As President Donald Trump attempts legislation to address issues in college sports, wealth managers representing college athletes have some ideas on how they’d like to see the space evolve for managing athlete compensation and NIL deals.
Alonso Munoz, chief investment officer for the SEC-registered investment advisor Hamilton Capital, would like to see universities or the government offer account options for athletes to treat their income more like retirement savings than quick cash. Munoz is also the CFO for Perseus Sports Group, an Atlanta-based talent agency representing high school and college players.
“A lot of our background has been in ERISA-qualified plans, pensions, 401ks — these students, these athletes, have no mechanism right now to save or defer those dollars,” said Munoz. “The university should have a duty or maybe at the federal level, [such as a] Trump Account-style deferred payments to the university, maybe allowing these athletes to participate in the university's retirement system so they can defer some of those dollars and invest those dollars automatically.”
On the heels of Trump hosting a “Saving College Sports” roundtable earlier this month in Washington D.C., the president has formed five committees to discuss legislation, rules, NCAA reform, media and player issues, according to CBS Sports. Members invited to join the committees span figures across sports, universities, conferences, and politics, including Florida governor Ron DeSantis, RedBird Capital founder Gerry Cardinale, and Blackstone’s co-head of private equity David Blitzer.
“The Player Issues Committee includes former athletes, a golf star, and a baseball agent,” said Kirk Loerwald, who leads the Athletes & Artists division at SAX Wealth Advisors. “What it doesn't include is anyone focused on the financial and wealth management side of what these young athletes are actually navigating: tax exposure, cash flow, compressed earning windows, and how to make money earned at 17 last for the next 40 years.”
Top college athletes are earning millions of dollars per year in payments from their school and from NIL deals signed with brands. While the NCAA began allowing college athletes to monetize their name, image and likeness in 2021, last year was the first in which colleges became allowed to pay athletes directly, with up to $20.5 million per school available each year.
“On the policy side, the push to standardize NIL rules makes sense — right now, the system is fragmented, and that creates confusion for athletes, families, and advisors,” said David Kang, CEO of Ducenta Squared Asset Management. “But regulation should focus less on restricting earnings and more on creating structure around it. That means clearer guidelines, better oversight, and built-in financial education at the point of income.”
College athletes remain treated as 1099 contractors, not employees of their university or the NCAA. With most NIL payments arriving as untaxed 1099 income, advisors stress the need to help young athletes avoid overspending and brace for the hefty tax bills that arrive months later.
“A lot of these NIL deals, kids are 17. They're not legally able to sign. So who's in control of the money? I just think it's ripe for mismanagement,” said Loerwald.
State lawmakers are rolling out new rules to help their colleges compete for top athletes by offering tax breaks. Arkansas now exempts NIL earnings from state income tax, and Mississippi has pursued similar legislation to keep up with Southeastern Conference counterparts in Florida, Texas and Tennessee, which already have no state income tax.
“We think that that could create some kind of a flight risk for athletes, similar to what we see at the federal level with big tech CEOs or really wealthy folks that move from New York to Florida or California to Texas or Tennessee,” said Munoz. “That same concept that we deal with at a really high level can be applied to these athletes, where if Florida is not taxing in NIL dollars at the state level, and there's no state income tax, why would someone play in New York or California?”
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