Name, Image, and Likeness (NIL) deals have opened new doors for student-athletes, giving them opportunities to earn from their talent and hard work. But while the headlines often highlight million-dollar deals, the reality isn’t always so glamorous. Recent lawsuits show how NIL agreements can fall apart, leaving athletes without the money they were promised or worse - in legal trouble.
What’s Happening in NIL Right Now? NIL deals have changed the game for student-athletes, but not every deal goes smoothly. Here are some recent examples that highlight what can go wrong:
Florida State Basketball Players: Six former players are suing Coach Leonard Hamilton, claiming they were promised NIL payments that never materialized. The lawsuit alleges these unfulfilled promises caused financial and reputational harm.
Jaden Rashada’s NIL Deal Gone Wrong: This quarterback believed he had a $13.85 million NIL deal with the University of Florida. After switching schools, the deal fell apart, leading to a lawsuit to recover what he says was promised.
Matthew Sluka’s Departure: The former UNLV quarterback walked away from the program after a promised $100,000 NIL deal didn’t come through. Without formal agreements in place, the deal collapsed.
Tulsa Football Players’ Allegations: Two athletes claim they were verbally promised NIL payments by their coach, but nothing was put in writing. This left them with no way to enforce those promises.
These stories are just the tip of the iceberg and highlight the risks athletes face if NIL agreements aren’t clear, legal, or properly managed.
The Risks of NIL Deals
NIL can be a life-changing opportunity for student-athletes, but it’s not without its challenges. When deals go wrong, the risks include:
Unpaid Earnings: Verbal promises or vague agreements often leave athletes with nothing to show for their work.
Legal Issues: Disputes over NIL deals can lead to lawsuits, which are time-consuming and expensive.
Lost Eligibility: Non-compliant NIL agreements can put your NCAA eligibility at risk, threatening your entire athletic career.
Financial Confusion: Many athletes aren’t prepared to manage taxes on NIL income, leading to unexpected six-figure tax bills.
Financial Literacy Is Key NIL deals bring new financial responsibilities that many student-athletes haven’t faced before. Financial literacy is critical to managing your money, avoiding costly mistakes, and staying on top of your tax obligations.
Here are a few ways to stay protected:
Get Everything in Writing: Verbal promises aren’t enforceable. Always insist on a written contract that clearly outlines the terms of your NIL deal.
Understand Your Tax Responsibilities: NIL earnings are taxable income. Without proper planning, you could end up owing more than you expected. Working with a tax professional can help you stay compliant and avoid penalties.
Vet Your Partnerships: Research the companies and people offering you NIL deals. Are they legitimate? Do they understand NCAA rules?
Seek Financial Guidance: Partner with professionals who specialize in NIL to help you manage your money, file your taxes, and make smart financial decisions.
Why This Matters for Every Student Athlete
The headlines might focus on the biggest NIL deals, but most agreements are much smaller. According to NCAA data, over half of NIL deals are worth $100 or less, with a median value of $62. Whether your deal is $100 or $1 million, understanding the business side of NIL is crucial to protecting your future.
Learn More
At The Winston CPA Group, we specialize in offering tax guidance and financial literacy education to student athletes and their families. Our goal is to help you navigate the complexities of NIL deals so you can focus on your goals without worrying about unexpected financial setbacks.
Explore our NIL & Taxes page for more guidance like this and to book a consultation to discuss your specific NIL situation.
Comentários