Why I Love the Transfer Portal and Name, Image, and Likeness Payments

Football Player

I love them both because they represent the only legal, unregulated, free market in America.  I love them, because they have completely disrupted the power structure in college sports, and truly free markets require disruption to evolve. Overpaid coaches are no longer the only ones able to participate in the free market of college sports.  Now the people who make the product itself have a stake in it as well.

Despite the seismic shifts these two things have changed in the optics and discussion around college football, nothing will change from the viewer’s perspective.  The top programs will remain the top programs.  The bottom of the bunch will still scavenge for wins.  Neither the Portal nor NIL will fundamentally change the power structure in college football, and the game itself, aside from minor rules changes year-to-year, will remain the same.

The primary reason that nothing will change from the viewer’s perspective is the correlation between revenue and rank1.  Teams who reliably rank in the Top 25 also have the highest grossing programs.  There will always be outliers.  Nebraska, Iowa, and Arkansas all bring in top 25 money2 but fall outside of the top 25 more often than not.

While I can’t find a source to corroborate this, I’m going to go out on a limb and say that there is a high degree of correlation between the gross revenue of a program and the gross revenue generated by boosters for that program. These same boosters who would have donated to new locker rooms, stadium expansions, and coaches’ salaries are donating the NIL money now required to recruit and retain players.  They are creating the foundation that further cements the historic power structure of college football.

First, I’ll tackle the transfer portal. Kids should have always been allowed to transfer without needing to a sit out a year.  If we consider student-athletes to be students first, they should always have had the option to pursue their education elsewhere and play their chosen sport when they arrived on campus.  They shouldn’t have had to ask permission from a coach or appeal to a fickle governing body like the NCAA to do so. I don’t mean in-season transfers, just post-season transfers.

Even before NIL, the media and popular narrative around a kid’s requesting a transfer fixated on just a few reasons, all negative: lack of commitment, microwave generation, etc.  None of them considered some justifiable, alternative explanations:

  • Bad Coaching: Like managers, coaches aren’t all good. Some are better recruiters than they are teachers or leaders. Some programs may have great head coaches but terrible position coaches that stunt development or worse, undermine a player’s confidence in himself.  Some teams have an entrenched culture that may hinder the growth and development of a player’s character or skills.  We see evidence of this in all organizations from corporations to families themselves.
  • Homesickness: Sometimes it is in the best interest of the player to be closer to home. California is a long way from Mississippi both geographically and culturally.  Can you blame a kid for wanting to leave either place for more familiar settings?
  • Off-Field Conduct: Players can fall in with friends who may lead them astray off the field. If you’re a parent discovering that your kid has gone from a buttoned-up young man to a hooligan, wouldn’t you want them playing elsewhere?
  • The depth chart: We seem to overlook the fact that football careers are short. A third-string quarterback who started playing football at the age of five and who has worked his entire life to achieve scholarship-level, D1 play still has just four more years to play. I cannot blame a player for wanting to see the field as a starter for a few more years, knowing it may be their final chance to play the game they love.  I also can’t blame a kid for believing in themselves enough to think that if they can start, if they can just broadcast their talent to a television audience, they will have the opportunity to prove that they can make a career in football at the professional level.

We rightfully herald the player who sticks with a program.  We value loyalty.  We hold these players as examples of why kids should stick around in a program, continuing to progress within that system and ultimately win the starting job. This is reasonable, but just one way to look at it.  I see no reason that the justifications for transferring mentioned above are any less valid.

Name, Image, and Likeness – NIL

NIL didn’t start with football. NIL began with basketball, specifically the revenue generated by EA Sports NCAA Basketball ’093.  In this case, O’Bannon rightfully argued that EA Sports had used a nameless facsimile of him in the game, generating millions in revenue from that facsimile without his consent and without just compensation.  I agree with the ruling the US Supreme Court handed down, particularly in this instance.  This ruling opened the door to what NIL has become.

As Americans, we generally hold capitalism up as the cultural gold standard. It is a core tenant of our society, one stating that our value to an organization and society at large should be determined by a free market – that the value of our contribution (or any product really) should be “what the market will bear.” Ask for more than we are worth, and we will find ourselves as an unattractive candidate.  Ask for less that we are worth, and we are short-changing ourselves by undervaluing our contribution.

Since NIL currently has no meaningful regulation says to me that we have created one of the only legal free markets in America.  We see what college football means to us in monetary terms, and we are beginning to find out what an individual means to the overall contribution of a team’s success.

As capitalists, isn’t this an ideal situation?  No government regulation.  No regulation by an NCAA that makes arbitrary, often unpredictable decisions.  Just a market governed by the monetary resources each organization has at its disposal, spent how it sees fit on the players and coaches that will allow it to succeed.

I believe that all of this could have been avoided by paying players from revenue generated by the sports themselves.  A tiered system put in place that fairly compensated players may have prevented this whole thing.  NIL should also have been part of that deal with regulations around what comprised NIL itself; for example, players could only be paid for certain activities or by the broader use of their likeness in things like video games.  This isn’t much different than the royalty model by which entertainers are paid. As NCAA Basketball ’09 gives way to ’10, the royalties paid to graduating players would diminish.  Invitations to sign memorabilia at a local shop would likewise diminish for former players and ultimately be reserved for those who made the most meaningful contribution during their brief stint at the university.

This idea met with resistance due to the liabilities the universities wanted to avoid – healthcare benefits, Title IX considerations, and organizational greed (if we are being honest).  The University of Texas didn’t want to part with a nickel of its $150M in football revenues for the sake of the players who earned it for them. That’s nothing if not greed on the part of Texas.

So here we are with both: a system that allows universities the option of luring players to their program with the promise of compensation and a system that can no longer limit their freedom to pursue those opportunities at another school.

The change has been uncomfortable for fans.  But why?

I hear objections like, how does a locker room survive the imbalance of pay for a QB versus a lineman?  I reply that a quarterback is inherently more valuable to a team’s success than a single lineman.  I also reply that imbalances exist in all free markets where the perceived value of one thing is higher than the perceived valued of another.  We have decided that certain positions within any corporation are inherently more valuable than others.  CEO’s and managers are paid more than factory workers even though a corporation would grind to a halt without factory workers. There is scarcity at those positions, and scarcity leads to higher pay.

I’ve also heard an argument that young people making millions can’t be trusted with those sums of money. I’d reply that most adults are also poor money managers regardless of their level of compensation. Should we stop paying older employees for their work because we dislike how they spend it?  It seems to go unacknowledged that most players are adults by definition.

Some form of regulation is likely to come, but it will be wonky and onerous.  There is no way to regulate a free market fairly; someone always gets short shrift.

I’d suggest that we do this instead: Enjoy the game and cheer for your team, regardless of how the players arrived on campus or whether each one remained for three or four years. Let the whole thing play out and become what it will be.  It will.  The market decided the direction college sports would go, and it will continue to decide what’s valuable and what’s not. The structure will continue to evolve and change even if the 100 by 531/3-yard field full of 22 players and the obolid sphere they’re playing with does not.

  1. “This chart shows which college football teams have the most success per dollar.” Ross Benes.  March 24, 2016.    This chart shows which college football teams have the most success per dollar – SBNation.com
  2. “Ranking college football’s richest, poorest programs.” Brad Crawford.  December 29, 2020.    Ranking college football’s richest, poorest programs (247sports.com)
  3. “O’Bannon vs NCAA.”  https://en.wikipedia.org/wiki/O%27Bannon_v._NCAA