The Name, Image, and Likeness (NIL) landscape has opened incredible opportunities for high school athletes across the country. With the potential to earn money from endorsements, social media partnerships, and brand collaborations, young athletes are entering a world that was previously reserved for professional sports stars.
However, with these new opportunities come significant risks. High school athletes, often lacking experience in business negotiations and legal matters, are making costly mistakes that could impact their eligibility, finances, and future athletic careers. Understanding these common pitfalls – and knowing how to avoid them – is crucial for any young athlete looking to capitalize on their NIL opportunities safely and effectively.
1. Signing Contracts Without Proper Review
The Mistake: The most dangerous mistake high school athletes make is blindly executing NIL contracts without understanding the terms. Many young athletes get excited about their first deal and rush to sign agreements without reading the fine print or seeking guidance from adults who understand business contracts.
This mistake often occurs when dealing with non-lawyer business owners who may not fully explain contract terms, or when athletes feel pressured to sign quickly before "missing out" on an opportunity.
How to Fix It: Never, under any circumstances, sign a contract without thoroughly reviewing every clause. Pay special attention to compensation language – ensure that any payment amounts are explicitly defined in writing rather than left to the company's discretion.
Have a trusted adult, parent, or legal professional review the contract before you sign. Look for red flags like vague payment terms, excessive time commitments, or clauses that give the company too much control over your likeness. If something doesn't make sense, ask questions until you fully understand what you're agreeing to.
2. Ignoring State and School Compliance Rules
The Mistake: Each state has different NIL regulations for high school athletes, and many athletes fail to understand these rules, which can result in loss of eligibility. Some athletes assume that because NIL is "legal" they can sign any deal without restrictions.
For example, in states like Texas, athletes must disclose NIL deals to their university before entering into contracts. Other states have specific requirements about what types of deals are allowed and how they must be structured.
How to Fix It: Before signing any NIL agreement, research your state's specific high school NIL regulations. Contact your school's athletic department or compliance office to understand what's required and what's prohibited.
Create a checklist of compliance requirements and review it before every deal. Some key questions to ask: Does my state require disclosure to my school? Are there restrictions on the types of products I can endorse? Do I need to report earnings to anyone?
3. Surrendering Too Much Control Over Your Brand
The Mistake: This is perhaps the most financially damaging mistake young athletes make. Many agree to terms that give companies excessive control over their NIL rights for extended periods. Athletes may unknowingly grant a company all rights to their name, image, and likeness for their entire high school career, allowing the company to make additional deals using their likeness without further compensation or approval.
How to Fix It: Carefully review exactly what control you're giving up in any agreement. Avoid contracts that limit you to posting for only one company, require an unreasonable number of social media posts, or grant a company exclusive rights to your NIL.
Negotiate reasonable limitations on the company's use of your name, image, and likeness. Consider working with an agent or representative who understands NIL law and can help protect your interests during negotiations.
4. Failing to Plan for Tax Implications
The Mistake: NIL payments typically don't have taxes automatically withheld, leaving many young athletes shocked when they discover how much they owe in taxes. Some athletes spend their entire NIL earnings without setting aside money for tax obligations, creating financial problems down the road.
How to Fix It: Understand that NIL income is taxable income. Work with a financial advisor or tax professional who understands athlete finances to plan for your tax obligations.
Set aside 25-30% of your NIL earnings immediately upon receiving payment. Keep detailed records of all NIL income and related expenses. Consider making quarterly estimated tax payments to avoid a large bill at tax time.
5. Poor Financial Management and Spending Habits
The Mistake: Many high school athletes lack financial literacy and spend NIL earnings impulsively without considering long-term financial goals. Some use NIL money for luxury purchases rather than investing in their future or saving for college expenses.
How to Fix It: Develop a budget for your NIL income before you start earning. Create categories for immediate expenses, savings, college fund, and discretionary spending.
Consider the 50/30/20 rule: 50% for essentials and college savings, 30% for discretionary spending, and 20% for emergency savings and investments. Work with a financial planner who specializes in athlete finances to develop a comprehensive financial strategy.
6. Neglecting Personal Brand Development
The Mistake: Many athletes focus solely on immediate compensation opportunities without building a strong personal brand that could attract better, more lucrative deals. They accept whatever offers come their way instead of strategically developing their online presence and marketability.
How to Fix It: Invest time in building an authentic personal brand through consistent social media presence and genuine engagement with followers. Share your athletic journey, training routines, and personality – not just promotional content.
Create content that showcases your values, interests, and personality beyond sports. Strong personal branding creates leverage when negotiating NIL deals and attracts higher-quality partnership opportunities.
7. Overcommitting to Unrealistic Requirements
The Mistake: Young athletes often agree to deals involving excessive travel, social media posts, and in-person appearances that interfere with school, sports training, and personal life. They may commit to posting multiple times per day or attending numerous events without considering the impact on their academic and athletic performance.
How to Fix It: Carefully assess the time commitment required before signing any deal. Create a realistic schedule that accounts for school, practice, games, homework, and personal time.
Ensure deal terms don't conflict with your academic obligations, athletic training schedule, or school policies. Negotiate realistic expectations about the number of posts, appearances, and travel required, and make sure compensation is proportional to the time investment required.
Remember: your education and athletic development should always be the priority. Any NIL deal that interferes with these goals isn't worth pursuing.
Building a Support Network
Success in the NIL space requires more than just avoiding mistakes – it requires building a strong support network. Surround yourself with knowledgeable adults who can help guide your decisions, including parents, coaches, compliance officers, and potentially legal or financial professionals.
Consider joining or connecting with other high school athletes who are navigating NIL opportunities. Learning from their experiences can help you avoid common pitfalls and identify new opportunities.
Moving Forward Safely
The NIL landscape offers incredible opportunities for high school athletes, but success requires careful planning, education, and smart decision-making. By avoiding these seven common mistakes and focusing on building sustainable, compliant partnerships, you can maximize your NIL potential while protecting your eligibility and future.
Remember that every deal doesn't need to be accepted, and it's better to pass on opportunities that don't align with your goals or values than to commit to agreements that could harm your future prospects.
For expert guidance on NIL opportunities and digital marketing strategies for athletes, visit MySportsMedia.com/NIL or contact Dan Kost, CEO at info@MySportsMedia.com.
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About the Author: Dan Kost is the CEO of Name. Image, likeness., a digital marketing company specializing in NIL opportunities for student-athletes. For more information, visit mysportsmedia.com/nil or email info@MySportsMedia.com.
