NIL Income & Student-Athletes

Key Items to Remember When Managing NIL Income

Earning NIL income is a great benefit for student-athletes, but with it comes added responsibilities to make sure you are managing your money wisely. Here are some of the most common mistakes athletes make managing their NIL money.

Neglecting financial tracking and tax obligations can quickly lead to trouble. It’s crucial to track your NIL income and expenses while setting aside money for taxes to avoid penalties.

Signing contracts without fully understanding the terms is another major pitfall. Always read contracts carefully and seek advice to ensure you’re protecting your brand and getting fair terms.

Overpromising and underdelivering can harm your reputation. Stay realistic about your commitments to maintain trust with brands and fans alike.

Finally, ignoring your personal brand and compliance rules can cost you opportunities. Build a consistent brand strategy and stay informed on NIL regulations to protect your eligibility and grow your potential.

Ivy League Opts Out of House Settlement

In January, the Ivy League communicated to its student-athletes that it would opt out of the House settlement and would not be altering its rules. The Ivy League does not offer athletic scholarships, and by opting out, the league can ensure that they will be able to operate under their existing rules. How this will impact recruiting and transfers, we will have to wait and see.

Trump Administration Rescinds Recent Biden Title IX Guidance on NIL Income

The US Department of Education's recent guidance that NIL income could trigger the equal opportunity requirements of Title IX. This reverses the Biden administration’s position warning that NIL compensation would be considered “financial assistance”, which would require schools to distribute the funds in a nondiscriminatory manner.

This change opens the door for schools to pay high-performing athletes in key revenue-generating sports. With the House settlement on the verge of approval, D1 power conference schools will have as much as $20 million to distribute to their athletes.

Alabama Legislature Considering Bill to Exempt NIL Income from State Income Tax

A bill introduced this week would exempt all NIL earnings from state income tax, saving the athlete between 2% and 5% of their earnings. This follows a similar proposal in Georgia that would also exempt NIL earnings. This is a clear attempt to level the playing field with schools in states like Florida, Texas, and Tennessee, who do not have state income tax.

New Lawsuits Filed Against NCAA Over NIL Income

At least 100 former athletes filed lawsuits in California and Kentucky claiming the NCAA is still limiting athletes’ ability to monetize their NIL rights and that the current policy prohibits direct compensation for their labor. The athletes in the California suit have opted out of the House settlement while the Kentucky suit does not clearly state if students opted out.

The NCAA does not see this as an issue and they still expect the House settlement to move through the approval process smoothly.