Why High School Athletes Need Professional Support for NIL Success
The opportunities presented by Name, Image, and Likeness (NIL) deals are life-changing for high school and college athletes. However, with great earning potential comes significant responsibilities, many of which young athletes may not anticipate. From taxes to contract negotiation, navigating these complexities requires a strong team of professionals, like the attorneys at Jacobs Counsel, who have the athlete's best interests at heart.
The Overlooked Tax Implications of NIL
One of the most common pitfalls for athletes entering NIL agreements is failing to understand their tax obligations. When athletes sign six-figure contracts, they’re not just receiving income—they’re also incurring tax liabilities. Without proper guidance, this can quickly become a serious problem.
Key tax considerations include:
Income Tax Implications: Understanding how NIL earnings are taxed and ensuring payments are accurately reported.
State Tax Rules: Identifying which state’s tax laws apply, especially for athletes earning money in multiple jurisdictions.
Payment Frequency: Managing taxes for lump-sum payments versus recurring payments.
Neglecting these obligations can lead to audits, penalties, and financial difficulties down the road. Working with an accountant who specializes in athlete income can ensure taxes are paid on time and in full.
Legal Ramifications in NIL Contracts
Beyond taxes, NIL contracts often include complex legal terms that athletes must navigate. Issues to consider include:
Payment Guarantees: What happens if the company sponsoring the athlete fails to pay?
Dispute Resolution: Does the contract include an arbitration clause, or can disputes be resolved in court?
State-Specific Regulations: Ensuring compliance with varying NIL laws across different states.
An attorney experienced in NIL agreements, like those of us at Jacobs Counsel, can review contracts to protect the athlete’s rights and prevent them from signing unfavorable or unenforceable terms.
The Importance of Building a Support Team
Athletes are already focused on excelling in their sport; managing contracts, taxes, and legal disputes shouldn’t be part of their daily concerns. This is why hiring a team of professionals is essential. A well-rounded support team might include:
Accountants: To manage taxes and financial planning.
Attorneys: To negotiate contracts, protect intellectual property, and address legal disputes.
Financial Advisors: To help invest and grow NIL earnings responsibly.
These experts handle the “off-the-field” complexities, allowing athletes to focus on what they do best—playing their game.
Why Planning Early is Crucial
For high school athletes entering the NIL space, planning now can save significant stress later. Developing a support team before signing contracts ensures that every agreement is thoroughly vetted and every decision aligns with long-term goals.
Athletes who try to manage everything themselves often face preventable challenges, from unpaid taxes to legal disputes. By delegating these responsibilities to trusted professionals, athletes can safeguard their future success.
Final Thoughts
NIL opportunities are exciting, but they require careful management. Taxes, contract disputes, and compliance issues are serious matters that can derail an athlete’s career if not handled properly. The best advice for any athlete entering this space is simple: build a team of experts who understand your goals and have the skills to protect your interests.
At Jacobs Counsel, we help athletes navigate the complexities of NIL agreements, from tax planning to contract negotiation. Contact us today to learn how we can help you focus on your game while we handle the rest.