Start Here: How NIL Arbitrage Works
Where NIL Meets Market Value
If you’re new here, this is the two-minute version of what this newsletter does. No background reading required. Once you’ve got this, you can follow any post on the site.
What this newsletter does
NIL Arbitrage looks at the money in college sports and asks a simple question: Is this player actually worth what they’re being paid?
Since 2021, college athletes have been able to earn money from their name, image, and likeness, which is commonly referred to as NIL. The deals have gotten huge. Quarterbacks are signing for millions. But almost nobody is checking whether those numbers make sense. That’s what I do here. Every post takes a real deal, runs the numbers, and tells you whether the player is fairly paid, overpaid, or underpaid, and why.
The name comes from finance. Arbitrage is what you call it when something is priced incorrectly in a market, and there’s money to be made from the price discrepancy. College sports are full of those gaps right now because the NIL market is brand new, and nobody has figured out how to price players correctly yet. This newsletter finds the gaps.
How I figure out what a player is worth
I built a model. In plain terms, a model is just a formula that has learned from a lot of real examples. I fed it data on dozens of college football players, what they did on the field, how famous they are, what conference they play in, how good their team is, and what they actually got paid. The model learned the patterns. Now I can show it to a new player, and it tells me what someone like that usually earns.
That gives me an expected number. Then I compare it to what the player actually signed for. If the deal is close to the expected number, the market got it about right. If the deal is way bigger than expected, that’s an inefficiency, a gap between what the player produces and what they’re paid. Those gaps are the whole point. They tell you where the market is paying for something other than on-field performance, usually hype, fame, or a school just wanting to win badly enough to overpay.
The one surprising thing the model found
Here’s the finding that shapes most of what I write: college sports pays more for visibility than for production. Being famous, playing quarterback, and going to a big-brand school all drive a player’s price more than how well they actually play. A solid quarterback at a school that wants a splash can earn more than a better quarterback nobody’s heard of. That’s not necessarily wrong, but it means a lot of these deals are bets on attention, not on football. When you see me say a deal is overpriced, that’s usually what’s going on underneath.
How to read a typical post
Most posts follow the same structure. I start with a real deal in the news. I tell you what the player actually produced on the field. I tell you what the model expected them to earn. Then I show you the gap and explain what’s driving it, whether that’s the player’s fame, the school’s situation, the state’s NIL rules, or the structure of the contract itself. You don’t need to understand the math to follow the argument. The numbers are there to support the story, not to be homework.
Want to see all of this in action? My breakdown of Darian Mensah’s $10 million deal at Miami walks through every step, from his production to what the model expected him to earn to the gap in between. It’s the clearest example of how the whole approach works, and a good place to go next.
If you want to go deeper
Everything here is built on real research. If you want to see exactly how the model works, the data behind it, and the statistics, I’ve published two papers that lay it all out. You don’t need them to enjoy the newsletter, but they’re there if you’re the kind of person who wants to check the work. Both are linked below.
That’s it. You’re caught up. Welcome to NIL Arbitrage.
The research behind the model
The full methodology is in my professional report, NIL Market Inefficiency: How Restrictive State NIL Laws Improve Compensation Efficiency in College Football (linked here). For the regulatory and legal side, see The NIL Race to Regulation (linked here). For the Mensah Math (linked here).