OAN- Associate Professor Sees Real Need to Share Accounting Expertise in the Face of Changing NIL Rules for Student-Athletes

The NCAA’s decision to allow student-athletes to profit from their Name, Image and Likeness (NIL) has opened up some great opportunities for student-athletes at every level. But, at the same time, it has brought about challenges that student-athletes often aren’t aware of — and one of these is taxes. Associate Professor of Accounting Willie Reddic of the Whitman School has made it his priority to help student-athletes across the University brush up on their financial literacy to make sure their profits don’t turn into problems. 

“The average student-athlete does not usually understand that taxes have to be paid on NIL income, whether that be a paycheck for a sponsorship, receipt of merchandise or even cash for a promotional appearance,” he explains. “I’m not talking as much about those who are going into the NBA or NFL and making millions, as they can afford taxes and tend to have plenty of advisors around them. I’m looking more at helping those who are making a modest amount of money on their NIL while in college but have no idea that there are tax implications or what to do about that.” 

Reddic’s interest in NIL and taxes comes from his accounting background and love of sports, but it also stems from an interest in helping student-athletes, particularly those from underserved or underrepresented backgrounds, who often don’t have the guidance or resources needed to avoid costly mistakes.  

In addition, Reddic actively contributes to maintaining the academic and organizational integrity of Syracuse Athletics by serving as a member of the Syracuse University Faculty Oversight Committee for Athletics. In this role, he leverages his expertise to provide valuable insights and guidance, ensuring that the University's athletics department operates in accordance with the highest standards. His involvement in the committee showcases his commitment to upholding the principles of academic excellence and integrity within the realm of collegiate sports at Syracuse University.  

According to Reddic, any NIL earnings — large or small  —are paid to student-athletes as independent contractors, so individuals receive gross earnings. They also receive a 1099 form at tax time, so the IRS is aware of the income they’ve received. Reddic acknowledges that the IRS is currently several years behind in tracking unpaid taxes due to the pandemic and lack of staff, so it could be several years before it catches up with student-athletes who don’t pay taxes on NIL earnings. But eventually the IRS will come calling. By that time, NIL money may be long gone, leaving some student-athletes owing not only back taxes but also hefty penalties and fines. 

“Sometimes student-athletes are paid in the form of merchandise, equity in a startup company or even cash via Venmo, but they need to understand that that’s still income,” he explains. “Even if student-athletes are aware that they will owe taxes on NIL money, they also need advice from an accountant on ways to lessen the amount owed by tracking deductions. And these are still complicated issues for athletes — and even accountants — as the NCAA rules remain vague.” 

To provide a better sense of the financial impact of NIL income, Reddic held a panel discussion sponsored by the Whitman School and Syracuse Athletics in January with a panel of experts from Los Angeles-based NKSFB, the largest business management firm in the country, which has years of experience advising celebrities, athletes and ultra-high net worth individuals from Tom Cruise to LeBron James. Panelists included Craig Brown, partner and co-head of the sports division at NKSFB and a former minor league baseball player; Daniel Moore, CPA, tax partner, from the firm’s New York office; and Mark Silah, CPA, CFP, who specializes in estate tax planning, generational wealth planning and information on how tax laws can differ from state to state.  

Many in the audience were Syracuse University student-athletes, coaches and administrators who wanted to educate themselves on NIL regulations. After the event, a few students approached Reddic to express interest in pursuing this challenging new aspect of the accounting profession. “This is a growing area within the field and an opportunity to rebrand the accounting profession a bit,” Reddic says. 

“NIL is still the ‘Wild, Wild West.’ NCAA rules regarding NIL continue to evolve and remain unclear — but the IRS isn’t going to be sympathetic to that. I’d like to see Syracuse University become the go-to school for NIL-related financial literacy,” says Reddic. 

 “Between Whitman and other schools on campus, like Falk and Newhouse, we have a number of colleagues who are innovators in the business of sports. So I think we could create something new and special here,” he adds. “NIL issues and questions are not going away, so there’s no reason why Syracuse University shouldn’t be the frontrunner in this space.”