By Robert J. Romano, JD, LLM, St. John’s University
In October 2018, the NCAA’s Division I Council enacted a ‘notification-of-transfer’ rule which has come to be known as the ‘transfer portal’. This ‘transfer portal’ allows student-athletes, without the permission of either their current coach or athletic department, to transfer one time during their college athletic career from one four-year NCAA member institution to another.[1] All a student-athlete needs to do under the portal system is inform his or her current school of an intent to transfer, which then requires that institution to enter the student-athlete’s name into a national transfer database within two business days.[2] Once entered, coaches from other NCAA colleges or universities are free to contact that student-athlete without fear of violating any NCAA rules or regulations.[3] The ‘transfer portal’ system also allows for transferring student-athletes to compete immediately, without the need to sit out a year in residence as required under the old rule, provided the athlete is academically eligible.[4]
Three years after the ‘transfer portal’ system went into effect, in July 2021, the NCAA, as various state laws were scheduled to go into effect, implemented rule changes that would now allow student-athletes to monetize their Name, Image and Likeness (NIL) without the fear of losing either their scholarship or athletic eligibility. Although the NCAA did not officially adopt its own rule allowing student-athletes to monetize their NIL, what it did was approve a policy which states that “if a student-athlete elects to engage in NIL activity that is consistent with and protected by a valid and enforceable law of the state in which the institution at which such individual enrolls is located, the individual’s eligibility for intercollegiate athletics will not be impacted by application of Bylaw 12.”[5]
When the transfer rules were amended by the NCAA in 2018, student-athletes would enter the ‘transfer portal’ for a number of different reasons: their coach took a position at another institution, thinking they could get additional playing time to showcase their talents and skills elsewhere, a bigger program, a smaller program, or simply because a change of scenery was needed.[6] With the modification to the NIL rules, however, there is speculation that colleges and universities with the most attractive or advantageous NIL policies, provided to them either through their state’s law or their own initiated guidelines, are using such as a recruiting tactic to lure student-athletes utilizing the ‘transfer portal’ system to their schools.
According to Rick Allen, co-founder of InformedAthlete.com[7], such speculation is true . . . to a limited extent. When interviewed on the subject, Mr. Allen stated that, “In most college sport, the non-revenue sports, I don’t see a direct connection when it comes to transfer athletes choosing a school based on its NIL rules. I do, however, see a connection when we talk about the revenue producing sports of football and men’s basketball.” And even though the NCAA’s policy states that “NIL opportunities may not be used as a recruiting inducement . . . ,”[8] this belief that transfer students will be courted by programs with promises of profitable off-the-field opportunities was affirmed by Mike Hughes of Journal Enterprise when he was quoted saying, “What we are going to see happen is that bigger colleges with winning histories are going to use NIL to their advantage.” But favorable NIL policies or not, the question remains, how significant are these NIL agreements for student-athletes, whether a transfer student or not?
Current data, though limited, suggest that the impact is nominal, with most student-athletes making some, but not a significant amount of money from a NIL arrangement with a brand or company. For instance, one athlete marketing and NIL platform reported that from July 1, through December 31, 2021, NIL deals passing through its platform earned a student-athlete an average (not median) of $1,036.00.[9] A second marketing and NIL platform called INFLCR reported the same average of $1,306.00, but, interestingly, a median dollar amount of just $51.00.[10] In terms of which sports and schools are benefiting the most, another platform stated that approximately sixty-four percent of the NIL deals involve football, followed by men’s basketball and women’s volleyball, with a large percentage of the endorsement money going to athletes playing for colleges or universities within the Big Ten, Big 12, ACC, and SEC.[11]
Although there is no significant data to date to determine whether or not favorable NIL rules influence a transfer student’s decision-making process, the available data does indicate that NIL deals, for the most part, have little impact on a student-athlete’s overall finances. That being said, all indicators do suggest that top-tiered colleges and universities, in spite of NCAA rules to the contrary, will continue to use the lure of potentially lucrative NIL deals as an enticement to draw transfer athletes to their institution.
[1] This one-time transfer exception doesn’t apply to baseball, men’s or women’s basketball, football or men’s ice hockey. Student-athletes in these sports must file for a waiver to be able to compete without sitting out a season
[2] https://www.ncaa.org/news/2018/6/13/new-transfer-rule-eliminates-permission-to-contact-process.aspx
[3] https://www.ncaa.org/news/2018/6/13/new-transfer-rule-eliminates-permission-to-contact-process.aspx
[4] Until the rule adoption in 2018, student- athletes had to be granted permission from their current school to transfer and then they were required sit out a year as a penalty for transferring. If a transfer was denied a by the coach or athletic department, a long process would follow.
[5] NCAA Interim NIL Policy.
[6] https://georgiastatesignal.com/nil-deals-shaping-the-future-of-recruiting-and-the-transfer-portal/
[7] Informed Athlete is a consulting service that helps guide student-athletes through the transfer process. Additional information can be found at: https://informedathlete.com/
[8] https://ncaaorg.s3.amazonaws.com/ncaa/NIL/NIL_QandA.pdf
[9] NIL Industry Insights, Opendorse (Dec. 31, 2021), https://opendorse.com/nil-insights/.
[10] Alan Blinder, The Smaller, Everyday Deals for College Athletes Under New Rules, New York Times (Dec. 9, 2021), https://www.nytimes.com/2021/12/09/sports/ncaafootball/college-athletes-nil-deals.html.
[11] Id.
