Sports technology company Opendorse and school marketing and event management company Collegiate Sports Management Group have struck a deal that sets the stage for some 250 colleges and tens of thousands of athletes to participate in Name, Image and Likeness (NIL) activities.
The two companies will announce later today that they have inked an agreement wherein Opendorse Deals will be the technology platform to enable endorsement agreements through Collegiate Sports Management Group, which is the multimedia rights holder for throngs of colleges and universities, mainly from mid-tier Division I down through DII, DIII and into community colleges.
“We create demand with brands, or brands already engaged with Opendorse, so athletes don’t have to go out and pitch themselves locally, regionally or nationally, and also be on the up-and-up from a compliance standpoint,” Ray Katz, chief operating officer of Collegiate Sports Management Group, said in a phone call. “There’s an advantage on the compliance standpoint and from getting exposed to brands [for deals] they would never get exposed to on their own.”
Since the NCAA is still weighing its NIL guidelines, the Opendorse-CSMG partnership initially will begin operation as a platform to strike endorsement deals for the alumni athletes of participating CMSG schools, as well as for CSMG’s roster of esports schools. Four-year college esports are regulated by the East Coast Athletic Conference while two-year schools are regulated by the National Junior College Athletic Association, both CSMG clients permitting professional esports activities. NIL for current college athletes is inevitable, however, with the NCAA rules to be set as early as July. That means about 500,000 student-athletes will be permitted to strike endorsement deals sometime next year—about 100,000 of whom will be covered by CSMG clients.
“CSMG is first to sign on with Opendorse as their partners, but we expect others will follow,” said Blake Lawrence, CEO of Opendorse, in a phone interview. “The leaders in multimedia rights in college sports will need a solution that allows them to help sponsors activate athletes once these rules change.”
Opendorse was co-founded by Lawrence, a former Nebraska football player, in 2012. The company already services 25,000 athletes through deals with the players associations of the NBA, NFL, NHL, MLB and the PGA Tour as well as more than 100 college programs. CSMG is a six-year-old firm specializing in multimedia rights and revenue generation for educational institutions, counting 22 conferences and more than 250 college and 560 community colleges as clients. “We had a fantastic time working out the details of a complicated deal with multiple levels of compensation to make sure our two companies are aligned from a success standpoint,” added Katz.
The Opendorse-CSMG deal is significant in the developing NIL space because both Lawrence and Katz say the majority of opportunities and revenue from NIL will be local, as small and regional businesses seek to reach the social media followers of lesser-known athletes who are “local heroes.” Under expected NIL guidelines, students will be contractors striking their own endorsement deals. While schools won’t broker the deals, they generally are shifting to provide a deal-brokering platform so their athletes can remain within expected compliance requirements. For larger schools, the potential NIL revenue is also already a recruiting tool.
“The fact is, the student-athletes can leverage new technologies to establish an audience they can monetize online and rely on their own work ethic to attract sponsors. It doesn’t take a lot of money to make an impact on a student-athlete’s livelihood at any level of sports,” Lawrence said.
CSMG will be expanding its sales staff to generate sponsorship opportunities for athletes. The company has additional capital thanks to closing a multimillion-dollar round of venture funding last month led by Generation Capital, an arm of Canada’s billionaire Thomson family (best known for controlling Reuters). Family member David Thomson is also owner of the NHL’s Winnipeg Jets.
(This story has corrected the name of Opendorse CEO Blake Lawrence throughout.)