Cash In on Your College Athletic Talent: 6 Must-Know Strategies to Master the $1 Billion College Athlete NIL Game

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College athletes, both seasoned and aspiring, have entered a new era — one brimming with financial prospects that could collectively reach a staggering $1 billion annually. The catalyst for this transformation? NIL, an acronym that represents "name, image and likeness."

Thanks to a combination of state legislations and a pivotal policy shift by the NCAA in 2021, athletes are no longer constrained by the traditional route of turning professional to secure income. In this brave new world, the devil resides in the details, but let's explore six strategic considerations that can guide college athletes not only to participate but also to excel in the ever-evolving NIL game:

1. Cultivate Your Personal Brand: Just as Disney, Coca-Cola and Tesla have established themselves as iconic brands, it is paramount for college athletes to conceptualize themselves as brands. Every moment on the field, every social media post and every interview contributes to how the public perceives you. Many athletes, especially those in college, have yet to consciously craft a brand for themselves. This is a missed opportunity. NIL contracts can aptly be renamed as "brand contracts," because they essentially reflect your personal athletic brand. Before committing to any NIL deal, take proactive steps to envision how you want to be perceived. What values do you champion? What principles do you uphold? If people could associate one word with you, what would it be? Manage your brand like a business. The more you invest in your brand, the more attractive you become to potential business partnerships.
2. Think Long-Term. Don’t jeopardize your athletic brand for a few bucks. Be careful about any deal that may affect your brand or future NIL deals. Ask yourself, “Will my future self regret doing this?” You may be enticed by the money today, but how will you or your fans feel about a company that offers less than savory products or services? Don’t be short-sighted. That $100 they pay today will be gone before the weekend ends, but the social media post or video you created will live forever. Aim to be proud of your actions both now and in the future, and ensure that those actions align with your financial goals.
3. Cash Is Your Best Friend. Some companies might dangle free products and merchandise in front of you in exchange for promotional efforts. However, it's crucial to understand that these items are far from free. Often, there are implicit (or explicit) expectations associated with such arrangements. For example, a company might provide you with a tub of their protein powder in exchange for four social media posts and a video. Each post plays a role in shaping your brand and value, and these products are, in essence, a form of payment. Instead, consider negotiating monetary compensation for your services. Think about your own financial needs — college tuition or supporting a family member, for example. Those needs can be met by cash, not protein powder.
4. Get Skin in the Game. In the realm of compensation, free products rank at the bottom, followed by cash. At the pinnacle lies equity — ownership of part of a company. If a company genuinely believes in your athletic potential (and, equally important, you believe in the company's mission) and seeks a long-term partnership, contemplate receiving both cash and equity as NIL compensation. This has the potential to be a win-win. For start-ups short on money, they can use their equity to pay you instead, and if the company succeeds (maybe in part due to your promotion and involvement), you get ownership in a growing company.
5. Invest in Your Future. If you are fortunate enough to have companies paying you money for your NIL, consider contributing to a Roth IRA or 401(k). These are excellent retirement accounts that may reduce your taxes and help you save for the future. Of course, talk to a tax professional first.
6. Get Help. If you are offered significant NIL compensation, consider building your wealth team to manage this sudden windfall. The team could include an agent, attorney, tax professional and a CERTIFIED FINANCIAL PLANNER® professional to help negotiate and guide you throughout the process.

The realm of NIL presents college athletes with unprecedented opportunities to monetize their skills and image. By carefully navigating this landscape, developing a strong personal brand and making informed choices, athletes can not only participate in the game but also emerge as winners. Find a CFP® professional to help you today.