The rules governing how athletes earn, invest and get taxed are more complex than ever, while the gap between being informed and unprepared is widening:
The business of sports is moving at breakneck speed, and the stakes have never been higher. In the last few years, money has gotten bigger, deals more complicated and the margin for error smaller.
College athletes are earning real income earlier than ever before. Private equity has entered the ownership structure. Women's sports are having a commercial moment. And if you're competing internationally, your tax obligations are reaching beyond the border.
While the opportunities are real, so are the landmines. What you do off the field can shape your financial future just as much as what you do on it. Here's a look at what's changed and what it means for you.
Name, Image and Likeness (NIL) is the biggest story in college athletics, and it is changing daily. It's what former University of Alabama and Louisiana State University coach Nick Saban calls the "Wild West." There's no unified framework governing how schools recruit with money, how collectives operate or how competitive balance gets protected. The rules are uneven and enforcement varies. The schools with the deepest pockets have a built-in advantage.
For example, a Southeastern Conference school might be generating $250 to $300 million annually, while a Mid-American Conference program is working with $30 million. Yet the current model caps direct revenue sharing at $20.5 million per school regardless of what they generate. Football typically absorbs about 75% of that, leaving every other sport to split the remainder. For most programs, football and men's basketball are making money while everything else is running at a loss.
On top of the revenue share, boosters fund collectives independently, which means you could have a university agreement plus eight to 10 separate contracts with local businesses, each paying you an amount for appearances and social media. The money is real. So are the complexities that come with it.
A lot of schools will hand you an app or schedule a Zoom meeting on financial literacy and call it a day. It's not working. The advisor space has its own risks. Some advisors are angling for a future pro client. Others have financial ties to the same collectives cutting your checks. If the person advising you has any relationship with the people paying you, that's a conflict of interest you can't afford to ignore. The IRS treats your NIL income like a business. You should too.
Make sure your books and records are in order, understand your quarterly tax obligations and know what you can legitimately deduct as a business expense.
Women's sports are finally getting their well-earned due. Viewership is up, sponsorship dollars are growing and media rights deals have expanded significantly. The WNBA is commanding serious attention. Professional women's soccer and volleyball leagues are drawing audiences. The new Unrivaled 3-on-3 basketball league is adding another platform for female athletes to compete and build a following. The revenue is there, and it’s being shared, even if not at the levels of men's sports.
For female college athletes, NIL has been a game changer. The opportunity to earn meaningful income before turning pro is real, and more brands are paying attention every year. The era of women's sports being an afterthought commercially is over.
But the growth brings its own complexity. The financial and contractual landscape athletes are navigating is more sophisticated than ever before. Longer careers, expanding league options and sizable sponsorship deals mean the decisions you make today about managing your money, brand and business relationships will follow you for a long time.
Start treating your income and brand decisions like a business now, not later.
The money flowing through college and professional sports isn't just from ticket sales, TV deals and sponsorships. Private equity has moved from the sidelines into the ownership structure of teams, leagues and college sports ecosystems. That changes things in ways that aren't so obvious.
At the college level alone, athletes are already navigating multiple income streams at once. Enter private equity. Schools are taking private equity money to fund stadium upgrades, new fan experiences and infrastructure. In return, private equity is taking a piece of the revenue. It's another layer in an already complicated financial network.
Where it gets really interesting – and complicated – is when equity comes directly to you. More athletes are being offered equity stakes, profit interests and revenue share arrangements as part of sponsorship and partnership deals. That may sound great until you realize that equity isn't the same as a check. If you receive stock or a profit interest as compensation, that has taxable value at the time you receive it, whether you ever see the cash. That's the surprise nobody warns you about.
Multiyear vesting schedules add another layer. You might not see the value of a deal for years, but phantom income, which is income the IRS recognizes before you actually receive cash, can create a tax bill long before you have anything to show for it.
The structure of these contracts matters enormously. Whether shares are restricted, when they vest and how the agreement is written can impact what you owe and when. If you don't structure the deal correctly from the start, your options are limited down the road.
Before you sign anything involving equity, understand what you're actually receiving and when the tax liability hits.
Sports are going global along with tax obligations. The NFL is playing games in Europe, Brazil and Mexico. The NBA is expanding internationally. College basketball and football are competing abroad. Leagues are chasing new audiences, and that means more athletes are generating income outside the United States. Earning money in another country comes with tax consequences on both ends.
