Inside Lone Star NIL, the first state-specific NIL marketplace

ALLEN, Texas – Tom Burnett, the former longtime Southland Conference commissioner, sat inside a North Texas cafe on Wednesday, looked around and called it the exact type of company that his new project could help enter the NIL marketplace to assist student-athletes.

Nearly two years into the NIL era, Burnett plans to tap into this ever-evolving space – one he believes is ripe for innovation – with Lone Star NIL, a first-of-its-kind program that focuses on endorsement deals in college athletics at a state level. It’s connecting Texas athletes with Texas businesses.

The first 23 months of the NIL age have been dominated by the proliferation of school-specific collectives, entities with varying ambitions and resources that connect student-athletes with an array of NIL opportunities. Now Burnett is introducing the nation’s first state-specific NIL marketplace. Lone Star NIL, which is owned by his Frisco, Texas-based athletics consulting agency Southwest Sports Partners, possesses some qualities of donor-driven collectives, but also has some inherent differences.

It begs the question: Is the NIL ecosystem big enough for a state-specific program? With collectives emerging, and in some cases thriving, at an increasing number of schools, including the Group of 5 level, why is this needed?

What does Lone Star NIL bring to the table?

Burnett offered three primary reasons. But he first stressed that the narrative about deep-pocketed boosters fueling high-octane collectives at schools such as the University of Texas and Texas A&M, for instance, are the exceptions to what is occurring elsewhere statewide. 

“Most Texas student-athletes are very underserved in this [NIL] area,” he said during an hour-long interview with On3. “They’re all well aware of it [NIL], they’re interested in it, but for whatever reason, whether a school hasn’t been able to put that collective together for them or they’re at a school that maybe never had the means to do it, they’re missing out on something. 

“Somewhat parallel with this is that you’ve got people, parents, students, coaches, others interested in athletics that are just insufficiently educated [on NIL]. They hear about it. They don’t know what it is. And I also see a very robust Texas business community sitting on the sidelines. This business community, which is blowing up, just doing wonderful things and growing exponentially, but not really as engaged with this.”

This Lone Star NIL program is notable because eligibility is dependent on student-athletes earning a high school diploma in the state of Texas and participating in college sports in the state as well. He likened it to an in-state scholarship program. 

It falls in line with the most recent consequential trend in the NIL space: an increasing number of states finding ways to give in-state athletes and schools competitive and financial advantages, ranging from marginal to significant. States nationwide, most notably Arkansas, Colorado, Missouri, Montana, New York, Oklahoma and Texas, have recently passed or are considering reform squarely aimed at bypassing NCAA NIL oversight and/or enacting laws that benefit in-state athletes who traffic in the NIL space.

Program could help with roster retention

The NIL world is often a copycat arena. But this may not follow that script. As Burnett noted, Texas is uniquely positioned to see this type of program gain traction, given the spectrum of 116 institutions of higher learning, the unbridled passion of fans, and a wide swath of both large and mom-and-pop companies border-to-border. Some states may check those boxes – California, Florida, the SEC footprint – but certainly not all, or even most.

This opportunity could take many different forms for athletes.

For instance, envision a women’s basketball player who graduates from Melissa High School in Melissa, Texas, and then plays college hoops at Sam Houston State. She is the pride of Melissa, a community of 17,000-plus that is expanding faster than one can read this sentence. Any company, ranging from the popular gas station Buc-ee’s (now in Melissa) to a local mom-and-pop taqueria may be interested in working with her on an NIL deal. Additionally, Burnett said, group NIL deals may in some cases work well for some companies.  

Burnett acknowledged that Lone Star NIL may be unlikely to markedly impact recruiting decisions. But he said it could potentially play a role on the retention front, as colleges coaches now find themselves needing to re-recruit their rosters each year. Lone Star NIL could be another factor to tip the scales, even marginally, to dissuade in-state athletes from stepping foot into the transfer portal. 

