Tennessee's groundbreaking Adidas deal a game-changer for college sports in NIL era

On the surface, it's just another apparel deal between two popular brands, but in the era of NIL (name, image and likeness) in college sports, it's a game-changing agreement. As part of the agreement, Adidas will establish a fund for NIL deals between the University of Tennessee and student-athletes. 

The German-based company will provide Tennessee with at least $10 million annually for the NIL deals, which, as of now, is about half of the $20.5 million that schools participating in the revenue-sharing model are allowed to give directly to student-athletes. That figure will almost assuredly increase with each passing year, meaning both current and future Tennessee Volunteers will benefit directly from this deal.

Adidas will aim to make top student-athletes brand ambassadors by giving them national marketing campaigns and signature shoe lines. With NIL deals becoming a centerpiece of how college athletic departments attract top recruits, this deal is a bellwether for how apparel deals will be renegotiated across the world of college sports. 

Of course, at the center of this deal is football, as it remains the most popular sport in the country.

According to The Athletic, the Volunteers' football program is estimated to be valued at $1.37B, the ninth-highest valuation in college football. It's only natural, then, that Adidas wants to get its logo back on Tennessee football jerseys. 

Adidas sponsored the team for 20 years before the university switched to Nike in 2014. While some fans were hoping Tennessee would re-up their partnership with Nike, fans who remember the 1998 National Championship team will probably feel good seeing the Adidas logo on the jersey again. Adidas also sweetened the deal by providing assurances that Tennessee athletics can design its apparel in-house, in collaboration with the company. 

Aside from nostalgia and big business, Tennessee and Adidas both know that for the school to remain one of the top programs in the country, they'll need star recruits. Before the ascendance of NIL deals, recruiting top talent was a mix of promising top-of-the-line facilities and flaunting the pedigree of the program. 

NIL money has changed that equation and already impacted Tennessee. 

In April, star quarterback Nico Iamaleava shocked the school by not reporting to spring practice and transferring to UCLA. Reports suggested part of the disagreements between Iamaleava and the school was over his NIL deal. 

How Iamaleava plays this season will make Tennessee wonder if it should've allocated more NIL money to keeping him happy. If that's the case, it's safe to wonder if Tennessee will tap into this deal as much as possible to keep future stars away from the transfer portal.

This deal with Adidas certainly opens new doors for athletes to maximize their branding and will test the NIL distribution system over the next decade. Expect these types of deals to become the norm, too, as universities seek every competitive advantage against one another.