The Name, Image, and Likeness (NIL) era has transformed collegiate athletics, unlocking unprecedented earning potential for student-athletes across all sports. But with opportunity comes responsibility. For many, NIL income arrives before they’ve had any financial training, leading to common — and often costly — mistakes. 

At Cerity Partners, we believe NIL income can be a launchpad for lifelong financial success. But without the proper guidance, athletes risk turning a moment of promise into years of regret. 

Real NIL stories, real stakes 

Just look at what’s happening in today’s headlines. 

  • Women’s basketball stars Olivia Miles and Azzi Fudd recently made waves by opting out of the WNBA draft to stay in college. Why? NIL deals offered more earning power, flexibility, and brand visibility than professional contracts. It’s a powerful example of how NIL is changing the game, especially for women in sports.
  • On the other hand, quarterback Jaden Rashada’s $13.85 million NIL deal unraveled, leading to a high-profile lawsuit against the University of Florida and several of its representatives. His case underscores how murky—and legally risky—NIL deals can be without experienced counsel. 

In both cases, the need for financial literacy, trustworthy advisors, and long-term planning is clear. 

Five ways to avoid mistakes with NIL money 

1. Underestimating the tax impact 

NIL payments often don’t have taxes automatically withheld, and athletes may not realize how much they owe until it’s too late. Between federal, state, and self-employment taxes, it’s not unusual to owe 30% to 40% of gross income. 

What to do: Athletes should work with a CPA to project their tax liability. They should also set aside money from each deal and consider making quarterly payments to avoid penalties. 

2. Overspending and lifestyle creep 

A sudden influx of income often leads to impulsive spending — cars, fashion, travel, and helping friends and family. But unchecked spending can quickly deplete even substantial earnings. 

What to do: A budget can help athletes enjoy the present while protecting the future by aligning their earnings with short, intermediate, and long-term goals.  

3. Relying on bad advice 

From social media influencers to unvetted “agents,” athletes are bombarded with advice. Unfortunately, not all of it is sound. In some cases, relying on poor advice (or advice not specific to the athlete’s particular circumstances) can lead to bad investments, scams, or even legal trouble. 

What to do: Athletes should assemble a vetted advisory team to work collaboratively in their best interest. Essential team members should include a fiduciary financial advisor, a qualified CPA, and a sports-savvy attorney.  

4. Not forming a legal entity 

Without a proper business structure (like an LLC or S-Corp), athletes may miss out on tax deductions and increase their legal liability. A business entity also adds professionalism when working with brands. 

What to do: Consider setting up an entity to manage NIL contracts, brand partnerships, and related expenses, and separate personal from business finances. 

5. Ignoring the long-term view 

NIL earnings can be temporary, but their impact can be permanent. Without saving and investing, many athletes look back wondering where the money went. 

What to do: Commit to saving a portion of every deal. Whether it’s retirement, real estate, or building a business, let today’s earnings fund tomorrow’s goals. 

The bottom line: Utilizing NIL success responsibly 

Whether you’re a high-profile athlete staying in school because of strong NIL deals or someone facing complex contract disputes, one thing is clear: NIL success isn’t just about how much you make — it’s about how well you manage it. 

At Cerity Partners, our financial advisors help athletes and their families transform NIL opportunities into lasting wealth with education, structure, and a plan tailored to their lives and goals. 

If you’re a collegiate athlete, family member, or part of an athletic department and want to learn more about building a sustainable financial game plan, we’d love to connect. 

Please read important disclosures here.