NIL Meets AI To Shape The Future Of College Sports

The last few years have brought about a financial revolution in the business of college sports – especially football and basketball. And this economic revolution is intersecting with AI, our most explosive technological revolution maybe ever.

I spent some time with the founder of a just-launched company named Cache AI that is looking to insert itself into the middle of the college sports business maelstrom. Remember when universities used to brag about the graduation rates of their student athletes? As Dorothy might metaphorically say to Toto: “I’ve a feeling we’re not in Kansas anymore.” Or maybe we are.

The broadest driver of money in the college system is of course TV – linear and streaming, which craves live sports above all other content. All TV rights for college athletics totaled $1.9 billion in 2009, and $4.2 billion by 2022. And since then? In 2023 the Big Ten conference alone signed new rights deals for football with Fox, NBC and CBS that will in total bring over $1 billion a year to its member universities, more than double the prior deals. And in January 2024, ESPN extended its exclusive rights to the College Football Playoff, committing $1.3 billion per year through 2031, nearly three times what it paid under its prior deal.

Despite this seemingly endless money windfall, for athletes to be able to share in it they needed the U.S. Supreme Court. Who would have thought? In June 2021 the Court ruled that the NCAA could not bar payment of student athletes for their NIL (name, image and likeness) rights in marketing and promotion. A tsunami of payments to jocks followed, mostly by unregulated “collectives” (read: alumni boosters), with a few of the most eye-raising being the $6.5 million paid to Arch Manning, quarterback at the University of Texas and $4.1 million to Livvy Dunne, the LSU gymnast.

A new “system” for doling out these NIL payments has emerged just this month with the settlement of several antitrust suits brought by college athletes against the National College Athletic Association and the most powerful sports-oriented conferences and universities. In that settlement, athletes who competed over the last 10 years will receive nearly $2.8 billion for “back pay” from the NCAA. Beginning in 2025-26, each Division 1 school can pay its athletes up $20.5 million, an amount that will increase every year during the decade-long deal. But this deal hardly “solves” the NIL issue for athletes and universities. In many ways, it just restarts it.

Young athletes and their families if they are lucky have before them huge opportunities for monetizing their talents with brands and universities. But the NIL market today has little transparency for most athletes. The new NCAA settlement will create what it calls the “NIL Go Clearinghouse” to be run by Deloitte and which will determine if any NIL deal above $600 is for “valid business purposes” and represents “fair market value.” But good luck trying to figure out how this will work.

Putting aside the potential antitrust implications of universities that compete with each other creating a system to limit athlete compensation (but stay tuned there), there is no standard means of comparing the monetary value of athletes within and across sports, schools, conferences and brands. What is a “fair” value in the marketplace and how does anyone trust how to evaluate that? Into this breach comes the new kid on the block, Cache AI.

The company has built what it calls “the valuation intelligence engine for the talent economy.” As the company’s founder Kobi Wu told me, “Everyone [in college athletics] is thinking about ticket sales and money, but not about the players. We are all about the athletes.” Wu shared a conversation she had with a major college athletic director who told her “So you’re going to help athletes negotiate against me?” To which Wu responded – absolutely – what’s wrong with that?

Noting that schools and brands have as much incentive as athletes to properly estimate marketplace value, Cache AI is working through schools and universities to sign up student athletes and their families. Students will enter data at their discretion in areas such as on-field performance statistics, how their values align with brands, and their “community influence, reputation and visibility” including verifiable information from community service to grades to social media metrics. Since getting this to work demands some student homework, Wu joked that “kids like us, but families love us.”

The company hopes that their platform will become “the trusted standard for evaluating talent impact.” As the output of the input of thousands of athletes and millions of public data points, athletes receive a “CacheScore” (note the double entendre here) that provides a real-time standardized metric of relative marketability. In addition, the engine will provide a metric it calls “CacheValue” to predict future marketplace value.

The company went live with its app in just the last week. According to Wu, it already has over 2000 active student athletes, with 17,000 more in the queue. It’s goal it to get to 50,000 students by year-end and Wu told me that 100,000 is not out of the question. The service is free for students, and its revenues will come from seat licenses from corporate clients such as universities and brands. The company’s recruitment efforts start early, with high schools and athletes who want to assess their value as they enter the NIL world. And if you think that sounds young, I attended an event last week where several companies pitched their tech platforms for parents of kids as young as seven to track their on-field performance. Look out for pre-natal sports testing next.

As with any early-stage company, it takes a small village to make this work. The core team for Cache AI, in addition to Wu, includes data scientist Dr. Kruti Lehenbauer, former college athlete and sports marketer Laura Waters-Brown and ex-Google engineering exec Chris Johnson. The company is still in early days, with a small group of angel investors and early bootstrapping, and now out raising its Series A funding. There are many rivers to cross on the journey ahead.

Unquestionably Cache AI is onto something, but of course it is hardly the first to spy opportunity in the mix of sports, media, AI, and technology. Teamworks, which bills itself as “the operating system for sports,” just raised $235 million, with a valuation of $1 billion. Opendorse is out there with a platform for student athletes that looks like a combination of an influencer marketing agency and Cameo. In the NIL world, we’ve only just begun.