NIL Is Bad: How the Current System Is Failing College Sports

Editor’s Note (June 2026): This article was first published in May 2025. Since then, NIL controversies have only grown—lawsuits over transfers, new collective rules, and court rulings are fueling even more debate. The problems outlined below remain at the heart of the chaos.

TL;DR: The concept of allowing college athletes to profit from their name, image, and likeness is fundamentally sound. The implementation, however, has been disastrous. From unregulated collectives functioning as slush funds to exploitation of athletes, widening competitive gaps, and the erosion of what makes college sports special, the current NIL system is failing. Student-athletes absolutely deserve compensation, but this unregulated, Wild West approach isn’t the answer. We need thoughtful reform that balances athlete rights with the educational mission and competitive balance that have made college sports so compelling for generations.

For the case in favor, read our argument that NIL is good. For both sides weighed together, start with our NIL pros and cons.

When the NCAA implemented its interim policy on Name, Image, and Likeness (NIL) in July 2021, it was heralded as a long-overdue victory for student-athletes. Finally, college athletes could monetize their personal brands while maintaining eligibility. But three years in, the reality of NIL has exposed deep, structural problems that threaten the very foundation of college sports.

Far from the fair, equitable system its proponents envisioned, NIL has morphed into a thinly veiled pay-for-play scheme dominated by wealthy donors, corporate interests, and an increasingly professionalized amateur sports landscape that’s leaving many athletes and institutions behind.

NIL Is Bad in Its Current Form, But the Concept Isn’t

Let’s be clear: this doesn’t mean NIL is all bad. The core principle—that athletes deserve compensation for the use of their name, image, and likeness—remains valid and important. Student-athletes absolutely deserve to get paid. But this implementation ain’t it.

The problem is the execution. NIL went from zero to 200 MPH overnight with no guardrails. It’s like giving someone a supercar capable of high speeds and letting them drive it through downtown at rush hour. Just because a car can go that fast doesn’t mean it should outside a sanctioned, governed NASCAR race. Similarly, NIL needed careful implementation with proper rules and oversight—not the free-for-all we’re currently witnessing.

Creating the Collective Problem: Pay-for-Play in Disguise

The most troubling development in the NIL era has been the rise of “collectives” – donor-organized groups that pool money to facilitate NIL deals for athletes at specific schools. These collectives have quickly evolved from their original purpose into recruitment vehicles that effectively function as booster-funded payrolls.

College football’s biggest donors have orchestrated business ventures distributing five-, six-, and seven-figure payments to athletes under the guise of endorsement opportunities and appearance fees. While technically legal within vague NCAA guidelines, these arrangements clearly violate the spirit of what NIL was supposed to be.

Consider the case of quarterback Nico Iamaleava, whose story perfectly illustrates the chaos. After signing with Tennessee on a lucrative NIL deal, he later tried to renegotiate his contract during the 2025 offseason. When Tennessee refused both because his performance didn’t warrant the increase and the amount was too high, Iamaleava explored other options. After other schools balked at his demands, he eventually landed at UCLA for significantly less than he had sought. Meanwhile, Texas will spend an astounding $40 million on its football roster in 2025-26. But that’s not the issue—why wouldn’t they if they can? The problem is that if another team wants to compete, there’s only one way forward: pay up.

This isn’t about athletes receiving fair compensation for actual marketing value – it’s about wealthy boosters creating slush funds to buy talent. And as long as deals include some nominal “deliverable” from the athlete and are signed after their national letter of intent, there’s little the NCAA can do to stop it. For the full picture, including the upside this piece pushes against, see our breakdown of NIL’s pros and cons.

Boosting Egos Instead of Programs

A particularly troubling aspect that’s emerged is how NIL has become an ego-driven playground for wealthy boosters. For many donors, it’s no longer about supporting their alma mater—it’s about directly influencing outcomes and claiming credit for wins.

These boosters are essentially treating college teams like fantasy sports with real money. They get a dopamine hit from watching “their” players succeed, knowing their financial contribution made it possible. It’s an addiction—the thrill of buying talent and then basking in reflected glory when that talent performs well.

