It's a great deal for both parties. The analysts can put on their resume they were a part of a program like Clemson, UGA, Bama, LSU, OSU, etc. and they get to learn from some of the best coaches in the business. Usually translates to a pretty good promotion on to a different staff/program or you can climb up internally if you really impress.
Schools like it because it's cheap labor and pays huge dividends. They don't pay these guys much because the analysts will do it for the reasons mentioned above. Then they'll all be tasked with very specfiic roles. One guy does nothing but break down tape on opponents 3rd down tendencies, one what they run in the red zone and so on. Then during the game they'll have say one offensive analyst who does nothing but watch the opponents secondary, one watches the linebackers, one the line and then they see where the mismatch is or who is the weak point to attack.
It's become infamous that one of Bama's analysts picked up on UGA would go Cover 2 on passing downs quite a bit and their safety was cheating too much to the middle of the field and that's why they called the play where Tua hit Smith down the sideline to win the championship.
