What Is NIL Money?

NIL (Name, Image, Likeness) refers to the earnings college athletes can make by endorsing products, signing sponsorship deals, or licensing their name, image, or likeness for various purposes at fair market value.

Before 2021, even though the NCAA generated billions of dollars annually, student-athletes were prohibited from profiting off their achievements or popularity. That restriction was lifted with the introduction of NIL policies, giving athletes new opportunities to earn money through promotions, branding, and media partnerships—all while continuing their collegiate sports careers.

What Does Name, Image, and Likeness (NIL) Mean?

NIL compensation is the income college athletes can earn by monetizing their personal brand. This includes:

• Promoting products on social media
• Partnering with brands for endorsements
• Appearing in commercials
• Licensing their likeness for video games

Since July 2021, the NCAA has allowed athletes in all divisions to take advantage of these opportunities without compromising their eligibility. This has given athletes the freedom to build their financial futures while pursuing their education and sports goals.

Which States Have NIL Laws?

The NIL debate began decades ago but gained momentum after California passed the “Fair Pay to Play Act.” Since then, over 30 states have introduced laws supporting NIL opportunities for athletes.

Some examples include:

• California: Effective since January 2023
• Florida: Active since July 2021
• Texas: Effective from July 2021

In these states, athletes can capitalize on NIL opportunities, provided they adhere to the regulations set by their state, college, or conference.

How Do Athletes Earn NIL Income?

Athletes can partner with brands of all sizes, from local businesses to global companies. For instance, a small diner near campus may sponsor a basketball player for local marketing, while a global apparel brand might collaborate with a gymnast for national campaigns.

Smaller influencers, like those with under 100,000 followers (micro-influencers) or under 10,000 followers (nano-influencers), are particularly sought after by brands due to their authenticity and cost-effectiveness.

How Much Can College Athletes Earn?

Earnings vary widely based on factors like an athlete’s sport, performance, following, and fame. While some deals start at $1,000 to $10,000, top-tier athletes often earn six or seven figures through endorsements and sponsorships.

Do Athletes Need to Pay Taxes on NIL Earnings?

Yes, any income earned through NIL deals is taxable and must be reported on federal and state tax returns.

Many athletes choose to form Limited Liability Companies (LLCs) to simplify tax management and gain legal protection for their earnings.

That’s where StartGlobal comes in.

Why Should Athletes Form an LLC for NIL Earnings?

Setting up an LLC offers multiple advantages:

• Tax Benefits: Makes it easier to manage income and expenses.
• Legal Protection: Separates personal assets from business liabilities.
• Professionalism: Enhances credibility when negotiating with brands.

Starting a Business as a Student-Athlete

NIL rights have opened doors for college athletes to start entrepreneurial ventures while still in school. Although some college athletic departments assist students in finding sponsorships, managing the business side of NIL deals can be challenging.

At StartGlobal, we make it simple.

• We help you set up LLCs in the United States in less than five minutes.
• Our services include assistance with business bank accounts, tax compliance, and more.
• With StartGlobal, you can focus on your sports and studies while we handle the rest.

Get Started With StartGlobal

If you’re a student-athlete eager to make the most of your NIL opportunities, we’re here to help.

• Expert Guidance: Personalized support tailored to your goals.
• Hassle-Free Setup: Form your LLC quickly and efficiently.
• Ongoing Support: Stay compliant with taxes and regulations.

Start building your business today with StartGlobal.

FAQs

What does “likeness” mean in NIL?
“Likeness” refers to identifiable characteristics like physical appearance, playing style, or mannerisms that make an athlete recognizable.

Where does NIL income come from?
NIL income comes from sponsorships, advertising campaigns, and other promotional activities.

Who are the highest-earning NIL athletes?
Notable names include Bryce Young, Olivia Dunne, and Sunisa Lee, who have secured high-value endorsement deals.

Ready to begin?
Visit StartGlobal and discover how we can help you transform NIL opportunities into a thriving business!