NIL compensation stands for the deals in which college athletes are compensated, usually in the form of money, for an exchange of letting brands use their names, images, and likeness, especially if they are considered as a celebrity. That being said, college athletes can use their fame and get paid for appearing in an advertisement whether on traditional media channels or through the use of their social networks.
Unlike professional athletes, college athletes in the US have been excluded for years from getting NIL compensations. The argument used was that the young athletes should stay away from the bad influence of money, and concentrate on their performance and professional sports career. Of course, all of that was changed recently with the new NIL policy, becoming official starting July 1st, 2021. The new NCAA legislation will change the world of college sports and will have a strong impact on all student-athletes across the United States, allowing them to earn money from their names.
Even though college athletes have more freedom now to use their names to earn additional money, they are required to notify their schools of their NIL deals. Also, athletes won’t be allowed to promote products that are banned by their respective state’s law or when a deal conflicts with some of the schools' existing arrangements.
More reading on NCAA / NIL Links: