The Current State of NIL in NCAA Hockey

NIL in NCAA Athletics gets a lot of buzz. While most of the attention is focused on football and basketball, NIL in hockey is starting to gain more traction. To understand the NIL phenomenon in college hockey further, I spoke with Professor Noah Henderson. Henderson is the Director of Sport Management at Loyola University Chicago and the founder of The College Front Office, as well as a former Name, Image, and Likeness columnist for Sports Illustrated.

Frank Zawrazky:  What is the background and current state of NIL in NCAA hockey?

Noah Henderson: Yeah, that's a great question. And I think that when you look at NCAA hockey, it's also good to think about it in the same realm as sports like women's volleyball, baseball and other sports that are gaining traction and visibility at strong rates, but are outside of the focal point of college athletics, which is football, men's basketball and even women's basketball, to a certain extent, could fall into the to either category, depending on institution, but probably more the category of baseball and hockey.

With that said, we are in the midst of tremendous structural changes to college sports in how athletes are getting paid. So I know we're going to talk about Gavin McKenna a little bit here, but McKenna reportedly signed right this $700,000ish contract to play for Penn State. That is reflective of what I like to call NIL 1.0.

NIL 1.0 was where you had these third party companies that were affiliated with each institution. They were called NIL collectives. And it really gave the universities these independent payroll arms to compensate their athletes. And it became this huge financial arms race where schools were calling upon their most trusted wealthy alumni to fund the effective payrolls of their sports teams. 

A lot of this was predicated on football and basketball, just that is often the institutional preference and the preference of those large boosters. But what you saw at a lot of unique institutions that have strong athletics programs outside of football and basketball was some certainly landmark deals. Gavin McKenna's $700,000 compensation falling in line quite squarely with these kind of unique deals that happened outside of football and basketball. Penn State has also been known to pay wrestlers well, which is a sport that they emphasize greatly at their school.

We've transitioned into NIL 2.0, where starting in July of 2025, very shortly after McKenna signed this deal, schools, because of the settlement of a class action antitrust lawsuit, schools are now confined to what's called revenue sharing. Rather than boosters paying for the athletes' schools starting in July 2025, are able to compensate athletes directly from their own athletics revenue.

With that is some important caveats, the first being a cap. So this year's cap on what schools could pay their athletes is 20 and a half million dollars that will increase gradually over the next several years.

So schools are now the primary payment arm of student athletes, as opposed to boosters. That 20 and a half million dollars covers all sports at the institution, so football, basketball, wrestling, baseball, and so on and so forth all have to split that revenue.

What we've seen is a split of usually, you know, at a school like Penn State, the majority of money is going to go to football, probably in the around 80% but at most flagship universities, you're going to see 75 to 80 perhaps 85% of money go to football, 20 ish percent go to basketball, 5% women's basketball, and then the other sports can fight for the scraps when it comes to athlete payment of that cap. 

What's also happened is the old method of paying athletes through those NIL collectives, those booster ran companies, all of that is now audited by the College Sports Commission. If it seems like pay for play, where athletes aren't engaging in good-faith endorsement deals, right? An athlete like McKenna, who has such influence, is sponsored by hockey apparel companies and probably other local companies to do commercials. All of that is fine. You can continue to monetize your influence in the same way professional athletes do, but if there are sham deals that we saw a lot in NIL 1.0, where it's these fake sponsorships to just serve as a vehicle to pay athletes, those will be audited and disallowed by the College Sports Commission. 

So why is all of that background necessary? Well, for these unique sports, or hockey is not unique, but in the college landscape, right, not the focal point, you are seeing that cap become much more restrictive to those sports right where, in a world where I had no cap, and I could recruit boosters with a wide variety of interests, we could pay athletes in any sports that the boosters cared about. 

Now, when the schools are making determinations on the budgets of those teams, as far as their player compensation goes, sports like hockey and baseball are getting squeezed out because of the institutional importance of football and baseball. 

Those monster deals that we saw McKenna sign are going to become less feasible as the total budget for those programs get squeezed due to the revenue-sharing cap and the fact that there's kind of an institutional importance to football and basketball.

THN: When you when you talk about this cap going up, would that mean that more funding goes into the smaller sports, like hockey, baseball, volleyball, etc?

NH: No, it would just remain a kind of a static percentage. The thinking is, well, if we now allocate more money to hockey, and the University of Texas continues to not sponsor hockey, and they continue to put 85% of their revenue sharing funds towards football, then we fall behind.

As much as I would like to see other sports gain some compensation, you're going to have the competitive landscape of college basketball and college football will continue to make those revenue-sharing allocations kind of the same percentage, just with a bigger cap.

