NIL Deals

How Are NIL Valuations Calculated?

The landscape of college sports is still undergoing a monumental transformation. College athletes are now allowed to monetize their Name, Image, and Likeness (NIL), ushering in a completely new dynamic that offers both opportunities and challenges for athletes, universities, and businesses alike. With this alongside the transfer portal, college football is really at a crossroads with even more change on the horizon.

NIL has rapidly grown into a billion-dollar industry, creating a significant impact on college sports. This has resulted in a societal shift that has driven changes in legislation, sparked lucrative contracts for star athletes, and led to an increased focus on athletes maximizing their valuation while attending school.

Now while I was at work, I thought to myself, “does anyone know how these NIL valuations are calculated?”

Understanding NIL valuation is crucial for college athletes, as it helps them gauge their worth in the marketplace and negotiate better deals. Equally, businesses can use these valuations to identify suitable college sports influencers for their brand within their budget range. In some unfortunate cases, these brands take advantage of these young athletes. 

The Significance of NIL Valuation

As stated earlier, NIL valuation is a process that estimates the worth of a college athlete’s Name, Image, and Likeness at a given point in time. This valuation carries immense importance for both athletes and businesses:

  • For Athletes – NIL valuation helps athletes understand their worth in the NIL marketplace. It provides them with a basis to negotiate brand deals, endorsements, and sponsorships, enabling them to maximize their earning potential. For some, this is a tremendous opportunity for real world experience if they decide not to or are unable to go pro. 
  • For Businesses – For brands and companies, NIL valuations serve as useful metrics in their search for the right college sports influencer. This allows them to make informed decisions about potential partnerships and collaborations. I mean, you gotta do some due diligence before handing 18-year-olds fat paychecks.

The industry has seen a significant surge with the advent of the NIL era, and with it, a newfound need for understanding valuation. This can be on both sides of the playing field. For businesses, NIL campaigns that didn’t have significant Return on Investment. On the other side, maybe partnering with a brand that is the best from a publicist stand point, is actually hurting the athletes earning potential in the long run. So many various factors come into play, especially for not the top tier cash cow athletes who are raking in cash. 

The ground-breaking 2021 ruling that lifted restrictions on college athletes profiting from their NIL has made NIL valuation real, rather than us fans speculating how much money a player makes their school like we did when Reggie Bush was at USC. It has opened the floodgates and I think this concept is only scratching the surface of what is to come. 

Decoding NIL Value: Key Concepts and Metrics

The valuation of a college athlete’s NIL isn’t a simple task. It varies significantly depending on a myriad of factors. Some of the primary considerations include:

  • Athletic Performance and Position – An athlete’s performance in their sport and their position in the team can significantly affect their NIL valuation. Exceptional athletic achievements often correspond to higher valuations.
  • Social Media Presence – The size and engagement level of an athlete’s social media following play a crucial role in determining their NIL value. A larger online following can boost an athlete’s NIL valuation, irrespective of their athletic performance.
  • Media Perception – Media sentiments surrounding an athlete can influence their NIL valuation. Positive attention from major media publications can lead to a higher valuation.
  • University Ranking – The prestige of a college can also impact an athlete’s NIL value. Athletes from top-ranked colleges often command higher NIL deals.
  • Family Legacy – Athletes with famous sports family members can see a boost in their NIL value. A notable example is Bronny James, son of Lebron James, who boasts one of the highest NIL valuations, and was in a car commercial before he even stepped foot on USC’s campus. Shedeur Sanders, the son of Deion Sanders, is second among the highest NIL Valuations.
  • Notable Achievements – Winning prestigious awards, such as the Heisman Trophy, can lead to an increase in an athlete’s NIL valuation. You can see why USC’s Caleb Williams is in the Top 5.
  • Previous NIL Opportunities – An athlete’s past NIL deals can influence their future valuations. For example, a history of landing lucrative contracts and executing them properly can increase an athlete’s NIL value.

The Calculation of NIL Valuations

NIL valuations are calculated using proprietary algorithms that consider the factors mentioned above. One of the leading algorithms in the industry is On3 NIL Valuation Index.

This index calculates an athlete’s brand and roster value using dynamic data points targeting three primary categories: Performance, Influence, and Exposure. It then combines these values to generate the athlete’s total NIL valuation.

Performance is determined by the athlete’s achievements in their sport, influence is gauged by their social media authority, and exposure is evaluated based on factors like the athlete’s school and position.

NIL Valuation in Sports Marketing

NIL valuation has found wide applications in sports marketing. Here are some of the common ways athletes can monetize their NIL:

  • Brand Endorsement Deals – High-profile athletes can enter into lucrative brand endorsement deals, helping brands promote their products and services.
  • Public Appearances – Athletes can earn money by making public appearances at events, thereby increasing their publicity and coverage.
  • Sale of Autographs and Apparel – Athletes can earn additional income by signing autographs or selling merchandise featuring their personal branding.
  • Coaching – Thanks to the new NIL rules, college athletes can now earn money by coaching others in their sport or promoting sports camps.
  • Business Ventures – Entrepreneurial athletes can start their own businesses and leverage their NIL to market them.

Navigating NIL Deals: Effective Strategies

To fully capitalize on NIL deals during their college career, athletes can employ several strategies to maximize their marketability and profitability:

  • Engage the Services of a Skilled Sports Attorney – Navigating the NIL landscape can be daunting. A seasoned sports attorney can help athletes negotiate better deals and ensure compliance with all relevant laws and regulations.
  • Accept Only Quid Pro Quo Deals – Athletes should only accept deals that require them to provide some service in return for their NIL compensation.
  • Prioritize Future Opportunities – Athletes should avoid locking themselves into lengthy NIL contracts that could potentially interfere with more lucrative opportunities down the line.
  • Align Deals with Personal Brand – Athletes should select deals that align with their long-term values and personal brand.
  • Balance NIL Endeavors with Athletic Performance and Education – While NIL deals offer numerous benefits, they should not overshadow an athlete’s academic or athletic performance.

Harnessing the Power of Video Content

On top of being a student, an athlete, and now a marketer, these kids have to learn how to do such effectively. Social media content creation, particularly video content, is one of the easiest ways for athletes to earn money from their NIL. Platforms like Adobe, Canva, Curastory and many other media tools can help athletes optimize their NIL earnings by assisting in the production, editing, and distribution of their videos and matching them with suitable brand partners.

The Future of NIL Valuation

The NIL era has signaled a paradigm shift in the world of college sports. The ability for athletes to monetize their NIL has created a massive industry that continues to evolve. Understanding NIL valuation is critical in this new landscape, for coaches, recruiters and boosters as by now allowing athletes to leverage their brand, it has to be part of the message of bringing these kids to schools. 

As the NIL industry continues to mature and expand, it will be interesting to see how the valuation process evolves, who takes advantage of it and how it impacts the future of college sports.


  1. Sports Illustrated Article
  2. Action Network Article
  3. Front Office Sports Article
  4. CNBC Article
  5. OutKick Article
  6. On3 NIL Valuation
  7. On3 Top 10 NIL Valuations
  8. Forbes Article
  9. On3 Article
  10. The Detroit News Article
  11. The Washington Post Article
  12. On3 NIL Article
  13. NewsWire Article

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