Nike and Adidas have built parallel infrastructure to deliver Name, Image, Likeness payments to athletes at marquee programs through sponsorship vehicles that optimize tax treatment and preserve the fiction of brand-athlete relationships unconnected to recruiting. The arrangements, detailed in financial filings reviewed by USA Today, typically route payments through program-affiliated collectives or celebrity-fronted endorsement platforms rather than direct athlete contracts.
The clearest example surfaced last week when Kevin Durant announced a Nike-backed NIL program for University of Texas basketball players. The structure: Nike funds Durant's Boardroom media company, which then sponsors Texas athletes through a newly created entity that carries the Longhorn brand. The athletes receive $25,000 to $75,000 annually depending on playing time and social media reach. Nike's logo appears in athlete content, but the company maintains no direct contractual relationship with players still competing under NCAA rules. Texas signed a $250 million apparel extension with Nike in 2021 that included language about "supporting student-athlete initiatives," a clause that now appears in most Power Five deals.
The financial engineering matters because direct recruiting inducements remain NCAA violations, even after NIL legalization. By routing payments through third parties—collectives, media companies, local dealerships owned by boosters—apparel brands create distance while ensuring their logos reach the highest-value athletes. One SEC compliance director, speaking anonymously, described the arrangements as "technically permissive but structurally obvious." An Adidas-backed collective at a Big Ten program pays $40,000 per year to starting football players in exchange for four social media posts and one autograph session. Adidas does not appear on the collective's tax filings, but three of the collective's five board members are current or former Adidas executives.
The tax optimization works both ways. Apparel brands classify NIL payments as marketing expenses, fully deductible. Athletes, meanwhile, often receive payments through LLCs that allow income smoothing and retirement contributions typically unavailable to W-2 employees. One agent representing five first-round NBA draft prospects said his clients' collegiate NIL entities now carry forward into their professional careers, creating continuity for endorsement income and estate planning. The LLCs also shield athletes from direct association with collectives whose funding sources might include boosters later sanctioned by the NCAA.
What makes the system durable is that everyone benefits except the schools theoretically competing on level recruiting ground. Nike and Adidas concentrate spending on programs already wearing their apparel, reinforcing existing relationships. Blue-blood programs attract better players without technically paying them. Athletes receive payments structured for tax efficiency. The only losers are mid-major programs without apparel deals large enough to fund parallel NIL infrastructure. A Conference USA athletic director said his school's $500,000 annual Adidas deal leaves "maybe $30,000" for NIL support after equipment and travel allotments.
The Durant-Texas arrangement will test whether celebrity intermediaries inoculate brands from future NIL restrictions. If the NCAA or Congress eventually caps collective spending, celebrity-fronted platforms might argue they exist independent of school influence. Durant's Boardroom already manages endorsement deals for 40-plus professional athletes across multiple sports, giving it plausible commercial purpose beyond funneling money to Texas basketball players. That same structure—celebrity name, media company, program-specific initiative—appears in nascent form at a dozen other programs, with involvement from current and former athletes whose professional endorsement deals coincidentally align with their alma maters' apparel partners.
The compliance risk lives in the gap between structure and intent. NIL was sold as compensation for athletes' commercial value, but these vehicles deliver the highest payments to athletes at programs with the most valuable apparel contracts, not athletes with the most valuable personal brands. A backup offensive lineman at a Nike school receives more than a starting quarterback at a mid-major under Adidas. The correlation between apparel deal size and NIL payment volume across Power Five programs exceeds 0.85 in data compiled by Sportico.
Watch for two inflection points in the next six months. First, whether the NCAA's new enforcement staff targets collectives with clear apparel-brand funding, testing the third-party distance theory. Second, whether celebrity-fronted platforms proliferate beyond basketball and football into Olympic sports, where apparel brands hold more direct influence. Adidas already sponsors 200-plus individual track and field athletes professionally; extending that model to college rosters would cost roughly $15 million annually and eliminate any pretense that NIL reflects market value.
The Durant announcement landed the same week USA Today published its investigation, a timing coincidence that one conference commissioner described as "not a coincidence." Nike was announcing a structured vehicle the day a major outlet was explaining how structured vehicles work. The transparency is the point. The system functions in daylight because no rule explicitly prohibits it, and the entities with authority to write such rules—university presidents, conference commissioners, the NCAA—also cash the apparel checks.
The next shoe deal up for renewal is Ohio State's with Nike, currently $252 million over 15 years. Expect language about "student-athlete support initiatives" to appear in bullet points, and expect those initiatives to route through Ohio State-affiliated entities bearing names of former players now signed to Nike professionally. The template is set. The only question is how many programs can afford to use it.