One of the many observations of the early days of Name, Image and Likeness is the realization that we are dealing with young people who have very limited understanding of business, finance and marketing. These student athletes, whether they are in college or now in High School have very limited understanding of the choices and decisions they make and how those may have much larger implications. One that I am keenly concerned about its finances and tax implications for High School student-athletes and there families. Here are a couple of Tax considerations that High School families should be considering:
Tax TipS for High School #NIL
NIL creates an opportunity for athletes to learn the ropes about personal finance, budgeting, and taxation at a young age. Consider some basic ground rules and potential issues:
High School athletes are not employees of the school and are generally not employees of the companies paying the athlete for NIL. Generally, High School athletes will be considered independent contractors by the companies who sign them to NIL deals.
Most, if not all, payments an High School athlete receives will have no income taxes withheld, which means if the payment is taxable, tax will be due when the athlete’s tax return is filed. Athletes should budget accordingly for cash-flow purposes, as federal, state, and potentially local income tax may be owed before April 15.
Compensation may be in the form of cash or non-cash items such as clothing, food, sports equipment, gifts, and discounts on products. Non-cash compensation is also taxable income.
State and local tax issues may arise if an athlete resides in one state but attends school in another state — or perform services such as sponsorships, promotions, or events in other states. Those student athletes in boarder states that do or don’t allow NIL need to pay close attention.
Depending on the size of payments the athlete receives, they may need to consider making quarterly estimated tax payments throughout the year to avoid interest and penalties.
Income received for use of NIL could jeopardize an NCAA athlete’s eligibility for need-based financial aid.
Please consult a CPA or tax planning professional for all your business and tax needs.
Again these are just a handful of tips for High School student-athletes and families to consider around Name, Image and Likeness. For more information on how we help schools becoming educated on NIL, please check out http://www.thebedfordagency.com
The Bedford Agency and our CEO, Bryan Bedford have been fielding tons of media request to talk about recruiting and NIL. From our agreement and guidelines with the OSSAA to media requests and podcast. Here is a update list of resources, stories and podcasts to keep you informed on the latest.
Bedford Agency Partners with Eccker Sports to provide High School Coaches and Student-Athletes With Education and Assistance in Recruitment and NIL 10.4.22 Link
OSSAA Passes NIL Guidelines for NIL & partnership with Bedford Agency & Eccker Sports 10.5.22 Link
Helpful #NIL tips for High School Coaches/ADs, Parents and Students! 10.27.22 Link
Still in its infancy, NIL education remains at the forefront of the OSSAA’s goals (Tulsa World) 11.17.22 Link
Oklahoma high school NIL scene is quiet now, but possibilities are vast (Oklahoman) 11.20.22 Link
Much has been made about Name Image and Likeness the past 18 months. From the pro’s to college and now in many states at the High School level all across the United States. So I think it makes sense to share a few pointers to help coaches and parents understand the landscape better.
Education is super critical. Do you understand the rules, the local or state policies and the implications? For coaches/AD’s this is super important to start now and to be that first line of support for student-athletes and parents who being this journey to ensure they are prepared and educated to do things in the right order at the right time.
Focus on why you are a recruit or student-athlete in the first place. School and sports. That should continue to be your focus. If you are not producing in the classroom or on the field, no one will care about you as a brand spokesperson! Keep the priority the priority!
Slow and Steady! Don’t be quick to chase a buck! Doing a mad dash for cash now, could have major implications to your son or daughters future including tax, legal, Pell Grant/FASFA and many more. Please realize that NIL will likely be pretty-messy for a few years while details, process and more come into place. While it’s exciting, please be careful. Ask someone you trust to help you.
Here is a mini #NIL checklist:
*Review your state and school district policies! You HAVE to know the rules before you engage in NIL.
*Start writing down an initial “Business Plan” that states your son or daughters goals, brand vision, timing, how you will manage endorsements and sponsorships, legal and tax planning. When you write this plan and beyond you SHOULD ASK QUESTIONS. Ask them!!! Nothing wrong with asking lots of questions as you enter the NIL space!
*Set up a true business entity, foundation, or corporation. We would recommend you work a CPA to help you set up a business that aligns to your business plan. This can be started at any age, as the benefits could be significant for any student-athlete with a solid plan rooted in common-sense.
*Control your Intellectual Property! Buy your son or daughters personal brand (name) website ASAP. I.e. YourName.Com You want to control this as it’s a way to control there brand long term. If you have a personal brand logo designed already or planning one in the future make sure you have a copyright for it! Clean and scrub all social channels to ensure credibility and to showcase you completely, not just as an athlete. Control your personal brand at all costs! Start posting often on all aspects of your life to create followers even before you start doing NIL deals.
*Personal Brand Vision Statement: Make sure you have planned and aligned what your son or daughter personally want to represent. Are they into fashion, farming, or whatever, then the vision statement should align to that statement? This guide will help you know what you should and shouldn’t do (can help with recruiting honestly). Having this will also align your social activities or endorsements you might them to consider.
