Is NIL a "Ridiculous Free-for-All"?

Or is it a market that gives buyers and sellers opportunities?

Scrolling through ESPN, I saw the following headline:

The NCAA loosened the restrictions on athletes earning money and the transfer portal a few years ago. From that, a market system is emerging. Thousands of football players are in the transfer portal right now and going to teams that are either bidding the highest for their services or providing the best overall fit (combining compensation and opportunities).

See the ESPN reporter’s comments and my quick thoughts in this very short video.

Overall, economists like free markets as they maximize the total of consumer surplus and producer surplus. Buyers (the teams) generally get the players they want. And the sellers (the players) get value above and beyond what they would have needed to get to play. Without markets, you have players stuck in places that aren’t good for either side.

For an example, think of Indiana quarterback Fernando Mendoza (pictured above). He transferred from Cal to Indiana, won the Heisman, and has a chance at a national championship tonight. He is likely going to be the top pick in the NFL draft this April. What would have happened without the opportunity to transfer?

This is just one example, but I think it is worth highlighting as the NIL market here was incredibly important for this player (and the team). Markets are generally efficient and I’ve seen nothing to indicate the NIL market is inefficient.

But chaotic? Yes.

Markets can also be chaotic and disruptive. They can seem like a free-for-all. Some won’t like the end result, but society generally fares better with unrestricted markets.