Modern Athlete, Modern Challenges: From NIL to Legacy Planning

The landscape of professional athletics has undergone a seismic shift in recent years. Today’s athletes face opportunities and challenges that would have been unimaginable just a decade ago. From Name, Image, and Likeness (NIL) rights to complex business ventures and long-term wealth preservation, the modern athlete operates in an environment that demands sophisticated legal and business acumen. These evolving challenges require comprehensive, forward-thinking solutions that address both immediate opportunities and long-term strategic planning.

The NIL Revolution: Opportunity Meets Complexity

The introduction of NIL rights has fundamentally transformed how athletes can monetize their personal brands. For the first time, student-athletes and professionals alike can capitalize on endorsements, social media presence, and personal appearances in ways that were previously prohibited or highly restricted. However, this newfound freedom comes with significant responsibility and complexity.

Many athletes find themselves thrust into the role of business owner without the foundational knowledge typically required to navigate entity formation, tax implications, and regulatory compliance. The question isn’t whether to capitalize on NIL opportunities — it’s how to do so effectively and sustainably. Proper entity formation can provide crucial liability protection and tax advantages. Understanding the interplay between personal income, business revenue, and tax obligations becomes essential to maximizing these opportunities while avoiding costly mistakes. Establishing the proper legal and tax framework from day one ensures that NIL income enhances rather than complicates an athlete’s financial picture.

Protecting Against Exploitation: Family and Brand Management

Success attracts opportunity, but it also attracts those who would exploit that success. Unfortunately, business ventures and endorsement deals can sometimes transform from beneficial partnerships into exploitative relationships that damage both finances and friendships.

Effective brand protection requires establishing clear boundaries, conducting thorough due diligence, and structuring deals that preserve an athlete’s long-term interests. This means creating systems for evaluating opportunities objectively, establishing family employment policies that protect both business interests and personal relationships, and building contracts that include appropriate exit strategies and performance metrics. Putting these protections in place can empower an athlete to make informed decisions while maintaining the relationships that matter most to them.

From Income to Investment: Building Lasting Wealth

Perhaps the greatest challenge modern athletes face is the transition from active income generation to long-term wealth preservation and growth. Athletic careers are inherently finite, and the income they generate — while potentially substantial — must be stewarded carefully to provide security for athletes and their families long after retirement.

This transition requires sophisticated investment strategies that account for risk tolerance, liquidity needs, tax implications, and legacy planning goals. A wealth management approach that integrates legal, tax, and investment planning to create comprehensive strategies tailored to each athlete’s unique circumstances helps athletes create security and support family goals across generations.

The Path Forward

The challenges facing modern athletes are complex, but they’re not insurmountable. As athletes know better than most people in business, you’ve just got to learn how to play the game. By partnering with an experienced team of advisors, an athlete can navigate the intersection of law, business, and personal values to build lasting success.

To learn more, reach out to Kevin Slaughter, Stuart Kohn, or another member of LP’s Modern Athlete focus area.