B (4:09)

Before I answer that question, I think it really is important to just take one step back before we take two steps forward. And so to just think about the important business of life, sports. Why it's expanding rapidly due to long term growth trends, predominantly by media rights renewals, but also by live entertainment trends and premium sports and long term wealth accretion. So due to these long term growth drivers, professional sports franchise valuations have expanded rapidly and they very well continue to appreciate into the future. And so what's important to note is that salary caps in professional sports leagues are tied to league revenues and therefore tend to rise as sports franchise valuations increase. In other words, an already lucrative industry may be on a growth trajectory that can compensate for professional athletes with lucrative contracts, providing them with much more power and wealth. Now, how does this apply to college programs? Well, the same idiosyncratic growth trends have benefited NCAA athletic programs. However, college athletes were long prohibited from receiving the same trickle down compensation benefits. Until of course, Gary, as you mentioned, a dynamic shift in NCAA policy reached the pinnacle on June 30, 2021 when the association announced that it would allow incoming and current student athletes to profit from their name, image and likeness or nil. Well, what is it? What is nil? Here are a few examples. Autographs, personal appearances, or even developing and modeling athletic and non athletic apparel and products. And as a result, similar to the trajectory of salary caps for professional athletes, the market for college athlete payments is rapidly growing. As a matter of fact, according to a recent study by Opendoors, projections point to the total nil market exceeding 2 and a half billion dollars in 2026. Now this is nearly a 53% increase year over year. So it's no secret, as you mentioned, that NIL has changed the landscape for college athletics. Now, just to give some context around college athlete universe, there are more than 170,000 Division 1 athletes in the NCAA participating in 24 different sports at over 350 member schools. Now, each of these students is now eligible to earn NIL compensation, presenting for many what is potentially a life changing financial windfall. Now to provide a few examples, according to an nil valuation source on 3, an NCAA college basketballer at BYU named AJ Debona has an nil valuation of approximately 4.4 million. An NCAA footballer at Texas named Arch Manning has an nil valuation of approximately 3.6 million. And an NCAA college basketballer at LSU named Flo J. Johnson has an nil valuation of approximately one and a half million. She's actually the top female compensated nil athlete.

A (7:19)

And I've heard of Arch Manning. I can understand that, you know, he'd have such a high value, especially, you know, his dad has done some things in sport. But could you imagine, just for a moment, get in the head of these students. They have an exam due Monday, they have to write an essay. And also for $100,000, they have to, you know, model some sports gear on the weekend. What a crazy. It was already crazy just doing sports at that level and going to school. Now you're layering on it a whole nother job that is really your business, your brand. So I gotta ask, if we're helping out the family and the student and we're trying to build the ideal advisory bench for a rising athlete client, whether it's an nil student or even, you know, they're a little further down the road, a first year pro, what should that team look like and how does the planner's role evolve as the athlete's wealth and complexity grows? Let's dive into that. What should we do?

B (8:34)

Of course, you know, I'm from the multifamily office world and I'm also a pfp. So I'm constantly thinking about these solutions within the context of that framework. And really in our view, as we take a step back, the landscape of athlete advisory is evolving rapidly to treat on field performance and brand potential with equal weight. And as a result, we presented a multifamily office idea concept to help support the next generation of college and pro athletes in their prime and over the long term. Now, just to provide a visual to the audience, because I know this is an audio. At the center of our multifamily office idea concept is the rising college or pro athlete who is working vigorously to create value in three ways. Contract value, brand potential and business opportunities. Now, with equal weight, right. We envision the ideal bench to consist of a multifamily office advisory team and a sports agency team who are aligned and working holistically to protect wealth and maximize value for the rising athlete client. Now, this multifamily office advisory team may consist of A CPA financial planner who is the team lead. It also would incorporate a trust and estate lawyer, a portfolio manager and possibly an insurance advisor. And they manage the responsibilities of wealth forecasting and plan design, tax compliance and reporting, estate and trust planning, investment management, insurance planning, including disability planning and loan out corporation plan and design. Now a sports agency team, just to mention sort of the other half of our idea concept might consist of a sports agent who is a team lead, sports and entertainment attorney, digital marketing manager and public relations contact. And of course they're managing the contract negotiations, endorsement and sponsorships, digital media management, public relations and crisis management. So that's sort of our vision of the multifamily office model readapted for professional athlete or a college athlete. Now within that multi family office advisory team framework, sure, the CPA financial planner's role evolves as the athlete's wealth and complexity grow.

