NIL Financial Literacy

On July 1, 2021, student-athletes were granted the ability to make money off their name, image and likeness (NIL) for the first time. Excitement and opportunities for college athletes flourished. However, there were plenty of challenges such as handling that money.

Student-athletes are making money for themselves off their abilities on and off the field, therefore, making the athlete a self-employed earner. Whether it’s a brand deal, branded training clinics or even paid autograph signings, there are many ways for these athletes to profit now.

According to the Nebraska law, if a person earns $400 or more in self-employed income, then they have to pay state income tax. That becomes an issue for younger athletes who have never filed their own taxes. A support system for student-athletes is necessary so they can handle the money lawfully and invest it correctly to ensure maximum profitability.

The University of Nebraska-Lincoln (UNL) has in many ways embraced the NIL movement. Considering the new landscape, Nebraska hired new personnel to support athletes in their NIL endeavors.

There are also NIL agencies local to the Nebraska area. Opendorse is an agency in Lincoln that was started by former Nebraska football player Blake Lawrence. More than 75,000 athletes use Opendorse to build and monetize their name, image and likeness.

Head of Customer Success at Opendorse, Julian Valentin, said he understands the importance of the financial literacy for these profiting student-athletes. She said Opendorse has partnered with US Bank to help support student-athletes’ money management.

Opendorse offers its UNL clients resources that allows them to think about their lives financially. Coaches are employed by the NIL agency to teach young athletes topical things such as tax prep.

“There are many athletes coming into college that will make money for the first time through NIL,” Valentin said. “It’s a great opportunity to learn life lessons while also having a good support group around them with Opendorse and other resources.”

Most NIL deals for student-athletes will come as a 1099 form, a tax document that records income as an independent contractor or from another source of income. A 1099 is not taxed when that money is paid out so these athletes will have to pay taxes on that income.

“Most students are going to be navigating paying taxes for the first time so understanding the expectations of that is going to be really important,” Valentin said. “They will learn real life lessons, and do it in a way where there’s a good group of people around them.”

Another consideration for student-athletes is the gifts they are given from companies and sponsors such as vehicles, free eye surgery or any materialistic items. The gifted items are considered an in-kind compensation and that is taxable income for these athletes.

“An athlete will get a 1099 for $20,000 and they are confused because they only got $18,000 cash,” Valentin said. “The leftover $2,000 can come from in-kind compensation in different forms.”

Current Nebraska football player, John Bullock, was gifted free eye surgery through a local Nebraska eye clinic. That is considered a service under the in-kind compensation umbrella.

“I had bad eyes my whole life, so I saw the opportunity to reach out to Kugler Vision through the Opendorse app,” Bullock said. “I was taxed through the app, and they told me the tax amount that came along with it.”

Bullock has the structure through Opendorse for his eye procedure. There are other resources that UNL provides to student-athletes, and they have set procedures that each must follow.

“We have people come in and talk about how to control the money and what we are doing within the NCAA rules,” Bullock said. “There are forms you still have to fill out to get consent from any organization you are partnering with.”

There are many rules associated with NIL, and the athletes will have to be sure they aren’t doing any partnering outside the guidelines.

The average Power Five college football player has an NIL valuation of $50,000 according to This amount of money can be handled in various ways. Budgeting and investing large sums of money is important for longevity. UNL finance professor Geoffry Frisen describes those approaches.

“A common trap among athletes and entertainers is to elevate one’s lifestyle to a level that requires spending the full amount from NIL,” Frisen said. “Instead, with the help of a financial advisor, save the bulk of your current income and spend only a portion on current consumption.”

Frisen describes the importance of budgeting and “living at or below your means.” Looking into the future beyond college is an aspect to consider, especially at such a young age. The legalities of handling income can require guidance from a certified accountant, lawyer or financial advisor.

“The federal government is not always very effective for guidance, but collecting on taxes due is one thing the government does well,” Frisen said. “Do not try to outsmart or outfox the IRS.”

The student-athletes at Nebraska and across the country now have the ability to profit off name, image and likeness. After investigating the new rule and its opportunities, it is key for young athletes to understand the financial obstacles and the available resources to maintain their assets.

I am a Senior at the University Of Nebraska-Lincoln studying Sports media and Broadcasting. I enjoy creating video, audio, and sports stories. In the past, I have hosted my own radio show ay 90.3 KRNU, worked in Support at Hudl, and a production intern at HuskerVision.