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2024

The Recruiting Rating Service Industry’s Impact on College The Recruiting Rating Service Industry’s Impact on College

Athletics Athletics

Michael Rica

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Part of the Law Commons

public views the higher education model. High school applicants make sure to research how

successful the programs are, while also factoring in just how raucous the athletic atmosphere is

simply because it is part of the college experience now.

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Yet, the idea that college athletics exist

as a way to build character in the future generation and teach them to deal with success and

failure is dead; and a statement like that would get you laughed straight out of the door at NCAA

headquarters in Indianapolis. College athletics is a multi-billion-dollar business that is driven by

marquee Universities, passionate fans, and most importantly, extremely talented young athletes.

A university’s ability to recruit talented high school athletes is the fundamental backbone

for which a major college athletic program sinks or swims. As college sports have developed into

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transformed into a billion-dollar industry with the backing of iconic brands like Yahoo and CBS.

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Two major websites, Rivals and 247Sports, have both collectively created and

revolutionized the industry, while a new market entrant, On3, has emerged as a one stop shop to

marry prospect ratings with NIL.

fans to stay up to date with recruiting, this is no longer the business model. Recruiting rating

just how talented the athlete is.

athletics, there are multiple avenues that must be analyzed. First, it is important to understand

athletics. In addition, it is important to lay the foundation about the legitimacy of these services

and how their ratings actually translate to success on the field. Doing all of this to highlight the

most important aspect, which is to show how both the Universities and athletes derive value

solely created by the recruiting rating industry. With NIL and the transfer portal fundamentally

changing the fabric of college athletics, recruiting rating services will continue to directly

influence all of college sports.

II. Industry History and Rise

The landscape surrounding the recruiting process for college athletics has gone through

substantial change in virtually every NCAA era since its inception in 1906. From the 1951

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program in the 1970’s and 1980’s was made an example of by the NCAA to protect amateurism.

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SMU was operating a slush fund in which they were paying high profile recruits, like Eric

Dickerson, to come play football for them. Found guilty, SMU was assessed the ‘Death Penalty’.

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actions of SMU, yet preserving amateurism as a business model drove the NCAA to punish.

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The recruiting rating industry has followed a similar path of innovation to stay in step

with the ever so changing recruiting landscape. Although high school recruiting rankings in print

have been around for years, and were popular enough to create high school sports legends like

Damon Bailey or Emmitt Smith, the introduction of the internet truly transformed the landscape.

The roots of the internet era for recruiting ratings can almost solely be traced back to one man

and three separate ventures, Shannon Terry.

While the background story of Shannon Terry is important, a history lesson into who he

services, each with a wrinkle that influences value for both the prospect and the University.

Although other services existed, like Scout, and still exist, like ESPN Rankings, it is

important to highlight Terry as the figure who was able to create entities that not only were for

fans to consume, but also for the purpose of influencing athletic departments and growing the

industry. Rivals gave fans the ability to talk, but most of the time argue, with each other about

their teams and recruiting classes. 247Sports developed a complex ratings formula that would

High school players were now aware of their rating; Am I a five star? Why am I a five

star here but a four star there? Recruits began to become aware of what it meant to be highly

rated, it became a method in which value in themselves could be created.

made athletic departments aware. They too understood what it meant to be a five star, and what

kind of value obtaining that five star can create once you get him on campus.

As athletic departments began to view the services as a valuable resource, a group of the

recruiting rating services ventured into a new territory that created even more value for

themselves as a tool for athletic departments and high school prospects. Rival, ESPN and

247Sports began to sanction showcase camps that would allow the elite high school players to

Universities began to attend the events in the hopes of spotting their next star, coaches used it as

another way to connect with players in their never-ending recruiting pitch, and most importantly

Even after all this, developing both Rivals and 247Sports into reputable outlets used by

the college athletics universe, Terry was not finished. He has continued to adapt the recruiting

rating service industry with the ever-changing nature of stride for stride with college athletics.

With that, Terry created On3, an NIL centric rating site that breaks down everything a player

needs to know about their personal value created by being a five star, and what a university

needs to know about how much value that five-star can bring them just by wearing their colors

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.

