Evaluating the Past and Future of Penn State's NIL Initiatives

Penn State has labored to compete in NIL with the top programs, but change might be coming for the Nittany Lions.

Penn State football coach James Franklin takes a question during a press conference at football media day in Beaver Stadium. / Dan Rainville / USA TODAY NETWORK

Editor's note: This is Part 1 of a two-part story detailing Penn State's progress in NIL funding and operations. A version of this story first appeared in the Town & Gown Penn State 2024 Football Annual. Check out Part 2 here.

James Franklin and Patrick Kraft were in Las Vegas last December for the College Football Hall of Fame induction ceremony when they received an email pitch. An agent was shopping football players for potential transfers, and was Penn State interested? The list contained eight names. One played for Penn State — but wasn’t in the NCAA Transfer Portal.

“I was not very happy that was happening,” said Kraft, Penn State’s athletic director.

That moment underlined for Kraft and Franklin the transactional nature of today’s college football, which reduces players to tradable assets, finds agents chasing commissions and turns coaches and athletic directors into general managers. It’s all supported by the 3-year-old Name, Image and Likeness platform, which, coupled with the transfer portal, has redefined college football. The sweeping changes aren’t stopping.

A proposed settlement of three lawsuits against the NCAA could prompt college athletic departments to share more than $20 million in annual revenue with athletes, a shift players consider long overdue. Franklin said he supports revenue sharing and collective bargaining in college sports, not only to provide athletes with their earned share but also to activate some fencing around his sport. That agent’s email underscored the constant stream of issues wearying coaches like Franklin.

“And that's why I think you see a lot of coaches going to the NFL or leaving head coaching positions to be assistants,” Franklin said. “Because, No. 1, that's not what they signed up for and, No. 2, it's outside of your control.”

Penn State’s official NIL collective, Happy Valley United, remains largely outside Franklin’s control – for now. Yes, the coach can discuss strategy with the collective and meet fans to pitch its importance. But he doesn’t dictate the collective’s budgeting or fundraising and now must deal with players’ agents as well as parents. Soon, though, Penn State will join other schools in bringing the NIL infrastructure in-house as athletic departments assert more control over the process, including deal activations.

"Yeah, I would like that to happen yesterday," Franklin said. "Because I think at the end of the day, it's hard, right? It's challenging when I'm ultimately responsible for it, but it's outside of my control."

Franklin struggles with the big picture as well. As other college football coaches wear "We Pay Players" shirts at practice, Franklin believes in the transformational powers of college athletics and centers his recruiting pitch around it. However, NIL has made that pitch, and his relationships, more transactional. Players seek immediate paydays out of high school, through the portal or even on his current roster.

Though NIL is significant to its recruiting strategy, Penn State still wants to create a transformational experience above a transactional one. Being competitive with cash is vital, and Happy Valley United continues to educate fans about the importance of contributing. But Penn State wants to educate its players as well, through an initiative honoring Wally Triplett, and help them engage in brand-building – another 40-year opportunity.

“I think we're still a transformational program,” Franklin said. “When some programs lead with NIL, and some recruits lead with NIL, and that's going to be the reason why they choose the school, then it's hard for it not to be just a transactional relationship. “

RELATED: The James Franklin interview: Penn State's progress on NIL, revenue sharing and the future

Penn State's NIL history

Happy Valley United became Penn State’s official NIL collective in 2023, when two collectives (Success With Honor and Lions Legacy Club) essentially merged. Happy Valley United now is the primary means through which Penn State athletes earn NIL money. Kraft said the collective’s formation reduced the frequency with which NIL appeared on his schedule.

“Thankfully I'm only spending 30 percent of my time dealing with this NIL space, which was vastly different when I first got here [in 2022],” Kraft said.

Franklin has said that Penn State initially moved slowly into NIL, prioritizing athlete entrepreneurship over fundraising in the first year, which caused a lag. Jen Ferrang, Happy Valley United’s general manager for development and corporate partnerships, said that fundraising has “grown significantly” over the past year, with donations ranging from $25 monthly collective memberships to some six- and seven-figure contributions. Still, Penn State must continue explaining to fans the importance of NIL. At recent NIL events, Franklin has used an example.

When Penn State introduced its “Generations of Greatness” throwback uniforms in 2017, Franklin had to agree to a condition: that the jerseys would be auctioned after being worn. Franklin remembers watching Saquon Barkley’s jersey sell for four figures, of which Barkley got none.

