All major publications, be it New York Post, Quartz or Hypebeast– have declared NFT a bubble. There is no denying that stats from NonFungible.com and DappRadar suggest that NFT revenue is on a decline.
So, has the NFT era died?
Well my dear friend No! NFT hasn’t died yet. It will not. NFT is expected to only grow bigger in the future.
Well, the new National Collegiate Athletic Association (NCAA) ruling has added more fuel to the NFT market. The NCAA is now allowing college athletes to earn from their name, image, and likeness (NIL). And guess what, athletes are turning towards NFTs to monetize their NIL.
In this article, we will discuss the new NCAA guidelines and their impact in detail. We will cover everything – what are NFTs, ﬁrst collegiate NFT, the new NCAA rules, which players and companies are banking on NFTs, how much a player can make by leveraging new NCAA laws, and much more.
Let’s get started!
What are Non-Fungible Tokens (NFTs)?
Before we dive into the college athletes minting their NFTs, let’s take a step back and understand what an NFT is.
In simple words, Non-fungible tokens or NFTs are lines of code on a blockchain platform that verify the ownership of an asset. For those who don’t know, blockchain is a decentralized ledger that records data in an immutable and secure fashion.
By deﬁnition, non-fungibility means the asset is unique and cannot be replaced. For example, your 100 dollar bill is fungible as you can trade it for another 100 dollar bill. On the contrary, NFTs are non-fungible crypto tokens that cannot be replaced with another NFT. This makes them unique and valuable.
Why are NFTs so popular in the digital collectibles space, you ask?
Ownership of digital art is hard to determine in the internet age, where the artwork can be inﬁnitely reproduced. Today, you upload a .jpeg image, and within seconds your image is copied and posted elsewhere without you knowing.
NFT solves this issue!
Firstly, NFT can be minted to represent any asset, be it an audio ﬁle, a jpeg image, a video, in- game items, and even physical real-estate. Secondly, NFT is minted on a blockchain, meaning your ownership record cannot be tampered with. Say you bought a digital artwork NFT. No matter how many times the artwork is duplicated, the NFT will always point to the internet address of the artwork for which it was minted.
Most importantly, minting NFTs have become the artists’ favorite vessel to earn revenue as they get to sell their artwork without any go-betweens. Plus, as discussed, NFTs are technically lines of code. This implies artists can program NFTs in a way that would allow them to earn royalties for their artwork every time the NFT is resold.
Now that you have a brief idea about NFTs, let’s discuss how college athletes are beneﬁtting from NFTs.
NFT Craze Enters Into College Sports
Merrell Center in Katy, Texas, the home of the Southland Conference’s Men’s and Women’s Basketball Championships, witnessed the ﬁrst college NFT. Yes, on March 14, 2021, the ﬁrst collegiate NFT was minted inside the Merrell Center.
Stephen F. Austin (SFA) State University’s AD Wally Crittenden deployed the NFT contract, veriﬁed it, and minted the NFT token right in the Merrell Center as soon as the Women’s Championship game ended. This NFT was a tribute commemorating SFA LadyJacks’ ﬁrst NCAA berth. As soon as it was minted, it was put up for auction on TheFanBlock.com.
Most importantly, the SFA Fan Block NFT auction was decentralized. Crittenden said that the NFT auction winner had no ties with the school. He was a blockchain and NFT enthusiast who wanted to collect the ﬁrst collegiate NFT.
The NFT institutional fundraiser raised $100, beneﬁting the SFA Purple Lights Fund. Despite a small amount raised, Crittenden believes NFTs could become a real revenue channel for athletic departments in the future. He says that there are fans who support every collegiate program.
Plus, there is no shortage of internal creatives who can create digital assets.
Well, to make things clear, SFA didn’t mint the ﬁrst collegiate NFT expecting a thousand-dollar sale. For SFA’s athletic department, it was a trial balloon with little to no risk.
The Role Of Tron Blockchain
SFA State University’s AD Crittenden has been exploring the NFT space since December 2020. However, only after TRON Blockchain rolled out NFT support did his NFT dream become a reality.
Why TRON, you may ask?
Because the TRON blockchain supports the Fan Block app wallet. Moreover, TRON has low fees and high transaction ﬁnalization speeds. The transactions are ﬁnalized faster than a credit card transaction. Thanks to TRON, fans can make several transactions in a day without worrying about fees.
There is no denying that there are other great blockchains for minting NFTs. However, the user participation costs and the transaction costs were signiﬁcantly higher than those of TRON.
