While it seems implausible, college football now thrives on market competition, while the NFL operates as a cronyist cartel.
University of Alabama / Wikimedia Commons
American football was long propped up by elite college players who labored under an implicit bargain. They played at deeply subsidized rates—generating millions in value for universities, conferences, broadcasters, and apparel companies—in exchange for the hope of future riches. College football was the apprenticeship; the NFL was where you finally got paid.
That model has now been disrupted. With the rise of Name, Image, and Likeness (NIL) compensation, college players collect large enough sums to force a question that would have sounded absurd five years ago: could playing college ball become more lucrative than jumping early to the NFL? If that becomes the case, it will be another example of the wealth-generating effects from market competition over protectionist industry.
NIL compensation does not mean that universities directly pay players salaries as NFL teams do. Instead, players are paid by third parties—collectives, sponsors, local businesses, national brands, and alumni donors—who compensate them for various loosely-defined marketing services. In practice, NIL collectives funnel money from fans to players, in order to attract and retain talent. The stated reason is “marketing” but the true reason is recruiting.
In July of 2025, following the House v. NCAA class-action settlement, a U.S. district court judge determined that colleges could opt-in to paying their athletes, with a $20 million total per-school cap for the 2025-26 school year, and gradual increases over the next 10 years.
However, this new payment structure—third-party NIL deals plus direct payment from schools—is still not subject to traditional constraints like salary caps, conference rules, or NCAA enforcement. NIL lives outside the old command-and-control structure of college athletics. It is decentralized, competitive, and uncapped.
This still hasn’t led to higher pay than the NFL. Pro contracts remain vastly larger on average, and annual NFL revenue is much higher than all of Division I college football. The average NFL team payroll is roughly $275 million per year, with top stars such as Patrick Mahomes earning $45 million annually. High-profile quarterbacks at major college programs routinely command NIL deals of between $2–5 million per year.
But once you examine the organizational models behind each system—college football’s increasingly open market versus the NFL’s tightly regulated cartel—narrowing this gap no longer sounds preposterous.
NIL is, as critics like to sneer, a “Wild West.” But that’s not a bug—it’s the feature. The lack of constraints means that players are worth exactly what someone is willing to pay. Combine that with three realities unique to college football:
Fan passion is unmatched. Loyalty is inherited, regional, tribal, and often irrational in a way professional fandom rarely is.
Donor bases are obscenely wealthy. Many major programs draw support from billionaires, centi-millionaires, or just a vast alumni base of millionaires, all of whom are fixated on seeing their program win.
There are many major programs. 50-100 schools could plausibly compete at the highest level, given their student body size and brand recognition. This means that money flows across many centers of power rather than pooling in one league office.
We’ve already seen this play out. Three of this season’s top playoff entrants had highly specific money sources – Texas Tech’s was oil; Oregon’s was Nike money; and Indiana, which went from long-time mediocrity to sudden champion, had support from a singular billionaire alumnus, Mark Cuban. The playoff field increasingly reflects financial power as much as coaching acumen.
In that environment, an arms race is inevitable. As long as players can move freely and donors can outbid one another to attract them, pay will rise. Unlike the NFL, there is nothing structurally stopping that escalation.
The NFL’s pay structure, by contrast, is intentionally anti-market.
The league is governed by 32 owners who operate as a cartel, protected by antitrust exemptions and political favoritism (such as stadium subsidies). Salary caps limit what teams can pay players, regardless of how much revenue they generate. Revenue sharing from TV deals ensures that even poorly run franchises remain profitable.
The stated justification is “competitive balance.” Without caps, the argument goes, small-market teams couldn’t compete with New York or Los Angeles.
But the real effect is simpler: it caps player compensation, especially for stars. Patrick Mahomes generates far more value for the Chiefs—and the league—than he is allowed to capture.
Unionization reinforces this structure. Minimum salaries and roster requirements sound player-friendly, but they also force stars to subsidize role players. When a quarterback “takes a team-friendly deal,” it’s framed as selflessness, but really just protects owners from having to pay true market rates.
NIL flips that logic. Stars get paid what they’re worth; most everyone else gets a scholarship and little to nothing more.
Even if NIL never causes college stars to out-earn NFL ones, it’s already changing behavior.
Players are staying in school longer because the opportunity cost of waiting has disappeared. University of Miami quarterback Carson Beck returned to college despite being an NFL prospect, reportedly because his $4 million NIL compensation exceeded what he would have earned as an NFL rookie. Similar dynamics are emerging in college basketball, where stars like Hunter Dickinson transferred and stayed for two years at Kansas, where he reportedly earned higher annual pay than during his later NBA tenure. The longer that talent stays in college, the more valuable the NCAA’s product becomes—and the more money that flows into NIL.
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For all its messiness, NIL feels deeply American.
Young people with rare, valuable skills—many from tough backgrounds—earn life-changing money. Fans directly fund the teams they love rather than watching outcomes dictated by league rules and offices.
Yes, NIL could use guardrails. Longer-term contracts would reduce the annual off-season chaos of the transfer portal. But the core principle is sound, and also ironic: for decades, college campuses preached socialism while exploiting unpaid labor, not just in college athletics, but across much of their student body. Now they’re hosting one of the more notable capitalist experiments in modern sports.