178: Turning Passion into Profit: College Athletes & NIL Deals

Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.

Austin Wilson:

All right, hey, hey, hey. Welcome back to The Invested Dads Podcast, the podcast where we take you on a journey to better your financial future. I am Austin Wilson, Research Analyst at Hixon Zuercher Capital Management.

Josh Robb:

And I’m Josh Robb, Director of Wealth Management at Hixon Zuercher Capital Management. Austin, how can people help us with our podcast?

Austin Wilson:

Please, please, please subscribe if you’re not subscribed, and visit our website and sign up for our weekly newsletter to get notified each and every Thursday when we send out a new episode, when those drop.

Josh Robb:

We haven’t missed one yet.

Austin Wilson:

We’re like a hundred and many, many, many, many, in. 180? I don’t know. Something like that.

Josh Robb:

Something like that.

Austin Wilson:

So, it has a nice little synopsis, summary, links to listen. Please go do that. But today, dun, dun, dun. We are going to be talking about the college NIL rule.

Josh Robb:

The NIL rule.

Austin Wilson:

The NIL … which is what they say-

Josh Robb:

I don’t think anybody calls it that.

Austin Wilson:

It’s what they say in Europe when you have zero points in soccer or football.

Josh Robb:

NIL. Yep.

Austin Wilson:

I know this because of Ted Lasso.

Josh Robb:

That’s right.

Austin Wilson:

NIL. NIL, as Roy would say.

Josh Robb:

Yep.

Austin Wilson:

Yep.

 

[1:13] – What is the NIL Rule? 

Josh Robb:

So, the NIL rule is the name, image and likeness, which is NIL.

Austin Wilson:

Also known as NIL.

Josh Robb:

Yes.

Austin Wilson:

Yes.

Josh Robb:

Name, image, and likeness policy, which came into effect July, 2021. And that is where the NCAA allows D1, D2 and D3 student athletes to be paid for those things, name, image, and likeness. Whereas prior to that, they were not allowed to. So if they did an endorsement, they were on a commercial for a local-

Austin Wilson:

They receive nothing.

Josh Robb:

Car dealership, and they got something, they could get fined and disqualified from being a student athlete. So, what happened was there was actually a court ruling that said, “Hey, universities, you make a lot of money on these people’s images, they don’t get anything, they should be allowed to.” And states started seeing that as, oh, this is happening. So individual states started creating their own rules or laws on what was allowed or not.

So, the NCAA finally is like, oh, they see this coming. So, they created this policy that blanketed everything that they’re in charge of. And in that, they really state that whether or not your state has a policy in place, if you’re a student athlete in the NCAA, you can do this. But you’re still under the state policies that they have.

Austin Wilson:

Now, this applies to college only.

Josh Robb:

Correct.

Austin Wilson:

One example that’s coming to my mind, which was famous back about 20 years ago. Was one certain young LeBron James. Never went to college, so this was obviously not a thing back then. But he also never had the issue because he was never a college athlete. However, there are some crazy stories and evidence of the things he received in high school-

Josh Robb:

High school, yes. And there’s actually some states have rules and school districts on what a high school athlete can and can’t do. So, there’s actually some areas where you can receive stuff-

Austin Wilson:

Gotcha.

Josh Robb:

Or use your image.

Austin Wilson:

Well, where I was from, that would’ve been like free corn.

Josh Robb:

Yeah. So, there’s a lot different there for high school. Again, that also runs into child labor laws, I’m sure. Because some of them will be under 18 and not an adult. But yes. So, this is just looking at college athletes that are in the NCAA system. All right.

And the burden’s on the athletes right now. They’re expected to understand these rules, they’re expected to understand their schools own policies and the state in which they’re attending school, their policies. And so, there’s a lot of nuances there. And they have schools, universities are trying to help by creating groups, people within the athletic department to coordinate all this.

Austin Wilson:

One of the things that makes me think of this policy as growing up, and when I was in college, the big thing was NCAA Football the-

Josh Robb:

Yeah, the games.