In short, TRON has low fees for minting NFTs. Plus, it costs less to make transactions using the TRON blockchain.
SFA Crypto Tokens
To experiment with crypto tokens, SFA minted two tokens – the SFA Athletics token and the SFA Golden Jack. This was an attempt towards creating a cashless environment that would help SFA save on processing fees, among other beneﬁts.
As for their utility, SFA Athletics tokens were reward tokens. The token holder could exchange them for tickets, merchandise, or on campus at the Campus Recreation Center. SFA’s Golden Jack Token was their VIP token that unlocked some premium beneﬁts for token holders.
Crittenden, the assistant AD of SFA, said that the ability to manage rewards distribution of the entire athletics department using a smartphone was a game-changer.
Thanks to the tokenization of assets, the redemption process was also streamlined as it no longer required manual tracking of promotional cards. Surprisingly, even fans with little technical know-how preferred receiving in-app tokens rather than a physical promotional card.
Well, SFA tokens minted in 2018 were not NFTs. The tokens were built on TRON’s TRC10 token standard. Essentially, TRC10 was meant for simple transactions such as distribution and redemption. On the other hand, NFTs are minted using the TRC21 token standard.
The pilot program tokens created using TRC10 are still live on the TRON blockchain. Nonetheless, as they are not tied with a program for their distribution, circulation, and redemption, these tokens have no value. Contrarily, TRC20 NFTs have a market-driven price.
However, currently, there is no marketplace supporting NFTs on the TRON blockchain. Thankfully, Crittenden is trying to change that. His company is working on a trusted private marketplace for NFTs.
NCAA Is Allowing College Athletes To Monetize Their Name, Image, And Likeness (NIL)
On July 1, 2021, National Collegiate Athletic Association (NCAA) announced that college athletes can now monetize their name, image, and likeness (NIL).
Chip LaMarca, who led the NIL legislation in Florida, said that students in ﬁnance or engineering ﬁelds can build a project or an app and make some money. However, there were no options for college athletes to earn money. NIL legislation creates a level playing ﬁeld for all students.
Thanks to the revised NIL legislation, all Division-I college athletes can earn revenue outside the sports arena.
What Were The Rules Before?
The NCAA had barred players from generating revenue from advertising or recommending/promoting any commercial product or service.
Further, with a handful of exceptions, an agent cannot represent a college athlete in a sport.
What Are The New Rules?
Under the new NCAA guidelines, Bylaw 12, a code that governs amateurism and athletics, eligibility will no longer be enforced on students if they wish to monetize their name, image, and likeness (NIL). Moreover, athletes can now have representation for their NIL activities.
The NCAA has also asked schools to set their policies on whether or not an athlete can wear a university logo in an advertisement.
Also, college athletes will not be directly paid by the universities except their cost of attendance. Plus, athletes cannot be considered as employees of the respective colleges.
Richard J. Ensor, the commissioner of the Metro Atlantic Athletic Conference, clariﬁed that the regulations would be tweaked as per future requirements. However, the underlying rules won’t change.
NCAA NIL Rules Overview
Here are the new NCAA guidelines –
- Division-I college athletes can sign third-party endorsements without school or conference
- College athletes can monetize their social media, personal appearances and make business deals without institutional involvement or the use of trademarks/logos.
Nonetheless, the NCAA/ Athletic Conference/ University has the rights to the video, highlights, or other media produced from the sporting event.
However, NCAA athletes have been building their online presence for most of their careers. They would eventually ﬁgure out a way to sell their digital highlights. Considering this, the NCAA should allow student-athletes to monetize their highlights. And the NCAA should manage this digital asset marketplace. This way, the NCAA can take a percentage of each sale, and athletes can also promote their brand while maintaining the integrity of the sale.
NFT Is Opening Revenue Floodgates For College Athletes
Talking about the NFT boom, Patrick Mahomes and Rob Gronkowski launched their NFT cards in March. The Gronkowski series became increasingly popular, generating nearly $1 million in sales.
Three months ago, Luka Garza, the AP Men’s College Basketball Player of the Year, tried selling his NFT after Iowa lost the NCAA tournament. Back then, the NCAA rules prohibited athletes from monetizing their fame. Garza couldn’t sell his NFT. He had to wait until his ﬁnal college season ended. After Luka’s college career ended in April this year, his NFT was auctioned for a whopping $41,141.
Fast forward to July 1, when the NCAA announced their new guidelines, everyone started jumping on this new revenue bandwagon.
