Expanding the College Football Playoff Amidst the NIL Era

With news that the College Football Playoff Board of Managers approved a study to see how feasible a 12-team playoff would be, the question arises: how will the new Name, Image, and Likeness laws affect the CFP?

To start, let’s talk about the current CFP operation: there have only been four teams in the playoffs since the CFP started in 2014. Increasing the number of teams will likely increase viewership of the CFP, since many fans have been demanding an expansion to the original four-team practice. Twelve teams may not be the magic number that works, but an expansion is widely desired regardless. The ESPN and CFP contract currently averages $600 million every season. However, the suspected value of a 12-team playoff lies around approximately $1-2 billion per year. Now, NIL is coming into play.

On July 1st, 11 states enacted NIL laws, joining Pennsylvania, who immediately granted NIL rights on June 30th. Oklahoma and Nebraska also enacted NIL laws, but where schools could give NIL rights immediately, but must do so before July 1st, 2023. Two more states, Arizona and Connecticut, are to enact NIL by the end of 2021. Since then, college athletes have already started announcing signed partnership agreements. Around the same time, the NCAA’s Board of Directors officially suspended the organization’s name, image, and likeness rules prohibiting athletes’ rights, and have created interim rules in its stead. State NIL laws vary, but the NCAA’s rules will now allow athletes to profit from their NIL in numerous ways, such as monetizing their social media accounts, signing partnership agreements, starting businesses, etc. Schools in NIL states are to follow their state’s law when dictating what their athletes are allowed to do. This comes into play especially with sports betting since states, like Texas (enacted NIL July 1st) still ban any type of gambling in the state. Schools in states without enacted NIL law are instructed to create policies on how their athletes will be affected by NIL.

Since not all states have enacted NIL laws, we may see a large wave of transfers in the next coming years, as well as an even more competitive recruitment. Such a substantial number of transfers can drastically change a team’s dynamic, and the schools in NIL states, especially those with added NIL programs, will likely see better recruitment classes. An athlete whose school reaches the playoffs receives more airtime, and in turn, the bigger their brand and name becomes. Athletes can then receive higher earnings from their partnerships by playing in these playoff games. Athletes may also be more likely to stay in school longer in order to earn more money from partnerships. More teams in the playoffs would equal more players, and inevitably, more players with partnerships.

Many of the schools who constantly dominate the CFP and repeatedly rank in the Top 25 are located in NIL states, like Alabama, Georgia, and Ohio. This makes them even more popular for incoming recruits and transfers. Will this create the uneven playing field that the NCAA was afraid of? Or really, does it just maintain the “norms” we see of the same teams competing for the championship every year?

The expansion is meant to broaden the opportunities for more schools to feel the CFP spotlight, and with that, allow student-athletes to earn more from their name, image, and likeness rights. An expansion of the CFP is extremely likely with the amount of revenue that is almost guaranteed to follow. However, the expanded number of teams is still questionable. The CFP feasibility study is expected to be delivered near the end of summer, possibly at their September meeting. The expansion will likely bring substantially more revenue, but the question of how much NIL will affect the CFP is less clear.