This two-decade long process has led the industry to the place it is today. With NIL

dominating what seems to be every conversation in the college athletics world, the recruiting

rating industry has devised a model that alters the way recruiting was traditional practiced. What

was once a regional practice has evolved into a national competition between athletic

many cases are being thrusted into the spotlight all thanks to these recruiting rating services. It is

now a coach’s job to not only know the best high school athletes in the country, regardless of

their high school graduation year.

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philosophy was dead.

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Shannon Terry created a monster of an industry. It is something that has grown

creation, to then simply let him free to create a direct competitor. It happened with Yahoo after

again once On3 is purchased.

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that could have stopped Terry from doing this?

While Terry has been subject to non-compete clauses after his sales to Yahoo and CBS,

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all three of the recruiting rating services were incorporated in Tennessee, a state that prohibits

with friendly business laws, and created an industry that relies on adaptation to essentially allow

himself to become a personal monopoly until he ultimately sells to a larger corporation. A

remarkable strategy that has made himself into a multi-millionaire and led to the creation of an

immensely impactful college athletics industry. These purchases not only proved the brilliance of

Terry, they also marked massive turning points for the industry as a whole.

There is little room for debate about whether the introduction of online recruiting rating

the traditional, regional outlook of recruiting and made it national. A prospect from Baton Rouge,

Louisiana was no longer a lock to be the next star at LSU. Pipelines began to form; New Jersey

kids funnel to Michigan, Texas kids play at Ohio State, South Florida kids dominate at

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Being a highly rated recruit is a highway to fame and an important brick in the building of

personal value.

With the implementation of NIL policy by the states and the NCAA, the value creation

opportunity available by being a highly rated player dwarfs what it was when Lavar Ball was

present on every ESPN show each morning. NIL now allows prospects to hold a bargaining chip

over athletic departments based solely on their high rating and ability to create personal value.

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By having this, many prospects are able to know their value as a recruit and pick

their university accordingly. Next, before ever even signing a deal or a national letter of intent,

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The potential earning capacity that highly rated recruits see as it comes with the notoriety of

being a well-known high school athlete has led many to do things never before seen on the

amateur level. Highly rated prospects contracting with agents while still in high school, growing

their social platforms in the hopes of securing a large NIL deal because of it, and many times

risking eligibility to secure NIL deals for the next level.

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NIL has allowed recruiting rating

services to act as a value creation vessel for highly rated prospects, which in the era of NIL has

rightfully allowed these prospects to earn what the market says they are worth.

While many prospects are learning on the fly about their value as a recruit, the recruiting

rating industry has again stayed a step ahead. The recruiting rating visionary that is Shannon

But the most important feature that truly shows the influence the recruiting ratings

industry has on the current NIL era is the concept introduction of ‘Roster value’ and ‘Brand

Value’. Roster value in a sense is what drives NIL from an athletic department’s perspective.

Simply put, it is the value that the athlete will bring to the team or university. Universities use

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On the other side, roster value is what the athlete usually points to when requesting a certain

amount of money to play for a particular school through their collective.

athletes to know their roster value to a university and essentially use it as a bargaining chip.

On the other hand, brand value is solely a devise used by the athlete that takes into

account the status of a highly rated prospect. Brand value is a calculation of what the athlete’s

personal brand is and what they can earn through their own personal advertising and sponsorship

opportunities.

Brand value is based around three factors.

The obvious one being on field

performance, while the next two, influence and exposure, highlight the prospects’ ability to build

their own brand as a highly rated prospect.

Exposure mainly has to do with the relevance and prestige of the high school or

school to highly rated players in the name of national exposure. Because of this ability, these

schools tend to always rank at or near the top in terms of talent and success on the field.

business want their product or service to be seen by the most amount of people possible.

Prospects that are highly rated and market themselves because of it, are valued higher than

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To put the value of being a five-star prospect in the NIL era into perspective, the top

seventeen highest NIL valued prospects in high school football during the 2022 season were all

either five-star prospects or quarterbacks.

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Understanding your value as a highly rated prospect

is the name of the game, yet the results can be volatile.

While many prospects in the past few recruiting cycles have successful used their value

as a recruit to secure compensation, there are still a fair share of instances where players were

burned by a false sense of value.

