Providing young athletes with Name, Image, Likeness (NIL) privileges is a well-deserved and positive first step in empowering them to reap the benefits of their talent and hard work. Still in its infancy, we’ve already seen hundreds of millions of dollars earned cumulatively by college athletes (and some high schoolers!) across the United States.
As with anything where money is involved, the NCAA mobilized quickly to try and put processes in place, but it was quickly obvious more guardrails were needed to ensure compliance by the schools and protection for students. Since, we’ve seen an increasing number of states pursuing NIL legislation, and a potential federal bill is also in the works.
But with all the efforts to get money into the hands of athletes, there has been hardly any initiative to teach them what to do when they have it. While most college athletes won’t make life-changing money, a considerable percentage are making tens of thousands (and even millions) of dollars a year while building potentially wildly successful personal brands that could present substantial earning power AFTER their collegiate playing days are over – the Cavinder twins are just one of many, many examples.
Colleges have gone all in on NIL as a way to lure top athletes to their programs, which in turn drives revenue for the institution. But in providing those riches – and securing more of their own – institutions are failing in their responsibility to teach those athletes how to thrive financially during and after their collegiate years.
Financially-competent young people are the future
Higher education institutions are willfully tasked with providing a pathway to success for their students. Whether that’s to help them turn pro (which fewer than 2% do according to the NCAA), help them earn a degree, or help them prepare for life in the “real world,” colleges and universities are looked upon as the last step for a young adult to cut their teeth before heading out to tackle life.
NIL is only going to grow – last year, athletes experienced a 146% increase in NIL deals – which makes the need for financial literacy more obvious. Will the star freshman quarterback lured across the country by a multi-million dollar NIL opportunity know which state(s) he’ll owe taxes to? What about the women’s basketball player graduating after building a social media following due to NIL and wanting to solidify her brand – will she know which type of LLC to choose? Or most importantly, what about responsible spending, saving, and investment? We see it all the time in professional sports when young athletes sign contracts for millions and are broke only a handful of years later.
With the continual steep rise of social media use and mass consumption of content, increasing numbers of so-called “influencers” are jump-starting self-made careers, based on their name, image and likeness, which is why NIL for athletes has become a more prevalent issue. The influencer profession, which has become particularly popular among young people, will only continue to be a vital factor and stimulator within the economy, and influencers’ finances will be more and more impactful when it comes to overall economic health trends. Young people have always been the future, and eventually make or break financial trends, following the generations before them. A strong financial educational foundation makes all the difference.
If institutions are going to provide these valuable opportunities for student athletes to earn, they should also be providing opportunities for them to learn.
Educating the current generation: Flexible resources
Successful initiatives to provide financial literacy support to NIL athletes can look different at various institutions, as long as they share a common goal of preparing students to plan for, manage and maximize their incomes. A few formats that have proven effective include financial literacy workshops and seminars, personal finance courses and curriculum integration, one-on-one financial coaching, and alumni engagement and mentorship programs.
While these arrangements have their benefits, college athletes operate in packed schedules, with regular coursework, practices and travel included, which are somewhat inflexible and limiting. This is where online options and the latest technologies come into play, offering unmatched flexibility in:
- Accessibility and convenience – Online resources and platforms can be used at any time and from any location, allowing for on-the-go learning and self-paced education.
- Interactivity and engagement – Through the use of videos, quizzes, and modules, athletes can actively participate in their learning, promoting better understanding and retention of financial concepts. Technology can also facilitate peer-to-peer learning and community engagement via discussion forums, chat features and virtual communities.
- Customization and personalization – Tailored to meet the individual needs and learning preferences of athletes by assessing their current financial knowledge, identifying areas for improvement and implementing targeted resources accordingly. This also allows for progress monitoring and feedback dissemination.
- Real-time updates and insights – Updated with the latest information so athletes remain informed about the evolving landscape of NIL opportunities, endorsements, and financial best practices.
While an ongoing in-person course may be a helpful pathway of financial education for a regular college student, athletes can benefit from the flexibility of asynchronous learning. Not to mention, the variations in subject matters covered in courses for athletes require additional accommodation. Navigating a personal brand, NIL regulations and other unique athlete experiences are challenging, but higher education leaders and athletic departments are responsible for setting their charges up for success.
Like any other students, college athletes enter their freshman year with the expectation that they will be a functioning contributor to society, if not a transformational force, once graduation comes around. This is only possible with a basic understanding of how the world works, including how to create a foundation for a successful and financially-healthy life.
Zachary Sarf is CEO and Founder of Create Every Opportunity, whose mission is to provide financial literacy and entrepreneurship learning to all.
Read more at https://www.fierceeducation.com/student-engagement/student-athletes-need-better-financial-literacy-deal-nil
