As College Athletes Finally Start Cashing In, Entrepreneurs Big and Small Also Look to Score

Back in 2013 Blake Lawrence, a former University Nebraska linebacker who is co-founder and CEO of a then-fledgling sports technology platform called Opendorse, felt that his breakthrough moment had arrived. The Opendorse app sought to connect professional athletes with sponsorship opportunities that would allow players to monetize their name, image, and likeness rights (NIL). It’s not unlike how, say, Uber connects drivers with riders, or Airbnb matches up hosts and vacationers.

And Opendorse had just agreed to a partnership with the NFL Players’ Association that would introduce these pros to the platform. So Lawrence can recall leaving Washington, D.C.—headquarters of the NFL union—that day, feeling pretty good about himself. “I envisioned that we were just months away from being a $100 million-$1 billion company,” says Lawrence now. “We’re going to take the world by storm.”

“And that is not what happened.”

While Opendorse has experienced some success with professional athletes, Lawrence soon learned that agents still held a firm grip on the pro sponsorship market. Negotiating lucrative, at times complex multi-year agreements required a human touch.

What Opendorse really needed to grow, Lawrence came to realize, was a market in which thousands of digitally-savvy young people—say, college students who play sports—could use the platform to tap into local passions for college athletics, and secure agreements with companies to promote their brands. Opendorse, meanwhile, could take its cut of each deal made on the app.

What Lawrence needed was for the NCAA to finally remove its outdated restrictions prohibiting college athletes from monetizing their NIL rights. That day came on July 1 of this year, giving birth to a multi-million dollar industry pretty much overnight.

“This the moment we’ve been waiting for,” says Lawrence. “The market opportunity is here.”

A College Sports Gold Rush

As the 2021 college football season kicks off this month, marking the first academic year in which student-athletes can earn payments from third parties, Opendorse has plenty of company in this new space. A multitude of startups and platforms are rushing in to grab a share in a college sports sponsorship market. That market, in the estimation of Carnegie Mellon Tepper School of Business professor Tim Derdenger, has already reached at least $100 million, with the potential to grow to $1 billion in five years.

A company called Icon Source, another digital platform connecting athletes and sponsorship opportunities, raised $1.6 million in May to prepare for the loosening of NIL restrictions. Captiv8 Collegiate promises “to educate student-athletes on how to effectively manage their personal social-media brands and partnerships.” There’s Altius Sports Partners and INFLCR and PWRFWD, founded by former college basketball player Luke Bonner, which has set up a site selling merchandise from, among other athletes, UCLA soccer player Mia Fishel. The list goes on.

To date, the larger deals have grabbed headlines and raised eyebrows. Alabama quarterback Bryce Young, for example, has reportedly signed NIL agreements worth more than $800,000; Onyx Authenticated is selling his trading cards; and he also announced a partnership with Cash App. In August, super-agency WME Sports signed LSU gymnast Olivia Dunne, who has 4.3 million TikTok followers and 1.3 million Instagram followers, as its “first NIL athlete.” She could earn up to seven figures in endorsements from the deal.

While the high-end of the market should prove lucrative, experts believe that the pure volume of smaller, more localized deals will sustain the industry. Across America, there are too many towns to count in which college sports are king.

“It’s going to be a long tail of a lot of people,” says University of San Francisco sports economist Dan Rascher, “getting smaller amounts.”

So they’re likely to seek out an app that pinpoints opportunities. The range of NIL deals out there is wide—almost comically so. While Young and Dunne stand to rake in riches, the “Find Gigs” tab at ConnectNIL.com—a website started by Green Bay Packers practice squad tight end and former BYU football player Bronson Kaufusi, which caters to college athletes and businesses in Utah—shows that the Bajio Mexican Grill in Provo is looking for athletes to promote its food on their Instagram stories.

“Compensation: Free Lunch,” reads the listing.

A company called Elektrik, based in Orem, sells high-voltage electronic equipment on its website. “Not sexy at all, right?” says CEO Mario Dealba. To jazz up the company’s marketing, last week Elektrik posted an ad for three athletes to take an hour to film five or six Tik-Tok videos for its LinkedIn page. He’s offering $100—ideal applicants included gymnasts and cheerleaders—”or anyone who can flip”—and football players.

“We don’t have an NFL team,” says Dealba. “So if we get a football player who’s a big name in the Salt Lake City community, and now we’re talking to an electrical contractor who’s a diehard Utah fan, and they see our TikTok with this guy that they love, it might catch their eyes.”

(Dealba wound up hiring four BYU athletes—a gymnast, a cheerleader, a football player and a baseball player—for the gig.)

Brandon Steiner, founder of e-commerce platform Athlete Direct, says he’s finalizing agreements with basketball players from UConn, Washington, Nebraska and Syracuse to sell merchandise on his site.

“To say that I’m excited would be an understatement,” says Steiner, a veteran of the sports collectibles industry who’s worked with stars like Derek Jeter, Mariano Rivera and Sue Bird. “I’m really just licking my chops because the market is wide open.”

He anticipates that working with college athletes, as opposed to millionaire pros, might offer different rewards. “I’ve made millions of dollars for guys and am still waiting for my thank you note,” says Steiner. “If I go make some of these kids $5,000, I’m going to be like on their Christmas list. Definitely inviting me to their fraternity parties.”

Winners and Losers

Tech is littered with early adopters whose business eventually fizzled. So the long-term success of a company like Opendorse is by no means preordained. Still, if any NIL platform could emerge victorious in the race for college sports market share, it’s Opendorse.

“I wouldn’t be surprised at all if they become one of the preeminent players in this space, if not the preeminent player in the space, in the next two to three years,” says Derdenger.

The company closed on $10 million in venture funding in March. Degree Deodorant worked with Opendorse to sign more than a dozen college athletes to deals; Twitter has partnered with Opendorse to facilitate brand advertising on the athlete-created videos posted on Twitter. Even prior to NIL going live on July 1, schools and college athletes were using an Opendorse product that allowed athletes to access photos and videos they could share on their social media.

So many athletes were familiar with the brand, and Opendorse could leverage these existing relationships with schools to sell them products that assist them with NIL compliance and offer data on the market worth of their athletes. Opendorse sells suite a services to schools for anywhere from $5,000 to $50,000—or more—per year. Since July 1, Opendorse says it has added some 50 schools, including heavyweights like Ohio State, Wisconsin and Baylor to its client roster.

“This is the recruiting battle of the next decade for schools,” says Lawrence. “They want to be able to show they are investing heavily in NIL solutions for student-athletes on campus. And so some schools will call us and ask if they can outspend their rivals, in terms of our products.”

So instead of spending revenues on, say, a bigger scoreboard than a cross-state foe, schools may shift those funds to NIL services, to the benefit of college athletes and companies like Opendorse.

For each deal brokered on the site, Opendorse charges companies 10-30% of the value of the agreement (among those brands doing business on Opendorse are EA Sports, Reebok, Velveeta and Central Nebraska Dairy Queen). The average deal size, says Lawrence, has been around $400. Market activity on Opendorse in July, the first month that NIL went live, exceeded that of its entire 2020 calendar year, when only pro athletes could use the platform. Lawrence expects revenues to jump fivefold this year over last year, and exceed $10 million.

“I would say for those that have entered the NIL market in the last year because they’ve seen seen the headlines and interested in trying to take a piece of the pie, this is not easy,” says Lawrence. “It is a new game. It’s the first quarter. We like our game plan. We like our record at this point in time. But we still have to execute. That’s all that’s between us and being a household name when it comes to NIL.”

At long last, a glimpse of economic freedom has arrived in college sports. And for businesses looking to score, it’s game on.