Why College Athletes Should Be Studied Like Lottery Winners
Research literatures converge on the same warning
Behavioral economists have spent decades documenting what happens when people receive money they weren't structurally prepared for. Lottery winners. Inheritance recipients. NFL retirees. The findings are consistent across all three populations and the pattern maps almost exactly onto the NIL landscape.
The difference: those populations were studied. College athletes aren't.
We decided to start. The full data report from our Financial Preparation for First NIL Income survey will be available exclusively to NIL Forum members in the first week in April.
The academic literature suggests this combination produces predictable outcomes. Our survey data suggests the conditions for those outcomes are already in place.
What the research tells us
The most direct parallel is a 2015 American Economic Review paper by Carlson, Kim, Lusardi, and Camerer. Studying NFL players drafted from 1996 to 2003, they found that players begin filing for bankruptcy soon after retirement and continue at a high rate through at least the first 12 years — and that total career earnings and career length had surprisingly little effect on the risk of bankruptcy.
Lottery research tells a parallel story. Hankins, Hoekstra, and Skiba (2011) found that lottery recipients of $50,000–$150,000 were 50% less likely to file for bankruptcy in the two years immediately after winning — but equally likely to file within five years.
Inheritance research adds an age variable. A 2012 Journal of Family and Economic Issues study found that younger recipients saved only about half of their inherited wealth, losing the rest to spending or poor investments.
NIL athletes are younger than any population in any of these studies.
By the numbers
When asked whether they had a budget or financial plan before signing their first NIL deal, 87% said no. The money arrived. The preparation didn't.
When asked who explained the tax implications before they received NIL income, approximately 38% said nobody. When tax advice was offered, agents and attorneys were cited more frequently than certified financial advisors.
When asked whether they felt financially prepared at the time of their first NIL payment, approximately 72% said no — yet most of that group had taken no steps to prepare before the money arrived.
Between the lines
In the financial literacy research, the most predictive variable for poor outcomes is not income level — it is the gap between financial confidence and financial competence. People who feel adequately prepared while lacking the structural tools to manage money are the highest-risk group. They don't seek help because they don't believe they need it.
Our data suggests NIL athletes are exhibiting exactly that pattern. No plan. Feeling okay about it. First payment arriving anyway.
The bottom line
Lottery winners, NFL retirees, and inheritance recipients all had one thing in common: nobody was watching the entry point. The money arrived. The preparation didn't. The outcomes followed. College athletes are now the largest unstudied population entering a sudden income environment. The question isn't whether the pattern will repeat. It's whether anyone will intervene before it does.
Want the data behind the decisions?
Every month, the NIL Forum delivers a members-only briefing from the country's largest ongoing NIL poll — 5,000+ college student-athletes and 1,000 high school prospects — plus a live webinar from a leading NIL industry voice. If you touch Name, Image, and Likeness — the NIL Forum membership community was made for you.
Founding member pricing available until April 15.
About Bill Carter
Bill has advised brands on Name, Image, Likeness for 25 years—first in pro sports, now at the college level. He was the Co-Founder of the Gen Z sports agency Fuse, which he sold in 2019. In 2020, he founded Student-Athlete Insights and consults on NIL strategy with Fortune 500 companies and 30+ DI universities. Read more about Student-Athlete Insights.
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