How NIL has taken over the transfer portal

By: Caroline Conner
Walter M. Williams High School
Burlington, NC

“The first question out of their mouth is ‘How much money am I going to get?’,” Todd Berry, executive director of the American Football Coaches Association in Texas, told CBS News.

He was describing the new reality coaches are facing when recruiting college athletes. With the creation of Name, Image and Likeness (NIL), student athletes have the opportunity to profit off of their profile and performance. Many are receiving direct payments from established donor collectives at their respective university, while also partnering with different local and national brands. These opportunities have become what most coaches consider the most important aspect of recruiting and acquiring players in the transfer portal. A Big East basketball coach told On3, a network that primarily covers high school and college athlete recruitment, that “NIL is the single biggest factor in the criteria prospects now use to pick a college. Playing time, style of play, conference affiliation are now clearly second tier criteria.”

Athletic departments are shifting their financial approach to focus on this new aspect of recruiting and roster construction. “It’s part of everything we’re doing in the department. It’s just a new way of operating that everybody’s trying to get used to,” said Kris Pierce, Chief Operating Officer for the University of South Florida’s athletic department. She shared that USF has created a new NIL strategy unit that is responsible for finding NIL deals for their athletes and creating a strategy for revenue sharing across different sports. This is a model used by hundreds of athletic departments across the country due to the growing importance of NIL to athletic success.

“Five years ago, I wasn’t in conversation saying, ‘How much do you want to be paid?’ I never thought that would happen in college basketball,” Steve Alford, the head coach of Nevada men’s basketball, told Nevada Sports Net.

“NIL plays a huge role in transfer portal recruiting,” an SEC coach told On3. “Unfortunately, too much in my opinion.” An ACC coach added, “You cannot have enough money to compete in the portal.”

Many, including former Alabama head coach Nick Saban, believe this new era of NIL is putting schools at a competitive disadvantage and they are highlighting the need for rules that establish a level playing field. Saban told “NIL Daily” on Sports Illustrated that, “It [NIL] has to be done in a way where you have some kind of competitive balance. Every school must have the same thing. One school can’t spend $30 million for players while another school is spending $3 million.”

In an attempt to provide a solution to this issue, the House v. NCAA case settlement was approved in June. This landmark agreement changed college sports forever. It allows for schools to directly pay athletes for the first time in history. This new revenue sharing model, according to The Athletic, allows athletic departments to “distribute roughly $20.5 million in name, image and likeness (NIL) revenue to athletes over the 2025-26 season.”

Previously athletes could only receive NIL compensation via outside organizations, such as local businesses, large brands like Nike or school donor collectives. The new House settlement also places a limit on team roster sizes, which has forced schools to adjust their scholarship distribution approach.

“We’ve already adjusted our scholarship limits for our sports going into the 25-26 year.” She added that USF is focused on “implementing it [House settlement] in a way that the student athletes are benefiting from it as they were intended to do so,” Pierce said.

Another aspect of the House settlement that is affecting college coaches and NIL donors alike is the establishment of a new NIL rule enforcement committee, known as the “College Sports Commission.” This entity is responsible for reviewing all NIL deals worth over $600 and determining whether they are “for a valid business purpose and reflect fair market value,” according to The Athletic. Many coaches seem optimistic and grateful for the creation of this committee, as it will aim to thwart any attempts to overcompensate athletes for minimal to no contribution to NIL providers.

Washington Huskies athletic director Pat Chun told Sports Illustrated, “We all recognize that nobody wants to exist in an unregulated, unsustainable environment. Relative to enforcement, I’m probably optimistic because, knowing what’s been done in the past, this is backed by a court-approved settlement.”

According to Yahoo Sports, some schools had been “hurriedly signing current players and transfers to new contracts before the approval of the settlement in deals that frontload a majority of the compensation.” The rush was driven by the fact that any contracts signed before the settlement approval and paid out before July 1 were not subject to the clearinghouse (College Sports Commission) or cap.

For many fans, the biggest impact of NIL is its tendency to result in players transferring. Logically, if a different school offers a player more NIL money or resources, they are likely to transfer. Kris Pierce, a UNC Chapel Hill alumna, says, “I think I grew up in a golden era of college athletics. Being a Tar Heel, I know the value of folks staying around four years.”

Before the addition of NIL and the era of paying athletes, most players stayed at their respective schools for the duration of their college careers. This began to change in 2021, following the COVID-19 pandemic, when the NCAA granted every active student athlete one penalty-free transfer. With the introduction of NIL in 2021 as well, the floodgates were opened, sending a wave of student athletes into the transfer portal. These waves have continued to grow over the last four years with the increase in financial support of NIL.

That begs the question: will college athletics ever return to its “golden era” that so many miss? Only time will tell. For now, the introduction of the College Sports Commission and NIL spending cap, in an effort to control the transfer portal, is a step in that direction.