University of Calipari will be the biggest winner of the NIL era

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Arkansas is a small state with 3 million people, and NIL is all about student athletes' marketability to large, valuable audiences. So, why would the UofA win?

1) Collegiate sports compete for similar dollars with professional sports for audience attention and spending. Pro leagues generated $6.7bn in sponsorship sales in 2023, according to SponsorUnited. However, college sports fans, on average, are more loyal and earn higher incomes than professional sports fans. Since Arkansas doesn’t have major league sports, Arkansans invest their sports entertainment time and money into Razorback athletics, so it benefits from the best of both worlds.

2) Arkansas is only 1 of 3 schools in the Power 5 conferences that has one school in the state and no major league teams. The other two schools are Nebraska and West Virginia. Although powerhouse schools like Alabama, Texas, and Ohio State have historically generated more revenue by winning games, they compete for market share with other teams in their regions. So, three schools have market monopolies on sponsor revenue that no other programs have.

3) Arkansas is in the SEC, a conference that historically dominates football, baseball, track, and, increasingly, basketball. In 2022, the conference generated $802m in media revenue, second only to the Big 10 with $845m. This means that Arkansas athletes have national visibility by playing on the biggest stage, and they will accrue more followers as individuals.

4) UofA is in NW Arkansas, where the Walton, Tyson, Hunt, and a few dozen other high-net-worth families are investing billions to raise the region’s national profile to attract talented residents. Good sports teams are an effective way to market the area, so we’re beginning to see those families deploy capital to attract athletes. Exhibit A: John Tyson funding John Calipari’s salary and NIL budget.

5) Walmart, the world’s largest retailer, is headquartered in NW Arkansas, which has led to the top 300+ consumer packaged goods (CPG) companies having big corporate offices here. CPG companies that sell products in Walmart are the same companies that often pay professional athletes to endorse their brands. We’ve yet to see CPGs make significant investments in collegiate athletes. Still, it's only a matter of time before they figure out the ROI opportunities, and when that happens, Arkansas will be one of the most accessible places to make those deals happen.

So, in conclusion, these inherent dynamics will give Arkansas an advantage in recruiting that few other schools have, ultimately becoming more competitive across all major sports. We saw this play out with John Calipari leaving Kentucky to become Arkansas’s head basketball coach and the rush of talented players that followed suit. This will happen in other sports, too. In effect, the program will win more competitions to create a self-reinforcing loop that will lead to Arkansas becoming one of, if not the most, successful athletic programs in the post-NIL era.

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