Here's how it works.
If you play one game in Mexico on a 17-game schedule, one-seventeenth of your salary is sourced to Mexico. Mexico withholds tax on that income at its own rate, which could add up to hundreds of thousands of dollars depending on your contract. But you’re not double taxed. The United States allows you to take a credit for foreign taxes paid, which offsets what’s owed here. You still have to report that income and that credit doesn’t apply itself.
The most common mistake is not knowing that international income exists in the first place. It doesn’t always show up on your W-2. The same goes for any international deals. If you earn money from a partnership in the United Kingdom, you owe taxes there and you report that same income in the United States. Believing that money earned abroad stays abroad is one of the most expensive assumptions you can make.
Your tax obligations can also get complicated without leaving the country. Where you establish residency, where your driver's license is, where you vote, where your memberships are – all of those things factor into how your income gets allocated across states. For example, if you go to school in Indiana but your family home is in Ohio, you may have filing obligations in both places. Or, if you play for a team in a high-tax state, like New York or California, where you establish residency can make a significant difference in what you owe. States like Florida, Texas and Tennessee have no income tax, so it’s no surprise that many athletes live there.
Actively track your schedule and connect it to your filings so you don’t risk missing foreign tax credits and overpaying. Domestically in the U.S., where you establish residency is a financial decision as much as a personal one. Understand the tax implications before establishing your domicile.
Sports betting is big business that’s getting bigger. Leagues, media companies and betting platforms are deeply intertwined. The NFL, MLB and NBA all have official betting partners now. Leagues and platforms are building fan engagement around real-time wagering, in-game prop bets and micro-wagering on individual plays and performances. For athletes, that means more eyeballs, interest and revenue tied to your performance and brand.
But there is a murkier side to this that doesn’t get enough attention. In-game betting has created a new type of integrity risk. We’ve seen it in baseball, where players were accused of influencing specific outcomes knowing money was riding on it. It doesn’t have to be a complex scheme. It can be as simple as knowing the over-under on your turnovers is set at three, and someone has a financial stake in which way that number goes.
Technology to detect suspicious patterns is getting more sophisticated. When betting activity on a specific player or outcome spikes in a way that’s inconsistent with normal trends, that may set off alarms. Investigators are getting better at connecting those dots.
What does that mean for you? It means you’re operating in an environment where your on-field decisions are being watched more closely than ever – and not just by coaches and fans but by regulators and enforcement bodies. You don’t have to be doing anything wrong to find yourself in the crosshairs.
Know who’s around you, who has access to your schedule and performance data, and what relationships exist between your circle and the betting world. Protecting your integrity is protecting your career.
As sports are moving faster, paying more and crossing more borders, the tax code is keeping pace and getting more complicated every step of the way. Whether you're a college athlete cashing your first NIL check or a veteran with income flowing from multiple states and countries, the financial decisions you make now have long-term consequences.
When you play for a professional team, your employer withholds federal, state and payroll taxes automatically. You get a W-2 at the end of the year.
When you sign an NIL deal, you're doing so as an independent contractor. Nobody is withholding anything for you. For instance, if you sign a $100,000 contract, it pays out in full and the tax bill lands entirely on you. The IRS expects you to pay quarterly, not just annually in April as usual.
Non-cash compensation is also taxable. For instance, a car dealership lets you use a vehicle as part of a deal. That has taxable value, and it gets reported on a 1099. Equity, stock, product deals, in-kind arrangements — all of it counts. The IRS doesn't care whether you received a check or a car.
Good books and records aren't just about staying compliant. They're your best tool for lowering your tax bill legally and accurately.
As an athlete running your own business, you have deductible expenses that many people overlook. If you're not keeping records, those deductions disappear, and you may end up paying more than you legally owe.
The app your school handed you isn't going to get you there. Neither is a YouTube video.
You've worked too hard to get here to leave money on the table or get caught off guard by a tax bill you didn't see coming. The athletes who'll come out ahead will treat their finances with the same discipline they bring to their sport. Make sure you're one of them.
If managing the financial side of your career requires more time and attention than you can afford, you might want to rethink your approach. Learn how our business management team helps athletes handle complexity, protect earnings and build a financial future that lasts long after the final whistle.
Get a personal consultation to explore how we can support your success and manage your daily business affairs.
