NIL dollars moving from high school recruiting to transfer portal, talent retention

Every market goes through a reset.

The NIL market has surely gone through one in the past 30 months since the NCAA threw together its interim policy in the summer of 2021. What started as an opportunity for athletes to monetize their name, image and likeness has shifted to a pay-for-play model.

While employment has not officially arrived yet, the NCAA is creeping closer and closer toward it. Earlier this week Dartmouth men’s basketball players were deemed employees.

As the so-called NIL Era approaches its third anniversary in four months, multiple trends have emerged and become clear. The common college athlete does not have much value to a brand. Booster-funded NIL collectives make up for more than 90% of the dollars being spent in the space. The high-profile dealings with high school recruits have mostly dissipated, substituted with retaining rosters and attracting talent in the transfer portal.

As one leader in the NIL collective space emphasized to On3 earlier this week, “It is obviously pay-for-play.”

“I think each cycle, the market changes, if that makes sense,” Florida coach Billy Napier said Wednesday in his National Signing Day press conference. “I think we’ve seen an evolution. We’re talking about drastic change every six months since I’ve been the coach here if that makes sense. It took us a little bit of time there to get in position but I don’t know that there’s a number. I think that number grows every six months.”

Winning today comes from NIL success in transfer portal

The top-funded NIL collectives are spending upwards of $10 million annually on payroll for their roster. Surely, dollars are siphoned off to attract the top high school talent in the nation. Yet, signing a contract with a top-ranked high school quarterback is not comparable to landing a game-changing EDGE in the portal who can vault a team into top-25 status. And there was plenty of passing talent this year in the portal, with more than 140 scholarship quarterbacks.

With more TV money entering the college football landscape, revenue sharing is more likely than ever. The Big Ten and SEC announced the formation of a joint advisory group last week, a sign of conferences taking control of their futures.

Until college sports arrives at the moment – which now only feels months away – NIL collectives run the day-to-day operations of paying the talent. In the early days of the era, collectives were raising funds to spend on top recruits. None were more eye-catching than Tennessee signing quarterback recruit Nico Iamaleava to a deal that could see him make $8 million over four years, according to The Athletic. Iamaleava is now on Rocky Top, expected to start for the 2024 season for the Volunteers.

The Tennessee spectacle proved to be the NIL spark that caused donor bases across the country to form collectives. But now almost two years since news broke about the financial package, collectives have turned their focus to the transfer portal – college football’s version of free agency.

“What I feel like, it’s kind of been a shift from – at first it was the recruiting front because the incoming guys caught the first wave,” an SEC player personnel staffer told On3. “They were the ones to be able to capitalize on the era when everyone was trying to figure out what was going on. It seems to me there’s been a shift from the early stage to the retain portion. More people are seeing it’s about maintaining your roster and keeping your guys another year, rather than the young fellas who aren’t a proven commodity.”

Wednesday’s National Signing Day once served as college football’s holiday, as prospects announced commitments and made stunning flips. Those days are clearly in the past as nearly every top recruit signed their National Letter of Intent in December during the 72-hour “early” signing period.

In today’s arena when the going motto is “What have you done for me lately,” it makes more sense for coaches and their collectives to deploy dollars in the transfer portal.

Transfer portal success vital until something changes

Colorado, Louisville and Ole Miss sit in the top three of On3’s transfer portal rankings for a reason. Deion Sanders, Jeff Brohm and Lane Kiffin know their programs aren’t always going to win the five-star recruiting battles. Spending in the portal to get elite athletes who make an instant impact is a smart economic decision.

This year’s College Football Playoff field had plenty of portal success stories. A Michigan defensive line filled with portal diamonds. A star quarterback at Washington who arrived in Seattle after four seasons at Indiana.

Until the NCAA arrives at what comes next, putting together a war chest and keeping top talent on rosters while winning in the transfer portal will remain one of the most popular ways of constructing rosters. NCAA enforcement doesn’t appear to be slowing anyone down despite multiple investigations but does it truly have teeth anymore? High school recruits chomp at the bit to sign with schools in December because they know roster sports could be gone because of the transfer portal.

“Kind of the law of unintended consequences, because of the portal, coaches now aren’t as dependent on high school recruiting,” said an SEC collective operator.

“In my opinion, and I’ve heard other coaches, including our own coaches, talk about it: You don’t have to roll the dice as much on a high school kid that’s unproven when you can go out, scan the country for a true freshman that either started or played a lot of snaps, has proven that he’s a good player, he can play at that level.”