$5 Million Question: Is NIL Breaking the University Model?

Originally published on Substack.

As a proud Texas Tech alumnus, it was a fun season to watch college football.

The Red Raiders finished the regular season 12-1 and ranked No. 4, won the Big XII, earned a College Football Playoff bye, and reached the quarterfinals before falling 23–0 to Oregon—a tough, physical team that exposed the remaining gap at the very top.

Even so, it was the strongest season in program history, and I enjoyed watching it.
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But beneath the excitement sits a deeper issue that college sports—and universities themselves—can’t afford to ignore.
Texas Tech reportedly landed former University of Cincinnati quarterback Brendan Sorsby through an NIL package approaching $5 million, which would be more than many NFL players receive.

This deal is celebrated loudly enough to be displayed in Times Square and covered widely by CBS Sports and ESPN, as Texas Tech alumnus, billionaire oil entrepreneur, and former college football player noted recently on X.

That moment captured something important: NIL is no longer about name, image, and likeness. It’s about payrolls.
And public universities are the platform.

Athletes Were Already Paid—Just Differently

Before NIL, college athletes were not unpaid. They were compensated primarily through athletic scholarships, often worth $40,000–$80,000 per year, covering tuition, housing, meals, medical care, and academic support.

That compensation came with risk, yes—but it was voluntary. Athletes chose to participate knowing the tradeoff: education, exposure, and a chance at a professional career.

There was also a widely acknowledged black market, where under-the-table payments distorted incentives and rewarded opacity. NIL was supposed to fix that by recognizing athletes’ property rights and bringing transactions into the open.

That intention was sound.

The results so far are not.

What NIL Has Become in Practice

Today, NIL largely operates through:
• Booster-funded collectives
• Front-loaded payments tied to roster spots
• Transfer-portal inducements
• Annual renegotiation cycles

Texas Tech now fields one of the most expensive rosters in college football, backed largely by alum Cody Campbell. Critics say the Red Raiders “bought” their roster. Campbell says he’s supporting his alma mater. Both can be true.

But the structure matters more than the personalities.

Universities insist NIL deals are “separate.” But that separation is largely legal fiction. Schools still provide the brand, facilities, media exposure, compliance infrastructure, and institutional legitimacy that make NIL valuable in the first place.

That makes NIL a public-private hybrid—and hybrids often generate perverse incentives.

Spending and Rankings Are No Accident

Across college football, the correlation is increasingly clear:
• Top programs deploy $15–25 million annually in football NIL
• Elite quarterbacks command $3–8 million per year
• Roster stability depends on year-to-year bidding, not development

That’s why thousands of players flooded the transfer portal immediately after the regular season ended. Loyalty has been replaced by arbitrage.

From an economic standpoint, this outcome was predictable.

Who Pays the Price?

Here’s the key question most NIL debates avoid:

Why are public universities socializing the costs of professional-level football for short-term gains?

Even when NIL dollars are technically private, public universities still incur real costs:
• Administrative time and legal exposure
• Brand dilution and political scrutiny
• Pressure on non-revenue sports
• Mission drift away from academics

These are opportunity costs. Every dollar and hour spent managing NIL ecosystems is one not spent on teaching, research, or student formation—the core purpose of a university.
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As The Economist recently noted, college sports has become a $19 billion industry paying its workforce, without resolving the institutional contradictions that payment creates.​

This Is Not Market Failure

There is no market failure here.

The failure is forcing professional sports dynamics into public institutions that cannot fail, cannot exit, and cannot price risk like businesses. That’s why calls for Congress to intervene in college athletics are already growing.

Once federal regulation enters, markets will likely disappear and worse cartelization problem will follow.

A Cleaner Market Alternative

If donors want to fund professional football—and clearly many do—the honest solution is simple:

Create minor league teams.

Let them pay players directly, bear financial risk, compete openly, and fail if they misallocate capital. That’s capitalism.

What we have now is private money shielded by public universities, which is neither free-market nor sustainable.

Bottom Line

I enjoyed this Texas Tech season. I’m proud of the players, the coaches, and the program.

But universities exist to educate, not to operate permanent bidding wars for athletic talent.

The $5 million Brendan Sorsby deal isn’t just a headline—it’s a warning sign.
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If NIL continues on its current path, it won’t just reshape college sports. It risks hollowing out the academic mission that made these institutions worth supporting in the first place.