Smaller Schools Can Stay Competitive by Turning NIL Merch into Rev Share Dollars

By acquiring player's NIL licensing rights for merchandise, non-Power 4 schools can unlock new revenue streams and boost their competitive edge in revenue sharing

Noah Henderson | Mar 28, 2025

Dec 6, 2024; Boise, ID, USA; Boise State Broncos running back Ashton Jeanty (2) is interviewed by Fox Sports reporter Allison Williams after the game against the UNLV Rebels at Albertsons Stadium. Boise State beats UNLV 21-7. Mandatory Credit: Brian Losness-Imagn Images / Brian Losness-Imagn Images

Starting next year, college athlete compensation will be more professionalized than ever, and the competitive disparity between the haves and have-nots in college sports will only continue to grow.

NCAA rule changes stemming from the preliminarily approved House v. NCAA settlement will allow schools to directly compensate athletes for their on-field performance beyond scholarships and other educationally related expenses for the first time.

Schools that opt into the settlement are bound to an annual NIL revenue-sharing cap for payments to athletes across all sports (20.5 million for the 2025-26 season). The settlement also gives the NCAA auditing authority to crack down on illusory NIL ‘pay-for-play’ agreements that have become commonplace in college sports.

Effectively, the new system looks to move the purview of performance-based payment from the hands of third-party NIL collectives and into athletic departments.

Most Power 4 schools will compensate up to the cap, while Group of 5 and mid-major programs that lack the revenue-generating capabilities of big-time programs will pay revenue-sharing sums in varying amounts under the NCAA’s payment limit.

Power 4 schools, however, are not strictly confined to that $20.5 million NIL revenue-sharing cap for athlete payment. The new arms race in college sports has become “above-the-cap payments,” where schools proactively facilitate legitimate brand deals and licensing agreements for their athletes to increase their total compensation beyond institutional revenue sharing –– earnings that would not violate the restrictions of the NCAA’s NIL auditing arm.

All schools are built differently, and what could be one school’s “above the cap” payment may be best served at another institution as spending within the cap.

Collegiate athlete-licensed merchandise is booming; companies like Topps, Fanatics, and Campus Ink have invested heavily in player-licensed products, paying athletes millions of dollars in royalties every season.

While Power 4 schools will incorporate these transactions into their “above the cap” strategy, smaller schools that cannot afford the $20.5 million cap can generate additional revenue to be used for increased NIL revenue-sharing capabilities by acquiring the rights to their athletes’ NIL for merchandise and memorabilia licensing.

Within institutional revenue-sharing agreements, smaller schools may consider acquiring limited licensing rights of their athletes to redirect the royalties earned from the sale of merchandise and memorabilia to NIL revenue-sharing –– not taking money out of the hands of athletes but purchasing their NIL upfront and allowing schools to manage the disbursement of those revenues down the road.

Ultimately, this practice can allow smaller schools to move what would be “above the cap” payments at larger schools in-house and use that revenue strategically on roster construction or place it in a pool for more equitable distribution amongst all athletes.

A more socialistic approach to jersey licensing is common in professional sports. The NFLPA oversees licensing player NIL in professional football, and the revenue from jersey sales is based on a 67/33 split. Individual athletes keep 67% of the revenue from the licensing of jerseys bought with their name and number, and the other 33% is put into a fund that is evenly distributed amongst every NFL athlete.

This means that even if you are an athlete with minimal exposure and sell no jerseys bearing your name, you receive an equal split of 33% of the total name and number licensing pool at the end of each NFL season.

The MLB takes an even more equitable approach: All players receive an equal share of licensing revenues, prorated based on service time. This allows players without tremendous stardom, usually the same players who don’t sell many jerseys, to supplement their income from the revenue brought in by the league’s biggest names.

Last year, Ashton Jeanty topped the charts of Campus Ink’s NIL Store’s most purchased jerseys. The company’s favorable royalty rates resulted in a financial windfall for one of the most prominent athletes in college football.

From an institutional perspective, it would be great for a school like Boise State to control this money and either disperse in a pool across the entire roster in an NFLPA or MLBPA style model or fully take control of the funds for use in strategic spending that could attract better talent to take the field alongside a star athlete like Jeanty.

The system can even increase team cohesion. When one player receives massive media attention and their merchandise is desired, everyone stands to benefit. Players will be happy to promote their stars, knowing that, in one way or another, the money ultimately comes back to them.

In the MLB, big-time players have opportunities to license beyond the scope of their MLBPA group licensing agreement (GLA). Players who sign with Topps to provide signatures for cards or appear on the cover of MLB The Show gain additional payment that does not get redistributed to the league.

Like high-profile professional athletes, college stars will also experience negative financial impacts from this system’s wealth redistribution. Schools should ensure that enhanced earning opportunities beyond standard name and number licensing remain for the sole benefit of star athletes to reward their achievements.

Beyond the ability for schools to dictate how funds are spent, institutional control of NIL rights allows schools to cut out the expense of group licensing partners. Companies that facilitate GLAs between college athletes and merchandise and memorabilia retailers often take a hefty cut. For jersey sales, it is reported that One Team Partners takes approximately 30% of the total retail price for its role in the GLA process.

Schools that purchase athletes’ NIL rights upfront could negotiate directly with merchandise and memorabilia companies without a third party, potentially reducing transaction costs and increasing the total licensing compensation that reaches their athletes' pockets.

Power 4 programs will dominate the direct revenue-sharing space. Group of 5 and mid-major schools should not attempt to copy the payment structures of top programs. Smaller schools can create competitive advantages by controlling and redistributing athlete licensing while ensuring roster-wide benefits.

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