Austin Wilson:

Games.

Josh Robb:

On the-

Austin Wilson:

The video games.

Josh Robb:

Xbox, PlayStation.

Austin Wilson:

And I remember I was playing NCAA 03 or something like that or something, Ted Ginn, it was his rookie year or freshman year. He was like a little DB, no one knew who he was. But you’d use him and you’d just stomp everyone because he was really, really fast. But then like Tim Tebow, you could be Tim Tebow and just rock, it was great. Or all these famous college athletes. Well, the company, EA Sports, made a killing on this using these athletes images, no names, they didn’t use their names. However, there were ways that you could download the full actual roster list and everything and it would automatically update.

Josh Robb:

Oh, there you go.

Austin Wilson:

But anyway, it would use their likeness, their image, kind of. Yeah, exactly. And they would make a killing. And these students received nothing for that, which that’s kind of … I think a lot of what drove some of this was they were being essentially taken advantage of, in a lot of ways. And that is what this rule has essentially tried to close.

Josh Robb:

The name, image and likeness rule. This is what makes up and legal terms, the right of publicity. So, if someone else uses my image, who I am to make money, I should be entitled to something for that. So the NCAA’s thing, they said, all right, you can now do it. And we’ve seen this start to happen.

So, what are some of the things they use it for? One of the easiest ones is their autograph. So prior to this rule, they couldn’t sell their autograph. That was their name, and they were making money off of it. So now they can sell their autographs. Develop or use their image for clothing and apparel. So, you can have your own Wilson brand.

Austin Wilson:

I’ve still yet to be-

Josh Robb:

High tops?

Austin Wilson:

Yep. Haven’t been called by them yet.

Josh Robb:

Promote services, TV commercials, those type of things. Or you could be hired to make appearances. We’ll talk about that in a minute.

Austin Wilson:

Birthday parties, kids’ birthday parties.

Josh Robb:

There’s actually a thing they’re using for … I think is a pretty cool concept for non-profits. But yeah, we’ll get there too, as well. And so, in general, the concept here is the NCAA, this has been talked about for a long time. They didn’t make billions of dollars for all their basketball, baseball, football, all that stuff. Athletes were getting nothing. And the argument for a long time was, well, they’re getting education. And for D1 athletes, there’s a lot of scholarship, full ride stuff. And the problem was, great, education. But especially when you look at some of those high level, they don’t stay all four years.

Austin Wilson:

Nope.

Josh Robb:

So, did they really get a complete education? Probably not. They didn’t get the degree. Some go back and finish. But what are they actually getting? And is it compensation for what they’re giving up and what the university is getting for it?

Austin Wilson:

That’s a whole different-

Josh Robb:

That’s a whole nother one.

Austin Wilson:

Topic for another day, but I almost-

Josh Robb:

But that was part of what drove this to get it started.

Austin Wilson:

I almost feel like there should be more requirements of students staying all four years till they finish their degree before they would go pro. Because of how short the average pro career is very short. And most sports that you go to college for, even in D1, there isn’t a professional equivalent.

Josh Robb:

No.

Austin Wilson:

Like professional rowing.

Josh Robb:

That’s it. There’s the Olympics potentially-

Austin Wilson:

Exactly.

Josh Robb:

And that’s it-

 

[7:11] – How Does This Benefit College Athletes? 

Austin Wilson:

Very unlikely. So Josh, let’s talk about the benefits and what these rules bring to college athletes.

Josh Robb:

So the benefits for the athletes really are that they can now get income. And I saw when I was doing this research that depending on the sport, it varied. But they work, I’m going to use air quotes there. They work 30 plus hours a week on their sport in season. So they’re actually not … they don’t have time to earn income like a non-athletic student can get a part-time job and earn some income.

Austin Wilson:

Hey, what are you saying? I’m a non-athletic student.