*FASFA Planning: Do you understand how NIL deals will impact your the tax/FASFA implications? Have you put money back? Do you realize you will have to disclose your NIL income on your FASFA when applying for financial aid for college?
*Less is more. While its great to chase commercial deals, your son or daughter likely won’t have time to do a bunch of these deals nor actively pursue them, especially balancing school, training, practices, games and whatever is left relative to a social life. Be smart in the early stages of NIL. Remember not every deal is a good deal (short and long term). And please don’t have them tweet out “My DMs are open” …. because honestly just like in life, you should want to be picky with who you do business with!
*Put money back! Hopefully when they do enter into a NIL agreement you do that with a true business plan in mind. If you don’t, please ensure you understand the tax and FASFA implications. Holding some money back on each deal to ensure you are covered from a tax perspective is important. In addition, consider any expenses or tax write offs associated with your new ventures.
*Review EVERYTHING and Be careful with agents. First and foremost, you need to have a contract for every deal you deal. Have someone read the legal terms of these agreements and understand your commitments and deliverables. These could be attorneys, agents or family business friends. These resources can be useful but their are a lot of areas to be eyes wide opened about when considering an agent or marketing representative. If presented with legal documents, make sure you have someone else review it. This could be very damaging very quickly, not to mention the implications on agent selection beyond moving into any professional sports career. Be smart, do your homework!
Today the Oklahoma Secondary School Activities Association announced a guideline clarifying their amateurism policy as well as support of Name, Image and Likeness (NIL) which includes the following statement. “The OSSAA does not specifically prohibit students from engaging in certain commercial activities as an individual. These activities, commonly referred to as name, image and likeness (NIL) will not put a student’s amateur status at risk provided the student meets all the requirements for maintaining amateur status in compliance with Rule 5, and there is no violation of rules prohibiting influencing a student to attend or remain at a member school. (Rule 9).” To read more on the OSSAA NIL guidelines.
“After extensive research and diligence, the OSSAA has selected Eccker Sports as their partner to provide Name, Image and Likeness (NIL) education, guidance and support to the organization and our stakeholders across the state. Eccker Sports is the National leader in providing these services and have partnerships with 10 other states including Texas (Texas High School Coaches Association), Louisiana, New York, Massachusetts and Mississippi among others. On a statewide basis, Eccker has partnered with the Bedford Agency, led by Bryan Bedford who is a longtime friend and associate of the OSSAA and someone well known in sports circles around the state. Bryan will provide a personal touch to the relationship, act as a liaison between the parties and support the activations of the various NIL and educational programs Eccker provides throughout the state.” -OSSAA provided statement
Global strategic alliance set to transform how high school football coaches manage data in the ever-changing world of college recruiting
OKLAHOMA CITY, Oklahoma, June 02, 2022 – Recruit Route, a Bedford Agency brand, announced today that it has entered a Memorandum of Understanding (MOU) with RPM Data to jointly offer a bundled set of solutions that will help transform how high school football coaches manage data for college sports recruiting. Launched in August of 2021, RPM Data is a sports data company revolutionizing how people think, operate and execute with a focus on high school football, college football and the NFL Draft.The agreement combines data and game analysis from RPM Data with Recruit Route – a college recruiting education and empowerment platform – to provide coaches with managed services like best-in-class game and data analysis and turnkey college sports recruiting solutions to enhance the way they work in and out of season.
The collaboration of Recruit Route and RPM Data will help jointly meet the needs of coaches and their athletes and programs. Together, we will provide enormous benefits to improve their existing workflows, help them prepare for games, and support them during the college recruiting process in a truly comprehensive way.
“There is a considerable amount of data at the fingertips of coaches at all levels of the sport that goes unused. Coaches are looking for solutions that are powerful, educational and affordable,” said Kegan Reneau, President of RPM Data. “Partnering with Recruit Route allows us to continue to work closely with coaches to understand and meet their current and future needs.”
“Together with RPM Data, we can transform how high school coaches manage data and game preparation and support them through education and management of the college recruiting process,” said Bryan Bedford, CEO, Bedford Agency & Recruit Route. “We are excited to continue to champion high-quality professional development for high school Coaches through our education and empowerment tools paired with RPM Data’s best-in-class academic eligibility solutions to help transform this industry.”
About Bedford Agency Bedford Agency provides actionable insight and expertise for companies, coaches, student-athletes and families navigating the world of Sports Business, College Sports Recruiting and Name, Image and Likeness process! A family-owned Christ-centered business that is uniquely positioned to offer expertise, strategic consulting, educational content and technology to transform the college recruiting process like never before. Its rich foundation includes a history around college recruiting, camps, consulting and events. In 2021 the Bedford Agency launched its first set of brands, Recruit Route, Recruit Route Elite, and Transfer Route. Earlier this year, the agency launched Teams Route, a solution intended to help high school and club coaches manage their programs and become educated on recruiting and NIL.
About RPM Data RPM Data is a sports data company using multiple solutions to revolutionize how people think, operate and execute with a focus on high school football, college football and the NFL Draft.