Understanding NIL and how WKU fits
When the Red Towel Trust launched in 2022, name, image and likeness (NIL) for college athletes was only in its first full year. Today, the trust is the official NIL collective for WKU athletics.
But let’s back up.
What is this “NIL” that has been changing the landscape of college athletics and disrupting one of America’s favorite pastimes?
It’s not something that can be ignored and is now arguably vital to remain competitive in college athletics.
“I can’t guarantee you win a championship with NIL, but you can guarantee you probably won’t win a championship without it,” said Nick Uhlenhopp, executive director of the Red Towel Trust Nick Uhlenhopp and former WKU chief of football staff.
When former University of Iowa guard Caitlin Clark appears in State Farm Insurance Company commercials and Nike billboards she gets paid for it. Likewise, when a WKU student athlete on everyone’s Instagram feed posts about Mr. B’s or Cheetah Clean Auto Wash, those are NIL deals.
For years, athletes and many supporters have advocated for student athletes to be paid and allowed to partner with outside organizations, essentially making money from the use of their name, image and likeness. “Why not,” the argument went, “Universities and the National Collegiate Athletics Association always have.”
Basically, colleges and the NCAA owned each athletes’ NIL, making millions off of them, year after year while the athletes did the work on and off the field or court.
When a group of student athletes took the NCAA to the United States Supreme Court to fight for the rights to their NIL, they won that match. In a 9-0 ruling on June 21, 2021, the Supreme Court ruled that student athletes are treated and viewed as employees of universities and the NCAA. In any other situation, not paying “employees” would be illegal, and therefore, the NCAA was in violation of the anti-trust law.
The Sherman anit-trust law prevents a focus of power from interfering in economic competition and trade in the workplace.
The Supreme Court had one overall message for the NCAA that was heard loud and clear across the nation’s playing field – “The NCAA is not above the law.”
Since student athletes have such limited time outside of classes and their sport, supporters of NIL argue that this gives athletes more freedom, financial stability and resources for careers.
Dr. Stacey Forsythe, associate Professor in the School of Kinesiology, Recreation and Sport at WKU, has conducted various studies with student athletes and has followed the development of NIL since the ruling in 2021. She supports the Supreme Court’s view and understands college athletics are not just three-hour events fans watch on television.
“I think my personal opinion is that for a long time, colleges everywhere have been making money off of athletes’ name image and likeness, so to me it’s only fair that if an athlete has the platform to go out there and make money, they should be able to do it,” Forsythe said.
On the flip side, those opposing NIL believe paying college athletes will destroy college athletics, ultimately creating another professional league. Schools that dominate in the NCAA competitions – Power 5 Conference schools – such as the University of Alabama, The Ohio State University and others will receive the brunt of the NIL money and deals, making recruiting and competing inequitable. The best athletes will go to the larger, more successful schools where they can enhance their opportunities for NIL money.
While talk show hosts and fans argue amongst themselves, the reality is that the reach of NIL to athletes outside of football and basketball (specifically men’s) isn’t stretching very far.
The Red Towel Trust and WKU
This brings us back to WKU. A school in Conference USA with under 15,000 undergraduate students isn’t at the top of NIL partnership ideas with Gatorade – owned by Stokely Van Camp Inc. – or Nike, which is where a collective such as the Red Towel Trust comes in.
The trust was founded in 2022 by Bowling Green Realtor, WKU alumni and former WKU employee Hank Wilson as a way to financially “sponsor” WKU athletes in their endeavors and support WKU’s relevance in a constantly changing NIL world.
The trust is labeled as a 501(c)(3) nonprofit. In order to be granted this specific tax class, the nonprofit must be “a trust, corporation or an association,” according to the IRS.
Additionally, it must have a specific dedication to a cause. With this, the trust is exempt from federal income and unemployment taxes.
According to the trust’s Form 1023, “RTC (Red Towel Trust) exists to encourage citizenship volunteerism and civic participation in Kentucky’s athletes. To do this, the organization will pair athletes with other non-profit organizations for activities where their engagement will raise visibility, inspire others, or encourage them to live healthier or more value-driven lives.
The donations of committed community members will primarily fund these activities… By supporting the work of community nonprofits, and using athletes’ visibility to raise awareness, Red Towel Collective will elevate regional social causes and generate awareness. This will increase community participation for participating nonprofit partners, allowing them to benefit while athletes grow in their character and values through civic participation.”
The difference between what the trust does and what brand representation does is that the money given to athletes through the Red Towel Trust comes from donors, not corporations. In its first year, the collective distributed a cumulative $350,000 to athletes.