Josh Robb:

I’m telling you. But that’s always been their argument. Well, if they want money, why don’t they go earn money? Well, one, timewise, they’re just not capable of doing that. Two, based on all the rules that are there. And that’s what some athletes prior to this would get in trouble for, is they would work a job at maybe a car dealership locally, never really show up and get paid. And it was then considered a booster thing and there was a violation. And so working became a very tricky issue for a lot of them.

And then the other thing as a benefit to this for the student athletes is now it allows them to learn. Because if they do go pro, this is going to be something that’ll continue on. So it gives them under probably a little bit stricter framework, the ability to negotiate and learn how to navigate these deals and opportunities within a more strict framework.

And then finally … and this is something we’ll talk maybe about from a long-term perspective of what’s going on in the industry. But it may give a reason why athletes may want to stay longer in college. Because we’ve seen with a couple athletes that they’ve noted that as one reason why they’re staying is their NIL deals are worth more than their projected starting salary-

Austin Wilson:

Oh, yeah.

Josh Robb:

Being drafted.

Austin Wilson:

Yeah, think about some of these-

Josh Robb:

A couple million dollars.

Austin Wilson:

Yeah, a D1 college … starting quarterback for a D1 college school is probably easily a six-figure gig, as an NIL college student. So yeah, that is definitely taking a little bit of the money off the table, six figures, maybe even more. Who knows?

Josh Robb:

Yeah. And say, “Oh, maybe I will stay a couple extra years. I enjoy doing this and I’ll get paid.”

Austin Wilson:

Finish my degree in basket weaving and then be a professional basket weaver after football’s over.

 

[9:29] – Limitations & Controversies 

Josh Robb:

As we get into what the rules are here on the NIL, you’ll see, too, it cannot be tied to performance. And so if this athlete gets this deal, and let’s say they don’t do as well-

Austin Wilson:

Or they get hurt.

Josh Robb:

Yeah. They still could potentially still be paid, which would then relieve that burden for them.

Austin Wilson:

So it seems to me that this whole discussion about name, images, and likeness has to have some controversies around it. It can’t just be as black and white. It’s not completely clear.

Josh Robb:

And I think the NCAA kind of saw this because there’s a lot of money floating around. And I mean, there’s already all these rules on recruiting, what coaches can and can’t do when it comes to recruiting. Boosters, what they’re allowed to do. Because there’s a lot of money.

So here’s some of the prohibited things for this NIL policy. So for instance, there has to be a quid pro quo, which means-

Austin Wilson:

It’s a lot of letters.

Josh Robb:

It is. You hear that a lot. Quid pro quo, which means you’re getting something for something. In other words, it can’t be some company that really wants to … in a sense, they’re a booster for the college sport. They say, “Hey, I’ll give you a $500,000 NIL deal, and I’m not even going to ask you to do anything.” It’s got to be something for that payment. You got to do something. Show up, make an appearance, do social media posts. Something has to happen. It can’t be for nothing. No deal or payment can be tied to the performance or achievements. I mentioned that.

Austin Wilson:

Yep. Exactly.

Josh Robb:

So, you can’t say, “‘ll give you $100,000, but if you guys win the March Madness-

Austin Wilson:

I’ll give you another 400,000-

Josh Robb:

500,000. Yeah, you can’t do that. Can’t tie it to performance.

Also, deals can’t be recruiting tools. Meaning, you cannot offer them a deal if they choose this school. So, if you are Nike, and because Nike’s over there, they love Oregon, and so they can’t say, hey, I’ll give you an NIL deal if you come to Oregon. But if you don’t, you’re not going to get the deal. You can’t tie it to a school.

And then finally, schools themselves cannot have deals. So you can’t have The Ohio State University paying an athlete a deal to endorse the school. Can’t do that.

Austin Wilson:

So, these athletes negotiate their NIL deals with-

Josh Robb:

With outside entities.

Austin Wilson:

Okay.

Josh Robb:

Now they’re created organizations and groups to kind of have a spot for them to go to. Because again, it’s just flying all over the place.

Austin Wilson:

Or a fee.