“That’s a story that resonates with people,” Franklin said. “The reality is, people have been donating to athletic departments forever, whether that was for scholarships or whether that was for facilities. And I think if you would talk to even our athletic administration right now and ask them where their dollars should go and where it's going to be the most impactful, specifically for Penn State football, it would be on NIL.”

Penn State also continues to theme NIL through the transformational lens. Justin King, a former Penn State player, has worked in Franklin’s recruiting department, in the former XFL and in the NIL space with his company L.I.G Sports Group. He advises athletes about branding and NIL deals and is familiar with the college landscape. He sees Penn State’s NIL strategy following the football program’s legacy.

“Penn State [fans] are accustomed to supporting Penn State from a more transformational standpoint,” King said. “That’s been the basis of Penn State's ecosystem for 70 years, since Joe Paterno and the Grand Experiment. That's what people are emotionally attached to. So I think it's hard for them to get around, quote-unquote, paying to win. I think they can get around paying to transform people, and then we win as a byproduct of that.”

RELATED: How the House vs. NCAA settlement will impact Penn State sports

Meet the collective, Happy Valley United

Ferrang was at Penn State for both national-championship seasons in the 1980s. She wants this generation of fans, which hasn’t witnessed an undefeated season in 30 years, to share her experience. Ferrang called NIL essential to that mission but acknowledged the headwinds Penn State has faced.

“I think people are still very skeptical about where the money's going,” Ferrang said. “Some of the reaction is, ‘Hey, I really spend money with the Nittany Lion Club, I donate for scholarships, I donate to THON, why do I need to do this?’ And people still seem to be feeling like they're spending too much money or they're not making the direct connection between winning and their donation.”

In football, Happy Valley United provides players with a baseline monthly stipend, for which they produce “deliverables” such as personal appearances, social-media posts, autograph sessions, etc. Players also can sign individual deals outside the collective. During the football season, players can engage in NIL activities only on Mondays, their weekly off day. Outside of that, their focus is football.

Kraft endorsed Happy Valley as the preferred collective, and coaches across programs have begun campaigning on its behalf. Franklin has attended multiple NIL donor and education events over the past year, including a meet-and-greet in Philadelphia this past spring that featured Barkley. Happy Valley United operates the home-game 50/50 raffle at Beaver Stadium and has signed more than 20 deals with corporate partners to produce branded products such as an official beer, vodka, bourbon, sports drink and jewelry. Some proceeds from those sales go to Happy Valley United and, in turn, to athletes.

The collective recently hosted a major fundraiser in New Jersey and its largest initiative is a $500,000 fundraiser dubbed “Retain the Roar” to raise funds for football roster retention. Through early August, the campaign has raised more than $370,000, with Barkley included among the more than 400 donors. By comparison, the Michigan collective’s similar initiative, a $1 million “Those Who Stay” campaign launched in January, had raised more than $760,000 from 4,600 donors.

That’s an example of the donor imbalance Penn State faces against its biggest rivals. Beyond issues with expectation and education, which all collectives confront, Penn State faces another challenge: Some donors want Penn State to recognize Joe Paterno, the late head coach, in some way.

“There are still people out there waiting for the Paterno thing to be resolved, and that leaves money on the sidelines,” Ferrang said. “… I think there's a lot of people that are still mad at the university because of the way everything was handled, and they are withholding their money until Joe and Sue are properly recognized.”

Ferrang said she’s unsure if or when that could be resolved. Meanwhile, Franklin and men’s basketball coach Mike Rhoades have embraced their roles as the principal voices of education regarding Penn State’s NIL program, which seeks to blend money into the transformational experience and not lead with it. But the fundraising arm is improving, Ferrang said.

“If we had the opportunity to go get a transformational player, a game-changing type of player, I think the support would be there now,” Ferrang said. “I think we've come a long way and I see it in some of the other sports now, too. I mean, not only with football, but people are getting organized that have supported different sports that may have had a booster club in the past or may have had kind of a loose committee. I feel like we still have a ways to go with football, but we're getting there.” 

In Part 2, a look at the Penn State Brand Academy, the players' perspective and what's next for NIL.

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Penn State on SI is the place for Penn State news, opinion and perspective on the SI.com network. Publisher Mark Wogenrich has covered Penn State for more than 20 years, tracking three coaching staffs, three Big Ten titles and a catalog of great stories. Follow him on X (or Twitter) @MarkWogenrich.