As NIL (Name, Image, and Likeness) opportunities grow, college athletes face important decisions about managing their earnings, ensuring compliance, and planning for the future. Two common options for guidance are working with an agent or consulting an NIL-specialized CPA. Both can add value, but each comes with unique risks and benefits. Here’s a breakdown to help you make an informed choice.
Challenges Athletes May Face with Agents
Agents play a vital role in securing deals and representing athletes. However, some common contractual pitfalls deserve attention:
- Vague Payment Terms
- Some contracts lack clear payment schedules, giving companies room to delay or avoid payments.
- Potential Risk: This can create cash flow issues for athletes.
- One-Sided Termination Clauses
- Some agreements allow companies to cancel deals at any time while still holding the athlete accountable.
- Impact: This could leave athletes with unpaid work and no resolution.
- Overly Broad Exclusivity
- Some contracts restrict athletes from pursuing other opportunities, even after the agreement ends.
- Solution: Limit exclusivity clauses to a reasonable timeframe and ensure restrictions are fair.
- Contracts Extending Beyond NCAA Eligibility
- Some deals extend past your college career, creating compliance risks with NCAA rules.
- Recommendation: Look for contracts that expire or require renegotiation once NCAA eligibility ends.
- Sneaky Intellectual Property (IP) Clauses
- Certain agreements grant companies permanent NIL rights, limiting athletes’ control over their personal brand.
- Why it matters: Protecting your personal brand is crucial for future opportunities.
- Excessive Social Media Obligations
- Some contracts require unlimited posts or endorsements without additional pay.
- Consideration: Ensure social media obligations are compensated and reasonable.
How NIL-Specialized CPAs Compare
CPAs are financial professionals focused on managing and protecting your earnings. While agents excel at securing opportunities, CPAs bring financial expertise and a long-term perspective to the table. Here’s how they stack up:
Benefits of Working with an NIL-Specialized CPA
- Financial Oversight
CPAs specialize in creating financial strategies, minimizing taxes, and ensuring compliance with NCAA and IRS rules. - Contract Review
An NIL-specialized CPA can identify problematic clauses—such as vague payment terms, overly broad exclusivity, or IP risks—and recommend adjustments to protect your interests. - Tax Planning
CPAs help athletes navigate NIL-specific tax rules and avoid unexpected liabilities, such as self-employment taxes or state-specific regulations. - Long-Term Financial Management
Beyond NIL deals, CPAs can help you save, invest, and secure your financial future. - No Commission-Based Incentives
Unlike agents, CPAs don’t earn a percentage of your deals, ensuring their focus is solely on your financial well-being.
Agents vs. CPAs: A Comparison
Both agents and CPAs bring valuable skills to the table. Here’s how they compare across key areas:
| Key Factor | Agent | CPA |
|---|---|---|
| Primary Role | Secures and negotiates deals | Manages finances and ensures compliance |
| Payment Structure | Commission-based (percentage of deals) | Fee-based (hourly or project-specific) |
| Contract Expertise | Focus on deal value | Focus on protecting athlete’s interests |
| Compliance Knowledge | General understanding of laws | In-depth knowledge of NCAA/IRS rules |
| Future Focus | Secures current opportunities | Builds long-term financial security |
When to Choose an Agent
- You’re looking for someone to actively seek and negotiate NIL deals.
- You want to grow your personal brand and need someone experienced in partnerships and sponsorships.
- You’re comfortable with a commission-based payment structure.
When to Choose a CPA
- You want help managing and maximizing the earnings from deals you secure, so you can keep as much of it as possible.
- You’re looking for guidance on taxes, compliance, and financial planning.
- You prefer a flat or hourly fee rather than someone taking commission off what you earn.
The Bottom Line
While agents can be helpful for securing NIL opportunities, their focus often leans more toward securing deals (and commissions) than protecting their clients’ long-term interests. In contrast, NIL-specialized CPAs not only protect your earnings but also help set you up for financial success beyond your college years.
If you’re an NIL athlete, consider consulting with a CPA who specializes in navigating the nuances of NIL agreements. With their expertise, you can focus on your athletic and academic pursuits while enjoying the peace of mind that your financial future is secure.
