The recent relaxation of NIL policies by the NCAA and enactment of state laws concerning it was meant to enable students to earn from playing for their schools. The NCAA policy change was because the organization lost a court case that concluded that it violated Sherman’s antitrust laws. Limiting students from earning from their NIL limited them from working with any other organizations to earn. However, the 2021 NIL policy changes open chances for students to work with brands to earn. Students gained access to huge deals that have allowed them to be instant millionaires. However, many of them have faced the challenges that result from rapid wealth. Student-athletes with money face financial disorders and potential exploitation. Therefore, financial planning is an important subject that all college athletes should learn before engaging in NIL deals. States should include in their NIL laws provisions that require institutions to provide financial planning to students within certain periods after students join student athletics.
One important reason for financial planning is to prevent financial disorders. Henderson (2023) discussed several conditions that may arise from the sudden wealth that the students may experience. For instance, he defined financial disorders as maladaptation that result from financial factors that result in clinical problems that affect their lives and performance in the various aspects of their lives. Such disorders may prevent a person from ripping the benefits of their financial success. For instance, students may fall into gambling and become pathological. Pathological gamblers are addicts who bet compulsively. Such disorders may cause people to fall into debt. Others may suffer from compulsive buying disorder and fail to notice when they are becoming broke. Most of the conditions make it hard for people to save or spend their money responsibly. Physical conditions like fatigue and poor sleep may also result from the other conditions. Learning how to make long-term and short-term plans may help prevent the conditions.
Also, poorly prepared students may be exploited by their kin. Financial exploitation involves people being manipulated by families or forced to give financial support. NIL creates different careers for the students, and when families know about people’s fortune, they may burden them with financial responsibilities that may make it hard for students to live their student lives fully. Students from poor backgrounds may also feel the pressure to elevate their families. While providing support shows responsibility, it should be done with limitations. Proper planning helps people know how to spend their money on themselves and others. It may prevent athletes from spending their money disproportionately on family. It may enable them to save. Usually, most students do not play in professional leagues after their graduation. Therefore, their NIL earnings may be all their earnings from their talents. They should be prepared to save them money and start a future with it. The lack of planning and financial incompetence may cause them to spend without proper budgeting.
Financial education may also save students from exploitation by agents and other parties. Already, there have been several court cases of students suing their agents for either misrepresenting them or wrongly advising them. Nerlens Noel took his agent, Rich Paul, to court for causing him to miss out on a 58-million-dollar deal (Henderson, 2023). If the student were financially competent, he would have known what to do. Financial education will empower student-athletes to make wise decisions that serve their needs and avoid exploitation. Students like Noel will be in a better position to make self-determinations and not only depend on potentially selfish agents.
After reading about the importance of financial education to student-athletes, how states have handled it, and the cases of students having been exploited by agents, I realized that many states had not taken necessary measures to protect students. Also, the NCAA is failing in its role of protecting sports integrity by not creating policies that require financial training by institutions (Henderson, 2023). Now, I understand how vulnerable students can be after earning huge amounts while young. I support the formation of policies that will protect students from possible exploitation and vulnerability to financial strain and disorders.
I have several takeaways from the topic. First, earning lots of money within a short time exposes students to financial disorders and potential exploitation by kin and agents. Second, currently, even though the NIL policies have empowered students to earn, they have to cover the student’s protection from exploitation. Also, many states do not even require schools to facilitate financial training. Therefore, policy changes at the NCAA and state levels should be affected to ensure that students are protected from potential harm. Policy changes are necessary because they will obligate the stakeholders to act appropriately (Henderson, 2023). The current systems in many states where financial education is not required by law expose students to potential dangers that may have long-lasting effects on them. Unless the changes are made and effected, NIL may end up costing students more than benefitting them. State-level policy changes will create the framework for educating students and prevent the adverse consequences of the financial boom that students experience from NIL deals.
Reference
Henderson, T. (2023). It’s about Time: An Analysis of Name, Image, and Likeness Legislation in the United States. Jeffrey S. Moorad Sports LJ, 30, 61.
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