“We are by the fans.” Wilson said during the trust’s website launch party in December. “We are the fans. So, we are pulling our resources collectively to support as many of these guys (athletes) as we can.”
Although brands such as Nike or Gatorade may partner with multiple athletes at one university, they are not exclusive to one school, unlike the Red Towel Trust.
“The Red Towel Trust is a collective. So, collectives are completely separate from universities,” Forsythe said. “They work in partnership with universities, because they’re benefiting the student athletes, but they’re totally separate from universities and totally separate from NIL, essentially. So it is, I guess, a form of NIL but the way that it works is totally different.”
This is what makes collectives so unique and important, especially in mid-major schools that can’t afford to keep up with Power 5 schools in the NIL game. Collectives can also be a valuable resource for sports that are not at the forefront of media coverage like basketball and football.
“I think collectives nationwide are super important for athletics, specifically when you’re talking about an institution like WKU, where our athletic programs are very, very strong, but you’re still going up against other athletic departments that have more money, have more NIL partnerships [or] have bigger collectives that can offer these transfer students or recruits more money,” Forsythe said.
With the NCAA’s 2023 amendments to transfer statutes, athletes can enter the transfer portal as many times as they want without it affecting their eligibility. Consequently, schools are scrambling to find ways to recruit athletes and make sure they stay.
The transfer portal makes recruiting more competitive and NIL more important. Collectives have the ability to make smaller universities lacking large NIL opportunities more attractive to athletes.
“NIL is a flawed system,” Forsythe said. “The transfer portal impacts that. That’s (the transfer portal) a flawed system. So I think that there will have to be some kind of regulation put on it, but I think it’s kind of like, you know, you’ve squeezed the toothpaste out. You can’t get it back in. It happened so quickly…It’s just a Wild Wild West right now.”
Learfield, a sports marketing company that has partnered with hundreds of colleges, handles and owns all of WKU’s athletic marketing and partnerships, acts as a form of communication between brands that want to be partners with WKU.
As the college athletic landscape has changed, Learfield has adapted.
In order for the Red Towel Trust to use WKU-associated logos such as the Red Towel or White Squirrel, the trust had to work with Learfield.
With Learfield’s help, the Red Towel Trust is now directly partnered with WKU athletics.
Depending on the level of membership a donor has, they may request personalized video calls from athletes or bi-monthly zoom calls with an athlete or coach depending on how much they donate to the trust each month.
The trust also hosts a podcast, Topper Talk, on which athletes and coaches are invited to speak.
In addition to signing memorabilia and making fan calls, the Red Towel Trust athletes are required to do a certain amount of community service hours in order to receive money promised in their contracts.
This might raise questions about incentives for community service and if being “technically” paid for community service still makes it community service.
“So for us to keep our nonprofit status. We have to provide services to nonprofits, right? So yes. Is it incentive? Yeah, of course,” Uhlenhopp said. “I mean, there’s nothing to hide behind it… But what I have noticed is guys have really taken a love to it. They’ve done more. They’ve gone above and beyond what their requirement was.”
Uhlenhopp said many of the trust’s athletes do much more than what their contract required, “Because they went to the Boys and Girls Club, developed a relationship and loved it and wanted to continue to give back so that’s been the cool thing about it,” Uhlenhopp said.
Uhlenhopp also said that the trust benefits everyone and introduces an outlook on the community for athletes. Through the collective, Wilson and Uhlenhopp believe the opportunity of NIL can impact everyone, not just the athletes. As of December 2023, the trusts’ athletes had served over 500 hours of community service.
Collectives similar to the Red Towel Trust have been popping up all over the country to directly sponsor athletes of the school with which they are affiliated. “On to Victory” for Auburn University and “For the Peayple” for Austin Peay State University are both examples of collectives similar to the Red Towel Trust.
Although NIL is legal, the NCAA still has regulations preventing coaches and universities from directly assisting in providing NIL deals and money as to avoid recruiting incentives.
“Our [WKU] coaches aren’t allowed to necessarily use the trust and collective in recruiting per se, but they’re allowed to be a component of the WKU experience,” Scott Swegan said, WKU’s head sports information director. “So you know, our athletes have a chance when they’re on campus to sign with the Red Towel Trust or other NIL partners.”
Although NIL can’t be used directly by coaches to recruit, which would be a form of bribery and therefore illegal under NCAA laws, the more opportunities and connections a school has in the NIL world, the more appealing universities look to athletes. This was part of the idea around forming the Red Towel Trust.