Josh Robb:

I don’t know how that works-

Austin Wilson:

Probably.

Josh Robb:

It’s more like a site where students can then navigate. Now, I will say, from that standpoint too, every school is different. And I mentioned the athlete is the one that’s kind of responsible for this.

Some schools, I think, the University of Georgia, at least early on, said the athlete can’t be wearing a-

Austin Wilson:

Georgia’s shirt, yeah.

Josh Robb:

Georgia Bulldog’s jersey or have the G that they have kind of trademarked that font in your advertisement. Whereas in the same conference, Tennessee says, go for it. Put our team on there-

Austin Wilson:

It’s free advertising.

Josh Robb:

Put our T on there. Do whatever you want. And so it may entice a player, because if you’re a brand and you’re looking at those two choices, I would probably want not only the athlete, but maybe the school that they’re attending’s logo. So maybe I’d get more deals to the Tennessee players if I’m a company than the Georgia players. Because although they may be known, if I don’t have that Georgia on there, some other people … it may not be as valuable.

Austin Wilson:

Absolutely.

Josh Robb:

So, each school’s different. And so, you got to kind of keep that in mind.

The other thing that’s a controversy is there’s these things, they’re called collectives. Which is a group of … I’m going call them boosters, but it may not be. But in general, a group of businesses, groups of people, entities, they form their own for-profit. Or now, a lot of times it’s a non-profit collective. And they pool to then do a NIL deal. And then their job in a sense is to then say, hey, we’re going to offer you our collective. You’ll get a NIL deal with us, and we’ll then use you for other entities. So, they’re kind of the middle man. But since they’re coming together, you may get a bigger deal. But then maybe there’s 10 companies in this one group and you get one deal with them. But all 10 can use your image or likeness or tweets or whatever you want to do.

Or … and this is kind of what I thought was a cool thing. They may then say, okay, we’re a group of nonprofits. Alone we wouldn’t be able to entice you. But as a group, maybe we can offer you a deal where you’d be enticed. And then as a nonprofit, we could do celebrity appearances, a golf outing where you would show up and we could utilize you to fundraise. Which I think is a cool idea.

But the concept there has been a problem because these booster groups have kind of made a fuzzy line in there.

Austin Wilson:

Oh, yeah.

Josh Robb:

Because again, boosters love getting their hands … they got a lot of money to throw around. And so if they can help with recruiting, which goes back to remember those prohibited things. Then that can become an issue.

So, these collectives are now a part of this problem. And we’re going to link in the show notes a couple different websites that gave some information on here. But according to the founder and CEO of NNINFLCR, which-

Austin Wilson:

That’s a bunch of letters in a row.

Josh Robb:

Yes. Which is, again, he’s talking through these endorsements and stuff. He said, these collectives make up 70% of all transactions that happened-

Austin Wilson:

That’s a massive amount.

Josh Robb:

On the app that is designed to help hold these things together.

Austin Wilson:

Wow.

Josh Robb:

So, they were a big player, especially early on. And it became such a big deal that the NCAA released guidance saying that they would consider anything that’s a collective, a group of companies working together to be in and of themselves a booster. Which you’re not permitted to be involved, prior to them committing.

So that goes back to talking about the high school students. They cannot enter in a deal as a collective with a non-committed athlete. So, a high school student, they can’t show up a group from Columbus Collective saying, hey, I know you’re on the fence between where you’re going to go. But Ohio State’s a great school and we got this $500,000 deal floating over here. Can’t happen.

Austin Wilson:

So, they’re really trying to crack down on these collectives kind of driving the ship. Especially as it relates to recruiting.

Josh Robb:

Yes. Recruiting-

Austin Wilson:

Because it had been an issue.

Josh Robb:

Yes. Recruiting’s always been an issue. I mean, there’s been violations prior to this of just students coming for a visit and all these different lavish things being given to them. Or all of a sudden, oh look, this new car for your mom and dad showed up. And oh, it’s just a gift. Don’t worry about it. And so the NCAA’s watching very closely now.

