Nike and Adidas are channeling Name, Image, Likeness payments to athletes at major college programs through mechanisms that sit inside equipment contracts but function as direct athlete compensation, according to a USA Today investigation published this week. The payments, which sources familiar with the arrangements estimate exceed $10 million annually across marquee programs, move through third-party collectives and affiliated marketing entities that apparel companies fund as part of broader institutional sponsorships.

The structure works like this: Nike or Adidas signs or renews a multi-year deal with a university athletic department—amounts typically ranging from $3 million to $10 million per year for Power Five programs. Buried in those agreements are provisions directing a portion of the total spend toward "athlete marketing initiatives" or "brand ambassador programs" managed by school-affiliated collectives. The collective then distributes NIL payments to individual athletes, often the starting quarterback or five-star basketball recruit, with apparel company branding requirements attached. The athlete posts content wearing Nike or Adidas gear, appears at brand events during official university functions, and the payment flows through the collective's 501(c)(3) or LLC structure. The university athletic department never touches the athlete payment directly, which keeps the transaction outside traditional NCAA amateurism rules that have been dismantled but still govern institutional involvement in NIL.

This matters because it solves two problems simultaneously. For Nike and Adidas, direct NIL deals with college athletes remain complicated—signing a freshman before he plays a down exposes the company to public relations risk and NCAA scrutiny over inducements. Routing the same money through an equipment deal attached to the university provides cover. The university benefits because the collective secures funding without relying entirely on booster donations, which have proven volatile. Miami's deal with Adidas, for example, restructured in 2023 to include explicit collective funding after the program struggled to meet early NIL commitments to recruits. Oregon's Nike relationship, worth roughly $88 million over eleven years, now includes similar provisions that weren't present in the original 2019 contract.

Compliance offices are aware but constrained. The NCAA's interim NIL policy permits collectives to engage with athletes, and it permits universities to facilitate introductions between athletes and third-party entities. What the policy doesn't clearly address is whether apparel money routed through a university contract into a collective constitutes institutional involvement in NIL. Legal counsel at multiple Power Five programs told USA Today they interpret the arrangement as permissible because the collective, not the university, contracts directly with the athlete. That interpretation stretches, but it holds as long as the NCAA enforcement staff remains focused on more obvious violations like coaches directly negotiating NIL deals during recruiting visits.

The financial scale is already visible in public filings. Collectives affiliated with Alabama, Texas, and Ohio State reported revenue increases of 30% to 50% in fiscal 2023, with apparel company contributions listed under "corporate partnerships" in their Form 990 disclosures. Those same collectives now list apparel company executives on their advisory boards. At Texas, a collective board member is a Nike regional VP. At Miami, Adidas's senior director of sports marketing sits on the collective's fundraising committee. The USA Today investigation notes that no single payment to an athlete from these arrangements has been publicly disclosed, but sources estimate that starting quarterbacks at programs with embedded apparel funding receive between $200,000 and $500,000 annually, structured as monthly payments over the academic year.

What to watch: The NCAA's governance structure is moving toward a formal revenue-sharing model that would permit schools to pay athletes directly, with a proposed cap near $20 million per school per year. If that model passes in early 2025, apparel companies will need to decide whether to maintain collective funding or shift dollars into direct institutional payments, which would require renegotiating existing contracts. Also, Senate NIL legislation currently in draft form would require disclosure of payments over $50,000, which would make these arrangements public for the first time. Expect apparel companies to lobby for carve-outs that classify their payments as marketing spend rather than NIL compensation.

The Miami-Adidas relationship demonstrates the long-term strategy. Adidas has supplied Miami's athletic department since 2015, and the current contract runs through 2027 at roughly $6 million annually. The deal was extended and restructured in 2023 specifically to include collective funding after Miami's NIL collective, Life Wallet, collapsed when its founder, John Ruiz, faced SEC scrutiny over his SPAC dealings. Adidas stepped in with incremental funding routed through a new collective structure, keeping Miami competitive in recruiting without the university violating institutional involvement rules. The arrangement is now a template for other programs facing similar funding gaps. Nike is deploying the same structure at Oregon, Texas, and Alabama. The blue bloods keep their NIL edge, the apparel companies keep their campus grip, and the compliance memo stays short.