This creates a dangerous dynamic where the interests of boosters, rather than educational or developmental goals, drive decisions. Coaches find themselves answering not just to athletic directors but also to the whims of deep-pocketed collectives that can control the talent pipeline.

Widening the Gap: Competitive Balance Destroyed

NIL has exacerbated inequality in college sports. Large programs with wealthy donor bases and extensive alumni networks can facilitate multimillion-dollar NIL opportunities that smaller schools simply cannot match. This creates a system where Power 4 conference schools with established donor networks can outbid smaller schools for top talent, wealthy institutions in major markets have inherent advantages, programs without established collectives struggle to compete, and regional disparities widen as schools in wealthier areas secure more NIL resources.

Schools with smaller athletic programs may not have the means to facilitate lucrative NIL deals, altering the competitive balance, notes a report from American Public University. This undermines the core appeal of college sports – the possibility that any team can rise up through good coaching and player development to compete at the highest level.

How will smaller schools ever compete in this environment? When Alabama, Texas, or Ohio State can offer seven-figure NIL packages to high school recruits, what chance does a Mountain West or Sun Belt program have? Even within power conferences, schools in smaller markets or with less passionate donor bases fall further behind.

As NIL becomes the primary factor in recruiting, we’re witnessing the creation of a de facto professional league in which the wealthiest programs hoard elite talent, while smaller institutions are left to fight over the remaining prospects. Is this really what we want college sports to become?

Transfer Portal Chaos: The Free Agency Problem

The combination of NIL with the NCAA’s transfer portal has created a virtual free agency system in college sports. Athletes can now enter the portal, field NIL offers from various schools’ collectives, and choose the highest bidder.

TCU head football coach Gary Patterson lamented that he risks losing 25 to 30 players per year due to NIL-related transfers. This isn’t hypothetical – it’s happening across college athletics: star players leave smaller programs for bigger NIL opportunities, coaches cannot build programs knowing players may be bought away, team cohesion suffers as players pursue individual financial gain, and smaller schools become de facto farm systems for wealthier programs.

A 2022 survey found that 90% of athletic directors expressed concern about NIL, believing an unregulated NIL market, coupled with transfer rule changes, would lead to more scandals and unfair recruiting tactics. That prediction has proven accurate, as players increasingly make decisions based on financial incentives rather than educational or developmental considerations.

Athletes Making Short-Term Decisions

Perhaps one of the most concerning trends is how NIL is pushing young athletes to prioritize immediate financial gain over long-term development. While it’s entirely understandable that a college student might choose the highest paying option—especially those from disadvantaged backgrounds—this short-term focus often works against their best interests.

A player might choose a school offering a large NIL package over one with better coaching, development resources, or playing time opportunities. This decision could ultimately harm their professional prospects and earning potential.

What’s worse, many athletes aren’t even receiving the money they were promised. There have been numerous reports of collectives failing to fulfill their financial commitments or inserting predatory clauses into contracts. Young athletes without proper representation find themselves with the short end of the stick, lured by promises that never materialize.

The healthiest approach would balance immediate compensation with long-term development, but the current system encourages chasing the biggest check now, regardless of future consequences.

NIL Is Bad for the Athlete-Fan Relationship

NIL has fundamentally altered how fans view and interact with college athletes. As players increasingly become paid performers rather than student representatives, fans believe they have the right to treat them like professional athletes—including harsh criticism and social media verbal attacks.

“You took the money, now perform” has become the mentality. When a highly compensated player underperforms, they face vicious online harassment from fans who feel entitled to results based on the athlete’s NIL earnings. This toxic environment has mental health implications for young athletes who aren’t emotionally equipped to handle such scrutiny.

The irony is painful—NIL was supposed to empower athletes, but it’s also subjected them to a new level of public criticism and unreasonable expectations from fans who now view them as paid employees rather than students.

Corruption and Exploitation: The Dark Side of NIL

NIL has opened the door to exploitation of athletes – particularly those without proper guidance. Bloomberg Law reported that college athletes have been hit with a wave of questionable business deals, disreputable agents, and outright scams since NIL began.