And now high school students, again, you got these students who, they’re just doing their thing in high school. You have parents who’ve never dealt with this before, and now they’re being kind of bombarded with this. It could be an impact on them long-term. They could lose eligibility if they accept a deal and not realize what they’re doing. So, there’s a lot of kind of wishy-washy there on what’s going on.

 

[16:29] – Dad Joke of the Week 

Austin Wilson:

All right, Josh, we got to take a break.

Josh Robb:

Yes.

Austin Wilson:

Let’s have a dad joke of the week.

Josh Robb:

All right.

Austin Wilson:

You need to buckle up because this a good one.

Josh Robb:

I’m ready.

Austin Wilson:

Why did the tomato turn red?

Josh Robb:

Why? Well, they’re always red. But why would it?

Austin Wilson:

They are always red. No, sometimes they’re green.

Josh Robb:

Oh, yeah, it’s true.

Austin Wilson:

But because it saw the salad dressing.

Josh Robb:

Oh no. Got to close your eyes.

Austin Wilson:

I know. Got to do that.

Josh Robb:

I like that.

 

[16:47] – What’s Coming for College Athletes Using NIL Deals 

Austin Wilson:

All right, so we’re going to continue discussions about the NIL. Let’s talk about the future and what is coming.

Josh Robb:

Yeah. I think the more things get settled in, you’re going to see a couple things. One is that you’re going to see that being a deciding factor in where they decide to go.

Back in the day it was, do I like the coaches? Which one gives me the most chance if I want to turn pro? Which one runs an offense that like in football, you hear about the pro style offense. May not win a lot of games in college, but they develop good players. Or this is where my dad went and this is where my grandpa went. I’m going to go there. All those things. Now-

Austin Wilson:

Where am I going to go to make money?

Josh Robb:

Who has a good network? Who has a good network? Because again, they’re not recruiting at this point, but you know where … because you look at prior players. And you could say, oh boy, the last two quarterbacks that were at this school got some great deals. I bet you those are opportunities that are there for me. So that’ll impact decisions on where to go, which means it’s not a pay to play. But the mindset is there that, oh man, I may not say this in my recruiting, but maybe they’ll just find out that there’s some great NIL deals floating around in this because we got a great booster and supporter based.

Austin Wilson:

Absolutely.

Josh Robb:

The other thing, and this is recent, as well, is there’s some updates for the transfer rules. So if you move from one school to another in the past, depending on how or why you moved, you may have to sit out a year, you lose a year of eligibility. And that was to prevent recruiting of current players from one place to another or jumping ship and moving around. There’s always exceptions.

They’ve now streamlined this, that athletes have one transfer without a penalty. In other words, you can transfer once without losing a year of your eligibility, you could play right away. And those are for NCAA, all the different divisions. And now they’re kind of all on one.

And they always have exceptions. If there’s a coaching change or if there is certain things that happen that are outside your control, that also allows you to transfer, even if you’ve done the transfer once. Or if there’s family reasons, things like that, that impact, you can always petition.

Austin Wilson:

Can you imagine the demand for a school if Ted Lasso would start coaching?

Josh Robb:

Oh, that would be it.

Austin Wilson:

Everyone would transfer in.

Josh Robb:

They would be all there.

Austin Wilson:

They would be all there.

Josh Robb:

They’ll be coming over.

Austin Wilson:

Their NIL deals-

Josh Robb:

Oh, they’d be all over the place.

Austin Wilson:

Off the charts-

Josh Robb:

Yes.

Austin Wilson:

Off the charts.

Josh Robb:

But I think this NIL deal and transfer rule are going to play together. Because we actually saw this as one of the articles I was reading, I don’t remember which one. But there’s been a couple players who either threatened to leave if they didn’t get a better NIL deal based on what other players like them were getting. Or that did move based on a new school, seeing other players or recruits getting a good deal. So there’s an overlap between these two rules that is happening.

