How does NIL money work?

[u/Successful_Tennis567]

Does anybody have a good grasp of the NIL process? Are students technically employees of the school (or of a school's booster program)? Are students "private contractors" who have independent contracts with the school and businesses (like a 1099)? I understand many student athletes have brand partnership deals on social media where they have codes and I'm assuming that's independent, but when you hear "this student is getting paid $X amount of money to play for X school", how are those funds administered? Are students required to report all earnings to the NCAA/University?

Bonus questions - If students are employees of the school, are they required to participate in employee pension programs and the like?

[u/14Rage]

The students are not employees, but that is probably the most logical next step in this evolution. Employees with contracts, and football eligibility being null if you break the contract. I would imagine this will happen in the next decade or so. I would assume the players will also become part of a massive union when this shift happens, much like higher paid graduate teaching assistants. It could be that this becomes the major differentiator between division levels, much like number of scholarships was in the past.

[u/ksig84]

Won’t name the school but my friend’s son plays at a smaller FCS school that pools their NIL money/donations and distributes it equally throughout the team. His sons check was around $26.

[u/Successful_Tennis567 → u/ksig84]

Sheesh. Basically working for a free meal at Applebees.

[u/Low_Management_7496 → u/Successful_Tennis567]

NIL is on top of scholarship. So total compensation is better but yeah it's fcs

[u/frickfrack1]

there's supposed to be 2 types of player compensation, "House revenue sharing" and "legitimate NIL". The schools pay athletes directly out of the revenue sharing, which is capped but no FCS program is anywhere near that cap. A number of FCS schools opted out of rev share and don't pay their players at all directly. The "legitimate NIL" is paid by third parties to the athletes for compensation for supposed use of name image and likeness. Some schools have collectives that do this, others do not and individuals or companies end up doing deals on their own. all the legit NIL is supposed to be checked and approved by the NCAA clearinghouse but enforcement right now is pretty minimal.

[u/Successful_Tennis567 → u/frickfrack1]

So if a student athlete is at a big FBS school and it's reported that they're getting paid millions, that's most likely coming from the House Revenue Sharing side of things? With additional Legitimate NIL money coming on the side?

I appreciate you breaking it out this way!

[u/frickfrack1 → u/Successful_Tennis567]

the breakdown of what comes from where is really kept confidential as that's personal financial information that the athlete and the schools are not required to disclose. we do know a few exact numbers, like Demond Williams when he tried to leave UW for LSU after signing a contract and got told by his lawyer that he would lose in court if he went forward with it.