In one case, a Texas apparel company proposed retaining at least 40% of revenue from merchandise sales under a contract offered to college football players. The same contract included language that would lock in that percentage for all future deals, effectively turning the company into an agent charging exorbitant commissions.

Ellen Zavian, a professional sports agent and attorney, criticized the lack of oversight for NIL agents: Professional football agents must register with the player’s association, pass a legal examination, and cap their commissions at 3%. By contrast, the most an NIL agent has to do is pay an application fee to the state; there is no limit on their commission rate.

Making matters worse, the NCAA prohibits university staff from offering legal advice to students navigating these offers. Lawyers have seen students marooned in bad business contracts with overly broad language, unclear performance requirements, or missing termination clauses.

A College Sports’ Identity Crisis Thanks to Name, Image, and Likeness

Perhaps the most significant concern with NIL is how it challenges the fundamental identity of college athletics. The line between amateur and professional sports continues to blur, raising existential questions about what college sports should be.

The original ethos of college athletics centered on education, character development, and the pursuit of athletic excellence as part of a broader educational experience. NIL has shifted this paradigm toward a more transactional model where athletes are increasingly becoming employees in all but name.

This shift isn’t just philosophical – it has practical implications: academic priorities can take a backseat to NIL obligations, team cohesion suffers as individual financial interests diverge, the connection between athletes and their institutions weakens, and the public perception of college sports changes from amateur competition to minor league professional sports.

When players are choosing schools based on financial offers from collectives rather than education, coaching, or program fit, we’ve fundamentally altered what college sports represent.

International Student-Athletes

One overlooked consequence of NIL is its impact on international student-athletes. Because of visa restrictions, many international students can’t participate in NIL activities without risking their immigration status.

This creates an inherently unfair two-tiered system where American athletes can profit from their name, image, and likeness, while international teammates cannot. Beyond the financial disadvantage, this disparity can cause resentment and division within teams.

Reform Is Possible

Despite these significant concerns, the solution isn’t necessarily to abolish NIL entirely. Athletes do deserve fair compensation for legitimate marketing opportunities. The current system, however, requires substantial reform:

Federal legislation for uniform standards, clear collective and booster regulations, equitable revenue-sharing models, enhanced athlete protection and education, and reasonable compensation caps are needed to fix NIL’s broken system and preserve college sports’ integrity.

This is the case against NIL as it’s currently built. We argue the other side just as seriously. If you think NIL has been good for college sports, read NIL Is Good. For both cases in one place, see NIL Pros and Cons.

SportsEpreneur FAQs

What are the recent legal challenges in Name, Image, Likeness?

Since summer 2025, lawsuits have emerged—for example, Wisconsin sued Miami over alleged tampering with an NIL agreement tied to a transfer. Also, federal courts are questioning established NCAA rules, such as the Five-Year eligibility rule, for possible antitrust violations.

Read more here: The Protect College Sports Act Explained: NIL, Transfers, Antitrust, and the Future of College Sports

and here: One-Time Transfer Rule in College Sports: Athlete Freedom or More Control?

What is changing with collectives?

New guidance now allows third-party collectives to operate with less restrictive oversight if their deals have a “valid business purpose.” That means more flexibility—but also more potential for exploitative or questionable arrangements.

Will smaller schools be hurt by these changes?

Many worry, yes. With caps per school like ~$20.5 million and wealthy donors driving large deals, smaller or less-funded programs struggle to compete, especially when recruiting and compliance costs increase.

Do athletes need to disclose past NIL deals?

As of late summer 2025, the NCAA is considering requiring incoming Division I athletes to disclose NIL deals from high school or junior college to the official clearinghouse. That could impact recruiting transparency—and pressure.

Is NIL bad for college sports in 2026?

NIL itself isn’t the problem — the lack of structure is. In 2026, NIL operates less like endorsement rights and more like an unregulated compensation market tied to recruiting and the transfer portal. That has created chaos: inflated player valuations, constant roster turnover, academic instability, and a widening gap between schools with deep-pocketed collectives and those without. While NIL has empowered athletes and corrected long-standing inequities, the absence of clear national rules has turned college sports into a year-round marketplace, forcing programs to prioritize money and retention over development, education, and long-term stability.

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