Austin Wilson:

How is this going to impact college sports in general over the long term?

Josh Robb:

I think it’s going to make it even harder for coaches when it comes to recruiting. They’ve got to be very careful; they’re walking a fine line already.

Austin Wilson:

There’re more rules to abide by.

Josh Robb:

I mean, there’s already rules on when you can call, what you can say, how long you can do it. Again, when those transfer, there’s a portal that they enter. So, if a player says, I’m leaving. They have to tell their current school has two days to put them in this portal that all the other coaches can look at. And then there’s an open window for each season on when you can move. And it’s like you see in the draft.

Recruiting, though, it’s just so tricky.

Austin Wilson:

Oh, I know.

Josh Robb:

Because I’m sure they’ll ask questions like athletes want to know. And so I think coaches and the recruiters are going to have a harder time-

Austin Wilson:

Really careful.

Josh Robb:

And then I think on the other end, too, you’re going to see a lot of high school athletes who know they’re going to be highly recruited, really build their social media and build their presence. So they’re actually more appealing from an NIL standpoint. Is look at me, I have 100,000 Twitter followers, don’t you-

Austin Wilson:

And a 4.0 GPA.

Josh Robb:

Don’t you want me as your spokesperson? Because I already have a large-

Austin Wilson:

They would.

Josh Robb:

Fan base to draw you. So, I think from both ends, you’re going to see from a recruiting side on the universities, it’s going to get trickier. On the other side, players, up to this point, they were trying to build a good sports presence to say-

Austin Wilson:

Oh, yeah. It was all about sports.

Josh Robb:

Look at my highlights, look at what I accomplished. Now it’s also this social media-

Austin Wilson:

There’s money.

Josh Robb:

What can I do so that a recruiter, yeah, you saw me play. But I want those NIL people to also see me as a marketing thing.

Austin Wilson:

So, you know what I just realized, Josh?

Josh Robb:

Yes.

Austin Wilson:

You-

Josh Robb:

Yes.

Austin Wilson:

And I-

Josh Robb:

Yes.

Austin Wilson:

Each still have-

Josh Robb:

Have eligible-

Austin Wilson:

Four years-

Josh Robb:

Four years.

Austin Wilson:

Of athletic eligibility.

Josh Robb:

Let’s do it.

Austin Wilson:

And we waited until after NIL was a thing. So, we can go make some money.

Josh Robb:

I think I have the bod for curling. I think I have the build for that.

Austin Wilson:

And you have the capability to grow the beard and mustache or whatever-

Josh Robb:

As quickly as needed-

Austin Wilson:

To accommodate.

Josh Robb:

I can be ready for it.

Austin Wilson:

Maybe that’s our-

Josh Robb:

There’s some universities-

Austin Wilson:

That could be our calling.

Josh Robb:

That need a curling team.

Austin Wilson:

Have you been curling?

Josh Robb:

I have.

Austin Wilson:

I have not.

Josh Robb:

It’s so much fun. Love it.

Austin Wilson:

We should do that this next winter.

Josh Robb:

We should go.

Austin Wilson:

We’re going to go curling with our wives.

Josh Robb:

Yes. So much fun.

Austin Wilson:

In Bowling Green.

But anyway, yeah, I still have my athletic eligibility. I don’t see that really happening. Curling could be my only outlet.

Josh Robb:

Chess.

Austin Wilson:

I just can’t keep up. Chess, I keep losing to my wife. Who also has athletic eligibility.

Josh Robb:

Yes.

 

[22:19] – What Should Athletes Do to Use the NIL Rule for Their Benefit? 

Austin Wilson:

So maybe she should get in some college chess. So in our final section, before we give our kind of wrap up thoughts. What should students do, Josh, if they’re really considering using this NIL rule for their benefit?

Josh Robb:

Yeah. There’s so much money floating around. Make sure you understand-

Austin Wilson:

Is this taxable money? I’m sure it is.

Josh Robb:

Oh yeah.