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As stunning as it may be, this contract is completely legal in

the new NCAA governance policy.

The issue that arose in this case, and many other similar cases, is that NCAA guidelines

surrounding NIL deals are quite loose. Seemingly, the only guardrail set in place is that

particular area, prospects are ripe to be taken advantage of.

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As for Rashada, the fourteen-million-dollar deal was in fact too good to be true and Gator

Collective backed out of the deal right before the initial payment was due.

optic for the University and a potential fraud or contract dispute, because of the NCAA calendar,

Rashada had already signed his letter of intent to enroll at the University of Florida. Rashada was

then granted his release from the University and ultimately ended up signing with Arizona State

As personal value becomes more understood from the recruiting ratings industry, more

and more highly rated prospects will understand that they can seemingly make generational

policy surrounding NIL, is the practice of prospects simply requesting a certain amount of

money to play for that University.

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Many prospects are

using recruiting rating industry as somewhat of a personal value generator, it is not surprising

that many are taking advantage of this, with a notably instance coming out of Tuscaloosa.

Reports emerged from Nick Saban claiming that he was approached by two prospects,

one from the high school ranks and one from the transfer portal, who each requested money to

The high school prospect, whose name was kept

anonymous but it’s an unkept secret that it was the number one rated player in the class Cormani

player, who turned out to be Alabama offensive guard Javion Cohen, requested five hundred

thousand dollars and for his girlfriend to obtain a spot in the Alabama Law School.

ratings as well as NIL formulas and calculators created by On3.

It is not a surprise or even a

immune from criticism.

While it is true and a very good step that many players are creating value for themselves

and earning generation compensation for their name, image and likeness that athletes of the past

were not able to earn,

there is a nasty side to all of this. The Jaden Rashada saga is just one

story in a sea of other NIL contracts or promises that did not go the way the parties involved had

What the recruiting rating service industry has done to give athletes the ability to create

the way Universities and athletic departments conduct their recruiting activities.

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different depending on the state laws that govern, but across the country Universities have had to

quickly adjust to the new attitude and identity that surrounds a prospect. The rise of collectives,

the rebirth of boosters, contracts with local businesses; all are now standard practices at virtually

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The current NIL system is unprecedented and something college athletics has never had

to adjust to before. There has always been recruiting violations with schools offering prospects

money to play for them, it is not a new concept. Yet, prospects can now field offers from various

university affiliated entities, demand a certain amount of money to be paid to them, and even

with third-party entities to conduct pseudo pay for play activities.

and in its infancy, there are no guidelines and many critics view it as a wild west era. The critics

are not wrong, yet this system is legal and the way recruiting will work for the time being.

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Pressure on coaches and athletic departments has never been higher and they must adapt

affirming the idea that having highly rated prospects on your team will result in success. While it

is not a truly groundbreaking theory, it does corroborate the influence the ratings industry has on

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But this pressure on coaches and athletics departments alike should come as no surprise.

College athletics is a business. A cold hearted, cut throat business that leaves behind the weak

and embraces the victors. Creating and sustaining a successful football and men’s basketball

program is essential to the success of an athletic department. The pressure of success should be

felt by the individuals involved in these two sports because without them, there would be no

athletic department to speak of.

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and men’s basketball are the only revenue generating sports they have.

NIL has amplified the

pressure for coaches to succeed in football and men’s basketball recruiting because if they don’t,

the other sports will go unfunded.

All athletic departments are not built the same and it is an accepted part of the collegiate

The recruiting rating industry allows universities to easily analyze talent as they grade

prospects using the star ratings. Universities compete to attract the prospects in any way they

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unlimited NIL requests, the inverse seems to be true. Storied programs, the Alabama’s and Ohio

States of the world, use the flip side of NIL and sell themselves on roster value.

While brand value deals more on how prospects can create value, roster value allows the

university to sell themselves to a particular prospect.

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the

schools like Ohio State or Georgia lean more onto selling themselves through roster value. So far

this strategy has worked, these roster value centric schools have continued to recruit at the

highest level and win at the highest level.

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The current NCAA NIL governance and personal

value knowledge from the recruiting rating industry has created this divide. After Justice

making sure a top recruit is landed. These schools continue to top the charts in the recruiting