marketplace from enabling schools to pursue the next Clark in minor sports such as golf, tennis and volleyball, in addition to women’s basketball. The benefit is clear: Eliminating the ceiling will create more opportunities for every athlete.
Furthermore, it will eliminate the need for the cumbersome endorsement approval process by the NCAA’s clearinghouse — the last dregs of the old system. Right now, an athlete is required to submit paperwork showing that his private-sector investors will profit from sponsoring him. The old regime claims that this is oversight to prevent boosters from using NIL as a pay-for-play scheme, but it actually acts as a barrier that prevents small businesses from competing with corporations to partner with athletes.
The NCAA and member institutions place no such burden on the big businesses that buy naming rights for stadiums or shell out for television commercial spots during March Madness. Yet the clearinghouse process forces alumni and local business owners who want to invest in athletes to jump through compliance hoops. And the only logical reason for this double standard is that it protects the traditional revenue flows that the NCAA has historically enjoyed.
Everything else flows from these two reforms. A fair, functional and durable system will support the other essentials for a robust college sports economy, including financial literacy, academic alignment, entrepreneurship education and brand coaching. But these only make sense inside a system where athletes can actually benefit from the value they create.
Forty years ago, the right question wasn’t whether Michael Jordan should sign the deal offered to him. It was whether Nike would recognize his value and share in the upside. College athletics is living its own Deloris Jordan moment. Does this billion-dollar industry share in her wisdom?
Jordan Banegas is director of strategic projects at Proven Media Solutions. He previously led the NIL collective at New Mexico State University where he worked with athletes, universities, and corporate partners to build sustainable NIL models focused on community impact and long-term athlete development.