Austin Wilson:

Oh yeah.

Josh Robb:

Yeah. You’ll be employed. You’ll get either a 1099 or depending on if you’re … I don’t know if they do contracts versus W2, is probably contract work. But yeah, you will have to pay money, taxes on this.

Austin Wilson:

So, consider that.

Josh Robb:

Yeah. Taxes. Yeah. Don’t spend it all.

Austin Wilson:

No.

Josh Robb:

But understand the rules. What schools am I considering? What do those schools have rules for? What state will I potentially be going to school in? What rules does the state have? And before I commit, what are the things that can and can’t do or say? So understand that because you’d hate to make a decision or do something that drastically impacts your future success.

And then two, when you do write those contracts and get those deals, make sure you have professional help. Make sure there’s an attorney looking over those contracts to make sure it makes sense for you. Make sure you have an accountant and a professional financial advisor helping you manage those deals. Because again, a small percentage of student athletes make it professionally. A lot more are going to be probably getting some endorsement deals, all different amounts. But making sure you are taking the best advantage of that opportunity while you have it means ask the right people, have the right help.

Austin Wilson:

So-

Josh Robb:

Yes.

 

[23:37] – Josh & Austin’s Final Thoughts 

Austin Wilson:

It’s time. What are our thoughts? And I’ll start.

Josh Robb:

Yes.

Austin Wilson:

Woo. I’ve been a 18, 19, 20 year old kid, and first of all, I felt like I was loaded when I had $100 to my name. So I really can’t imagine coming into a six figure deal or a seven figure deal or whatever this is. I do know that while I have high hopes that I would’ve done something responsible with it, I probably wouldn’t have done all the right things.

Josh Robb:

Yes.

Austin Wilson:

I don’t think that someone at that age and maturity level would make good choices. And you hear about all the stories of booze and tattoos and girls and vacations and cars. And that’s now the thing that all the stupid people who go pro in their first year are doing. They can start doing in college now, making rash financial decisions. Where I really think that if you are able to harness some of this … harness your brand, leverage your brand, and get paid for it quite well. You can set yourself and your family up for a generation if you do it right. You are going to be vastly ahead of any peers that you have ever even considered if you’re a little bit wise with your money if you get this now.

So, what that means is, don’t do stupid things, don’t blow it. You can have a little bit of fun with it, but don’t blow it. Do smart things. Set money aside for the future now and oh my goodness, you are just going to be set up. Because like you said, few people actually make it pro and those who do, even fewer have a long-extended career where they’re making a lot of money for years. So, you really have to be thinking about the real world in a real future. And this is a good opportunity to set yourself up, so you really have no worries.

So, I would say be smart, put money to work, invest your money wisely. Don’t go all in on anything, have a diversified portfolio, work with an advisor. I mean, shameless plug, if you don’t have an advisor, we’d be happy to talk to you. We understand the rules a bit, and this is kind of what we do. So, if you have a question about your situation or maybe you came into some NIL agreements, email us at hello@theinvesteddads.com or check out the Invest with Us tab on our website. Because we’d love to help you out because this is a really tough thing to try and go through alone.

I mean, all in all, I can’t imagine what I would’ve done at 19 years old or whatever. So my advice is be smart. What about you?

Josh Robb:

So, I kind of go back and forth. There’s certain aspects I like about this. I think the amount of money that was being made on these athletes without their ability to do anything to earn income, I didn’t think it was fair for them. But I do think there’s a lot of money floating around and there could be a lot of bad decisions made that could impact them. Or just in a sense, they don’t take full advantage of.

There was a survey done in 2019 by the Hope Center for College, and they looked at student athletes. And they asked them some questions, but they found 24% of Division I athletes reported having food insecurity throughout the year. Food insecurity just means that they weren’t sure where they were going to be able to eat next, have enough money to eat. And then Division II and III were similar, 26, 27%.