“(What) I would say from a recruiting, retention and student athlete interest in WKU standpoint is that collectives exist almost everywhere now, and the Red Towel Trust is certainly one component and a major component of a recruiting pitch because of the ability when you’re a WKU athlete to sign with the Red Towel Trust and it might make them money,” Swegan said.
Overall, it’s not just coaches that hustle to stay in bounds with NCAA regulations and NIL, but the universities and faculty, too.
“Our (WKU) compliance office is checking that a contract meets WKU requirements, state requirements, NCAA compliance,” Swegan said. “Not saying ‘Yeah, that’s a good contract’ or ‘No, that’s not a good contract.’ That’s for the student athlete and then either their parents or if they have somebody that they use for some of that.”
The Red Towel Trust also acts as a bridge for athletes and larger, outside brands. Some Red Towel Trust athlete appearances may begin to correlate with collective requirements.
The ultimate goal is to widen opportunities for student athletes. But, some things can become too fast paced even for athletes.
A balancing act
While fans watch with excitement as the players compete on the court or field, it’s easy to forget the elite athletes are human beings. And like any human being, there is always more going on behind the scenes.
“I’d say a lot of people in my situation haven’t really had money until probably the last couple of years,” Dontaie Allen said, a redshirt senior guard and forward for WKU Men’s Basketball. “So I get to send some of this money back home. I know that my mom has gone through a lot. So to be able to send her money really makes me feel better about myself as well as my sister and father. So I’d say it’s more for things like that.”
Allen has NIL deals with The Muse Bowling Green, Mr. B’s and the Red Towel Trust.
In a sense, it creates a job for athletes– a way to provide for themselves– when that hasn’t always been an option due to a demanding practice and season schedule.
As a professor who has many student athletes in her sports management classes and often works with WKU athletics, Forsythe has seen first hand what impact NIL has on athletes.
“They’re practicing every single day, weird times in between classes, so they literally do not have time to go out and get a job,” Forsythe said.
“So this kind of NIL deal, it’s just a relief for them to pay their rent, they can eat,” she said. “So it’s just a relief for a lot of them. It’s not flashy, ‘hey, I’ve got millions of dollars now.’ It’s just kind of like, ‘okay, I’m working hard like this is helping me’.” Forsythe said.
Typically, athletes receive compensation, merchandise and/or benefits for uploading ad-like posts for a company to their social media. In larger brand deals, athletes are compensated for making appearances in commercials or brand advertising.
“I like to spend it on my body so I can give my best on that court, which that’s what it’s about anyway,” Allen said. “You’ve got to keep the main thing, the main thing.”
Fans hear stories about international players never getting to see their families because of travel costs and the need for visas, but no one talks about U.S. economic and logistical barriers.
Allen said that players with NIL can afford to go home more often and when players can spend time with loved ones, it creates a better atmosphere in the locker room.
Before NIL, collegiate athletes’ lives were always time consuming and chaotic. Instead of a work life balance, it was more like a work-if-you-can, school, study, social, athletic life balance.
In a survey completed prior to NIL by Professor Daniel Eisenberg at the University of Michigan School of Public Health, 33% of all student athletes experience some form of mental health condition, but only 30% of them seek help.
With NIL, its athletes must deal with excess media and added responsibilities.
“There’s certain days that it can be very difficult because you have a 20 minute time slot to get to (point) A and B, and you’ve got to get across town,” Allen said. “So obviously, that makes it difficult, but I think staying consistent and being accountable (helps). To be at these places when you’ve got to be at them and make sure you get homework in on time, it can get so hard.
Allen, who formerly played for the University of Kentucky and recently entered the transfer portal again, said the Wildcats provided classes to student athletes so they could be better prepared with money management and NIL regulations
If this isn’t already a common practice at every university, there is a good chance it will be soon with how rapidly NIL is developing.
NIL: Breaking the glass ceiling or patching it back up?
Among the predicaments, NIL possibly perpetuates the gender gap in college athletics. Although it’s still early to tell the full impact of NIL on gender equity and equality, some statistics are already evident.
As of April 2024, the Red Towel Trust sponsored 35 athletes. All are players for WKU Football and Men’s Basketball. It was said at the website launch party that the trust has a goal of expanding to other WKU teams, specifically women’s athletics on the Hill.
Donors can request that their contribution goes toward athletes on a specific team. Uhlenhopp even said that there have been some donors asking to sponsor WKU Volleyball players.
According to a 2023 report by Opendorse, an NIL based company, male athletes in the NCAA took up 77.1% of all NIL compensation while female athletes made up 22.9%.
However, when football is removed, male athlete NIL compensation drops to 57.7% with female athletes rising to 42.3%.