Twin basketball players Hanna and Haley Cavinder from Fresno State University are amongst the popular basketball ﬁgures with 3.3 million TikTok followers. Thanks to this massive social media presence, they signed a contract with Boost Mobile.
1. McKenzie Milton And D’Eriq King Are Launching DreamField
Florida State quarterback McKenzie Milton and Miami quarterback D’Eriq King took the NIL game a step ahead by entering a unique business partnership.
Milton and King became the co-founders of Dreamﬁeld, a NIL-centered platform for booking live events for college athletes. These include autograph signups, meet-and- greet sessions, and speaking engagements. Milton and King are the faces of Dreamﬁeld. They also have plans to recruit other college athletes.
Other than booking live events, Dreamﬁeld also plans to dive into the NFT market. Milton is all set to auction his digital card NFT, while King will make his NFT debut in late July. Well, Milton’s NFT is believed to be the ﬁrst NFT for an active college athlete. For this, Dreamﬁeld partnered with illustrator Black Madre, who created the popular Gronkowski series.
2. Spencer Dinwiddie’s Galaxy Will Recruit College Athletes
NBA player Spencer Dinwiddie has always been for crypto from the start. He made waves in the crypto space in 2019 after he announced that he would sell tokenized shares of his $34 million NBA deal. However, the NBA objected to Dinwiddie’s venture as it was against their rules of transferring compensation. As a result, the token sale was delayed twice. Finally, when the sale went live in 2020, Dinwiddie received just $1.35 million.
Spencer Dinwiddie is also the owner of Galaxy, a crypto-powered platform for inﬂuencers. On July 8, 2021, Galaxy raised $7.5 million in funding.
For a bit of background, Galaxy is built for launching social tokens for inﬂuencers who sign up with Galaxy. The application will oﬀer goodies to their fans, including video messages. According to Dinwiddie, as opposed to signing a one-time deal, inﬂuencers will generate more long-term value by engaging their fans on Galaxy.
Currently, Galaxy has onboarded names like Iman Shumpert (NBA Player), NFL player Ezekiel Elliott, former ABC “Bachelor” Matt James, and Maxim’s Sexiest Woman Alive Teyana Taylor.
Dinwiddie also sees enormous potential in college athletes as they are now allowed to sign business deals as per the new NCAA rules. Keeping this in mind, Dinwiddie plans to recruit college athletes for Galaxy.
According to Dinwiddie, there’s a gold rush now. College athletes will rush to sign whatever they can make money from. However, as the dust settles, athletes will be more strategic about their business decisions. They will choose companies that align with their brand.
How Much Will Players Make?
Well, this is a subjective question. NCAA laws do not guarantee any deals. These rules just make it possible for college athletes to earn revenue from their NIL deals.
Star college athletes in football and basketball could bank millions. However, other athletes in the same sport might land deals worth thousands or tens of thousands of dollars.
It is tough to assign a number to these deals.
The chief executive oﬃcer of Dreamﬁeld – Luis Pardillo, said he knew some players planning to charge upwards of $2,000 an hour. Nonetheless, Luis, as well as other executives, believe that the fees are market-driven.
Long story short, there is no cap or a minimum amount a college athlete is guaranteed to earn. Some college athletes will charge high, while others might cut their rates. It all depends on how popular the athlete is, their performance, and most importantly, the market demand for such college athlete inﬂuencers.
Every Major Sports League Will Eventually Join The NFT Bandwagon
Well, the NBA is already in the NFT game with their increasingly popular NBA Top Shots. The MLB has also tried the NFT waters in 2018 with the MLB Crypto Collectibles, which didn’t fare well.
Spencer Dinwiddie believes that as more and more athletes join the NFT party, the big sports leagues will have to embrace crypto. He says as NFL athletes are creating their NFTs, the NLF league will also try to enter the NFT club. After all, which sports leagues want to miss on a future revenue stream?
Furthermore, the NIL legislation will encourage more college athletes to monetize their name, image, and likeness by minting NFTs.
In a Nutshell
Earlier, college athletes were not allowed to beneﬁt from their popularity. This changed on July 1, 2021, after the NCAA amended its rules and passed the NIL legislation.
As per the new rules, college athletes can monetize their name, image, and likeness (NIL). Athletes can sign business deals, make revenue from their social media handles, and whatnot. Nonetheless, they don’t have the rights to all media produced at live sports events. Considering this, the NCAA and Media Networks who own the live sports events rights live sports might also dive into the NFT market.