So again, it happens a lot that huge. Just prior to that, the NCAA allowed all Division I schools to provide unlimited meals to athletes. They were limited on actually how much they could provide prior to that, which is weird. So, I think there’s a lot of opportunity for some lower income families who have kids who are athletes. Sometimes they can’t do college even when it’s a full ride because there are other obligations that they have, and they just can’t afford it. So, I see a value in this.

The other thing that worries me, though, is there’s just so much money floating around for people to … that don’t have the morals to take advantage of these young students and offer them deals to do things or lock them up, or first universities to use that for recruiting.

So, in general, it’s a good step forward. I think there will be oversight rules and regulations. I’d love to see it overseen by a group that can make sure it’s regulated better. But in the end, if it keeps them in school or it keeps them from going straight from high school to a professional sport and allows them to get some education and mature and develop in a more structured setting, I’m all for it. That’s really where I’m at.

Austin Wilson:

So, here’s a question.

Josh Robb:

Yes.

Austin Wilson:

Does this new rule, does this put things like NCAA football back on the radar in terms of the video game world?

Josh Robb:

Ooh.

Austin Wilson:

Because that was one of the big disagreements and reasons why it was gone. Was it was a big controversy of how much money was being made off these athletes and they couldn’t get anything for it.

Josh Robb:

Yeah. Well, I just don’t know if a game developer, if they look at the cost they’d have to pay, they’d probably have to negotiate the deals with almost everybody, right?

Austin Wilson:

Well, or yeah, lump it into-

Josh Robb:

Somehow.

Austin Wilson:

A group deal.

Josh Robb:

Because I mean, if you’re doing everybody’s image, you’re going to have to talk to every athlete or at least-

Austin Wilson:

That’s true.

Josh Robb:

Get some sort of deal. It probably seems harder now than it would’ve been before. Because you just had to get a deal with probably to get the logos of the schools or with the NCAA who maybe has the overall rights. But now you have to get every athlete, or maybe you only have a handful of athletes that have their names and likeness, everybody else is just generic.

Austin Wilson:

Maybe. I don’t know. It could be back on the radar. Because remember the cool-

Josh Robb:

There were some fun games.

Austin Wilson:

At the end of the NCAA football game series, which ended when I was in college. You could create yourself and be yourself all the way until-

Josh Robb:

You could have a-

Austin Wilson:

Graduation.

Josh Robb:

Career.

Austin Wilson:

A career. And then you could export that file and get drafted into the NFL.

Josh Robb:

The NFL one. Yep.

Austin Wilson:

Oh, it was the coolest thing. And then the next year-

Josh Robb:

You could jack your stats up-

Austin Wilson:

Yeah, the next year was gone.

Josh Robb:

Yeah, it was the best. Yes.

Austin Wilson:

Because it was too much money, I’m assuming. So anyway, that was fantastic. I learned a lot, Josh. Thank you for-

Josh Robb:

Yeah, it’s-

Austin Wilson:

Doing some research into that. That’s a unique new law that is available to help athletes out nowadays.

Josh Robb:

I knew about this rule, I’d never really put to the fact that I’ve been seeing a lot more athletes in commercials.

Austin Wilson:

Yeah.

Josh Robb:

You see them in phone commercials now, and this is them taking advantage of that. Which is great. So, I thought that was just … now that I’m aware of it, I’m seeing it more.

Austin Wilson:

So, until next week, stay tuned. Keep your eye on the NIL space because it does change all the time. And as we mentioned earlier, we’d love it if you’d subscribe and leave us a review on Apple Podcasts and just keep listening. If you had someone asking what NIL was or how they could make money or what to do if someone does, send them this episode and it might help them out.

Josh Robb:

That’s right.

Austin Wilson:

All right. Until next Thursday, have a great week.

Josh Robb:

All right. Talk to you later.

Austin Wilson:

Bye.

Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show.

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Josh Robb and Austin Wilson Work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guest are solely their own opinions, and do not reflect the opinions of Hixon Zuercher Capital Management.

This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principle. There is no assurance that any investment plan or strategy will be successful.