“I’ve always been a champion for women’s sports and… I would like the same level of opportunities for the women to make as much money as the men,” Forsythe said.
Forsythe said that although women may make more NIL deals, they are still awarded less money than the men.
The Opendorse report stated that women’s sports make up for 60% of NIL activities as opposed to men’s sports with 40%, but statistically, men make more money because their fewer deals are for larger amounts.
Of the Top 10 NCAA athletes who make the most disclosed NIL money, only one is female. Louisiana State University gymnast Olivia Dunne, a senior, is ranked third at an estimated $3.7 million in NIL compensation.
Despite the growth of support and media coverage for women’s college sports, specifically basketball, the trickle down of economics may be slow until women’s professional sports see the same salaries and media coverage male sports do.
The U.S. Women’s National Soccer Team was the first on a national stage to put a crack in the athletic glass ceiling when they won a lawsuit against the U.S. Soccer Federation for equal pay in 2022.
The women won a total of $24 million in the lawsuit with promises of an equal rate of pay between the men’s and women’s national teams from the federation moving forward. The U.S Women’s National Soccer Team has four world cups while the U.S. Men’s National Soccer Team has zero.
On the collegiate level, take for example, WKU Volleyball. It is the winningest team on the Hill, but has yet to see many NIL contracts. The team has eight NCAA Tournament appearances, seven regular season wins and two East Division victories.
“But my hope would be that alumni and business owners will see the value in the student athletes who are women as well and what they can do for their products,” Forsythe said.
Several female basketball players such as Clark and LSU forward Angel Reese were encouraged to play an extra year because they would make more in NIL deals than in their WNBA contracts.
Clark made an estimated $3.1 million in NIL compared to her WNBA Indiana Fever contract of four years for $338,056. Reese’s NIL value during her time in college was an estimated $1.8 compared to her WNBA Chicago Sky contract of $324,383 for four years. Both player’s jerseys sold out within days of the WNBA draft.
Currently, most NIL deals are non-disclosure agreements, which makes NIL estimations and impact difficult to fully place. This may create a new battle in the coming years of NIL as universities, organizations and critics may call for contracts to be public information.
Additionally, federal agencies and courts are now taking a closer look at non-disclosures.
Economics, education and expectations
Athletes everywhere are electing to stay in college longer because NIL benefits often outweigh professional expectations. For example, Arch Manning, redshirt freshman quarterback for the University of Texas is estimated at $2.8 million in NIL deals, which is nearly three times Brock Purdy’s annual salary, the San Francisco 49ers quarterback.
But who advocates for the athletes in this media and money frenzy? That is what critics of NIL have been asking.
It isn’t a new question, but a more pressing one since 2021.
Uhlenhopp said that WKU has shared resources to help guide athletes to make sure contracts are not “one-sided.” However, the majority of contract negotiation is left up to the athlete and whomever they choose to oversee it, whether that be family, a lawyer or trusted advisor.
WKU has also launched an NIL store where fans can buy merchandise with athletes’ names. Athletes receive a percentage of sales.
“I think WKU athletics has changed out of necessity because college sport is a business and if you’re not keeping up with competitors, or the business you’re not going to be successful, getting recruits having successful programs,” Forsythe said. “So I think college sports as a whole has shifted, which has necessitated changes all over college athletics.”
With so many NIL opportunities and more to come, the fear that college sports will end up being just another mirror of professional sports may come to fruition.
On the other hand, student athletes have a better way of supporting themselves in college.
The Red Towel Trust is still in its early stages and it may have kept WKU in the NIL sprint.
However, the game of NIL is also a new one, and the NCAA may yet lose more power over the regulation of NIL deals which could either spur more chaos or more interesting competition in the collegiate world.
“If you look at what’s happening with the Power 5 schools, specifically with football, I mean, I think the NCAA will look very different in five years than it does now,” Forsythe said. “I mean, there’s no way to tell what it will look like or how fast it will change. Schools like WKU, where you’re mid-major, super competitive and successful athletically, but our media market kind of limits us with with conference realignment type stuff because we don’t have a good media market here.”
As WKU Basketball made its first March Madness appearance in 11 years in 2024, the Red Towel Trust and NIL may have more of an impact than people anticipated. With a successful volleyball, softball and women’s golf team, opportunities for the collective and NIL seeking businesses to capitalize on WKU athletics are ample.
“We can impact NIL and a roster more quickly here (at WKU) than a lot of other places in the country, so let’s not lose sight of that,” Wilson said. “I appreciate what we have and what we’ve done, but we need to continue to grow and be great.”