“That’s where I think NIL, whether it’s at the campus level or something like this, more directly with corporations, can aid in that because there’s no question young people are looking at transfer options,” Burnett said. “Because they’re hearing about a definitive NIL deal and think there’s a great deal for them, they shop that around. Some of that gets to that area of it’s not supposed to be that way, and they’re not supposed to do this. That’s what’s happening. You can’t deny that.”

Trying to engage Texas businesses

The idea started percolating in Burnett’s mind last fall. What kept him up at night was that NIL has been largely transactional – obviously, that’s the crux of the deal – but he wasn’t seeing a whole lot beyond that quid pro quo. 

He wanted to help spearhead NIL opportunities that also offer more of a long-term benefit: Can we incorporate more community service, charitable opportunities and professional development offerings?  For larger corporations, could they formalize elements on the professional development front, include internship possibilities and athletes in community service endeavors to make it a more well-rounded experience?

Burnett initially envisioned this program unfolding within the confines of a few North Dallas communities – Plano, Frisco, Allen and McKinney – all flush with talented athletes who go on to compete collegiately throughout Texas and a flourishing corporate presence (emerging especially in Frisco). Then the idea ballooned considerably to a statewide focus, expanding boundaries all the way to El Paso and throughout the vast state.

“They have to be from Texas high schools, live here in the state; they have to enroll at a Texas university; and then you tie all that back into the Texas business community,” Burnett said. “So, that was the special hook that we thought differentiated it from just being another type of collective or marketplace … I’m not looking to go after their [colleges’] boosters. It’s more of, how do we go directly to a corporate community? I don’t see the Texas corporate community as engaged as I think they can be.”

‘We’re in the matchmaking business’

Lone Star NIL does not intend to target boosters of specific schools. But if they get approached by a school’s booster, they’d probably take the phone call to see if they’re interested in a statewide program, being involved either as an individual or a leader of a company. 

From an operational standpoint, Lone Star NIL will include two key areas of focus: business development and student-athlete engagement. They intend to be particularly engaged with statewide high school coaches and athletic directors, so they are aware of the program and can report back to rising juniors and seniors about details. 

On the business side, they are looking to spread the word with various business associations, the Texas Association of Business, the Texas Economic Development Corporation as well as business consultants and chambers of Commerce in different locales. Texas is now home to the most Fortune 500 companies (55), surpassing New York and California. This would tap into that pool of large companies as well as the mom-and-pop T-shirt store and burger joints.

“We bring all that together,” Burnett said. “Here’s our potential student-athlete group. Here are our potential businesses. Here’s what they’re looking for. Here’s what this group is looking for. We’re in the matchmaking business.”

The program may be ideally suited for Texas-raised student-athletes at in-state so-called mid-major schools – North Texas, for instance – which may not have the underpinning and support of powerful school-affiliated collectives. But Burnett said there is no shortage of interest from student-athletes across various levels. In fact, as a trial balloon, Burnett said they have engaged with some Power 5 athletes, all of whom responded that they would be interested in learning more about Lone Star NIL. 

‘Work begins now’ for Lone Star NIL

Burnett doesn’t envision Lone Star NIL necessarily competing against established collectives. Rather, he envisions it perhaps enhancing opportunities, providing athletes with NIL potential outside campus collectives that are not tied to where they are enrolled.

Burnett’s advisory group includes what he described as “well-rounded administrators” (he declined to name them) who have expertise in the compliant space, the corporate sales spaces and who have served on various NCAA committees in the past. He is also bringing in industry experts on the business side. 

Lone Star NIL is at the beginning of the journey. Conversations are underway with funding entities and potential technology partners on possible capital investments. The company will likely require significant capital to maintain staffing, office space, technology and other operational expenses.

That business model will come into more focus in the coming months. But on Wednesday night, Burnett hosted a webinar with various athletic directors and staff to provide more clarity on Lone Star NIL. And this weekend, he plans to have a strong presence at the NACDA (National Association of Collegiate Directors of Athletics) convention in Orlando. 

“The work begins now,” Burnett said. “It’s full steam ahead.”