THN: So the collectives are a separate type of professional endorsement, whereas the revenue sharing cap is something the school says, "Hey, we made X amount of money, and we can distribute that as we like."

NH: Yes. The upper limit is 20 and a half million this year. These NIL collectives used to be that exact function, right, where they would do these fake endorsement deals to pay players.

Now NIL collectives are restricted because those deals are audited. So if there's not a good faith endorsement contract, right, there's no like commercial or there's no social media posting, there's no real marketing effort behind it. It'll be disallowed. That wasn't the case until this year. So that's how the NIL collectives were kind of working as these like de facto payment arms.

THN: What, if any, regulations changes would you make to level out NIL?

NH: I don't know if I have any definitive regulatory changes that I'd like to see. Perhaps some stuff with age limits. I understand that, because of the Masterson case, players who had played in the Canadian Hockey League are now eligible to compete at the NCAA level, soI think perhaps some age limits could be important.

I know in basketball, European pros is a pretty good corollary. They don't get the full four years of eligibility, right? If you play two professional seasons, usually you'll get two, maybe, in a weird case, three years of collegiate eligibility. 

So, ensuring that players who have played CHL hockey can play in the NCAA, but might not receive that full eligibility window that could allow them to play, you know, an 18 year old when they're 26. That's something that I think is important to preserve might be challenging in the court system.

I also find it important to point out that with this whole revenue-sharing cap that we have, 20 and a half million dollars, it's only the power conference schools that are spending that.

A school like Loyola is probably spending roughly $3 million on basketball. That is $17 million shy of the cap, but that's competitive in the Atlantic 10 Conference, and there's no football team to pay. That means that they have 17 million extra dollars that they could theoretically spend. Compare that to the University of Illinois, who's paying their football team $16 million, their basketball team $6 million, and the other sports sprinkled in on the rest; there is a huge opportunity for non-power four schools that don't have football or who aren't spending on other sports, to have this kind of structural advantage.

Think about a school like Denver. No football, they have a basketball team that they're probably going to spend a million dollars on. Meaning, that if there is an interested booster, which there likely certainly is at a school like Denver, who has a strong hockey tradition, and wants to pay their athletes, that booster can donate money to the school, and they can use it as revenue sharing. 

That flexibility exists at Michigan Tech, that flexibility exists at Denver, that flexibility exists at some of these schools that aren't the traditional Big 10 powerhouses. They have more flexibility to spend on their hockey team. Penn State's confined very narrowly to spending that rev share cap on football and basketball, but Michigan Tech, Denver, those types of institutions are nowhere near their cap. 

I can't see into the future, and I don't know their individual booster statuses, but they have the structural flexibility to spend way more than any of those other schools because of the lack of football spending.

THN: Especially with the lack of football and if their basketball team isn't doing well, those factors could impact spending.

NH: Nobody's going to spend $20 million on a basketball team. To be competitive, you need $3 million. It's really schools with the highest level football, the ACC, Big 12, Big 10, Sec, those schools are going to be the ones maxing out that cap. Every other school has space.

If you can find booster money, that's where the flexibility to pay a McKenna size contract can happen. You'd think it would be the bigger sized universities, but no, it might actually be like a Boston University.

THN: Interesting. We've looked at like smaller schools, like Merrimack or a Stonehill, or the University of New Hampshire. Places like that may be in the running as well.

NH: Absolutely right. It's those schools who aren't spending the full cap that can now maybe have an Angel Booster come in and give money to fund the team. Structurally, they can do that, whereas the other schools are kind of bound by that rev share cap. 

THN: What other information about NIL in collegiate hockey should our readers know?

NH: I think what I just talked about is probably the most important part. That shifting, in my view, it's going to be harder for a school like Penn State to sign another McKenna sized contract. It would require that Penn State is sourcing a lot of outside of the cap money, sponsorships that the university is providing the athlete. They're sourcing endorsement deals or licensing their name for merch or so many other different ways that doesn't count towards that direct payment cap. I think structurally, it's easier for smaller schools to do that because they have space within their cap. The challenge for them is finding the money to do so.

You're likely to see more parity moving forward. Penn State and others with these expansive booster networks are going to be kind of kneecapped by that rev share cap.

You won't see just the richest schools win. You could actually see the inverse if some of those smaller programs find some funding. It's exciting to see. I'm really looking forward to seeing college hockey continue to grow in visibility and commercialization, right The more successful that this sport is in terms of viewership and in terms of institutional importance, the more of that rev share cap will end up flowing to the team. 

At the end of the day. It's all about institutional importance, which really ties in just the media value of these games. From everything I've seen, based on how great viewership was at this year's Olympics and the increased attention towards the Frozen Four, I think hockey's definitely on the rise.