Caitlin Clark of the Iowa Hawkeyes waves to the gang during senior day festivities after the match-up against the Ohio State Buckeyes at Carver-Hawkeye Arena on March 3, 2024 in Iowa City, Iowa.
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Three years after three little letters revolutionized collegiate sports, a billion-dollar industry is funneling more cash into college athletes’ bank accounts — and financial literacy has never been more vital.
In 2021, college athletes within the NCAA gained the chance to learn financially from their name, image and likeness — often called NIL regulations. That meant that they may receives a commission for signing autographs or posting on social media as brand ambassadors, amongst other things.
Athletes like Louisiana State University gymnast Olivia Dunne and University of Iowa women’s basketball star Caitlin Clark have NIL valuations over $3 million, in accordance with college sports site On3, which mixes an athlete’s projected value to his or her roster and their licensing and sponsorship prospects to estimate an overall annual value.
The NIL regulations have resulted in athletes younger than ever cashing in and saving up, making a need for financial literacy specifically tailored to them.
UCLA quarterback Chase Griffin has used the experience of securing NIL deals to learn useful lessons about money.
Griffin is a two-time winner of the National NIL Male Athlete of the Yr award and has inked nearly 40 NIL deals, each starting from 4 figures to just about six figures, he said.
Quarterback Chase Griffin #11 of the UCLA Bruins looks to pass the ball in the sport against the Arizona Wildcats on the Rose Bowl on November 28, 2020 in Pasadena, California.
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He says his framework around money has come a great distance since his freshman yr of college, back when he received stipend money from the university.
“With my stipend, that was the primary time I had that much money in my checking account. What I discovered was that I wasn’t nearly as good with financial literacy as I believed,” Griffin told CNBC. “I knew I used to be getting one other stipend the following month, so I used to be spending my entire stipend. As I’ve gotten older, I take a look at money through the means of what it allows me to do.”
Griffin is now saving his NIL money to purchase a house after graduation. He’ll graduate from UCLA with a master’s degree in legal studies in June.
The NIL era has allowed college athletes to save lots of for the longer term and seek skilled financial advice in a way many 18- to 22-year-olds cannot.
NCAA athletes hire agents and financial advisors to assist them negotiate NIL deals, ushering in new financial responsibilities.
“Athletes are going pro earlier, which is great,” said former NFL player and CNBC Global Financial Wellness Advisory Board member Brandon Copeland. “All of the problems that professional athletes have handled for years at the moment are going downstream.”
Copeland is the CEO of Athletes.org, a corporation that focuses on helping college athletes navigate this new world. Athletes.org works with NCAA athletes across the country to supply free, on-demand support for key decisions of their life resembling finding a lawyer to review an NIL deal. It also provides a forum to debate every thing from negotiation tactics to mental health.
“The very first thing athletes should know is taxes are real,” Copeland told CNBC. “That number you see isn’t exactly what you are going to get. Don’t go and spend it multi functional place at one time.”
Financial advisors also help to fill in those that need advice with what to do with their money.
Morgan Stanley’s head of Global Sports and Entertainment, Sandra Richards, and her team work with several NCAA athletes. Richards said she works to be certain her advisors help their clients discover their financial goals from the start.
“It’s forcing these young people to have the conversation about, what do I need this money to do for me,” Richards said. “What are we playing for, and why are you on this, and what do you need to do with this money? I’m optimistic about these young people. You’ve got a lot access to information and social media.”
Social media is one of the most important ways to achieve NCAA athletes with critical financial information. Videos on Instagram, TikTok or YouTube, for instance, can offer suggestions or insights, although it is important to vet the standard and sources of that advice.
Retired NFL player Carl Nassib uses his own social channels to realize knowledge about personal finance, adding that he wished NIL was around while he was in college. Nassib was a walk-on college football player at Penn State from 2011 to 2015, and once needed to sell his books to pay for a broken pipe in his apartment.
Nassib is enthusiastic about what higher levels of financial literacy will mean for college athletes of the current and future.
“It might be nice in case you get some athletes who’re role models in financial wellness,” Nassib told CNBC. “I believe the ripple effects of that will likely be extremely positive. I actually have been working with so many players within the NFL, attempting to get them on a greater path. If we will move that learning curve back 4 years, that’ll just be so special and so impactful.”