A (10:49)

So Cameron, I imagine you in the room and Jerry Maguire is at the table with his team doing whatever sports agents do.

B (10:58)

Show me the money. I mean we had to say it.

A (11:01)

Yeah, show me the money. Right, exactly. But you know, whether it's a, that's just hard to imagine, but a teenager signing the first nil deal or this applies across the board. It could be a founder closing a liquidity event, could be a grieving spouse inheriting a life changing sum. Really at its core, when you peel back the details, it's sudden wealth. And that can be both exhilarating, which I'm sure it is all the time, but also overwhelming. So Cameron, what do you see as the CPA financial planner's best moves in helping clients? You know, when they're in that exhilaration, but maybe also feeling overwhelmed, helping them make thoughtful values based decisions before. Okay, I'm just going to be real honest here. Before the money burns a hole in their pocket or family members, you know, get hurt or they get lost to taxes or creditors or just plain old avoidable mistakes?

B (12:13)

Sure, all of the client scenarios you presented really require their own thoughtful and customized tax and financial solutions. But of course the commonality in all of the situations referenced is really the sudden wealth shock. And depending upon the circumstances may be joyful or not. For the principal. In any event, this can be an emotionally volatile time. Perhaps a cooling off period is warranted thereafter. Trusted advisor's role is generally to engage in discovery with their clients and pairs family dynamics with tangible assets and structures to help build a multi generational legacy plan. Now, within the context of our conversation today, at a minimum, advising the modern college or pro Athlete or who's doing his first nil deal or signing his first professional contract requires tax minimization, including state tax, residency and job tax planning, creditor and asset protection, trust and estate planning, disability risk analysis and establishment of core investment capital at the early onset. And of course, strategic cash flow planning is paramount, you know, in terms of coming into a sum of money at a youthful age. You know, advisors have to understand the behavioral aspects of the engagement and make recommendations accordingly. So in some situations an advisor might recommend solutions to self limit liquidity in a way for a college or professional athlete who's signed a large contract at a youthful age and there are elevated risks to the financial plan potentially failing. Now this can be as simple as maximizing plan contributions to various retirement vehicles or potentially even forming third party irrevocable trusts where the client relinquishes control or at least indirectly to a portion of their assets. Now lastly, one orthodox investment solution that an advisor would potentially want to recommend is having a small portion of the athlete's asset allocation be invested in cash value life insurance with a low death benefit to mitigate risks over overspending, tax minimization and creditor protection, depending on state law. Yet you know, this is a customized investment strategy and of course should always comply with the DOL fiduciary rule and certainly not be a high cost solution with poor historical performance relative to its peers.

A (14:46)

Very interesting concept. And also the idea of where your state residency is going to be probably plays a big role as well. I like it that you mentioned that now you've worked with some of the wealthiest families in the country and you've seen wealth alone doesn't protect legacy. How do you approach the key conversations? Or maybe you have a framework you bring into the room early to help athlete families or again, any clients facing sudden wealth build, I want to call it alignment between their values and their assets and their future decisions. And Cameron, by the way, I loved how you said the self limiting liquidity. I'd like to see how often that goes well, but of course that's brilliant if you have to put that on the table. Like let's set aside some of this, let's put it out of arm's reach.

B (15:50)

Advisors think about asset allocation in buckets and it is really a derivative of that.

A (15:58)

Yeah, that's brilliant. All right, so it seems so big because how do you, how do you get those values, their assets and potential future decisions to all line up? Because sometimes it's just the athlete you're talking to, but I would guess Most of the time there's other stakeholders that want to make sure that it's handled well. How do you approach that?

B (16:21)

I love this question because it gets into the behavioral consequences of a financial plan failing. And you know, occasionally advisors may be thinking, you know, too quantitative about a solution. So it actually reminded me a phrase that I love, which is that wealth doesn't always change who you are, but it, but it often does accentuate the person that you already are. Right. And so I've kept this in mind as a result and have endeavored to build meaningful relationships with my clients and at the early onset, right. To understand their family, culture, values or heritage in addition to wishes, wants and needs in order to develop a shared purpose, vision and plan for their future. Right. And so in my experience working with ultra affluent clients, this has been the most holistic way to utilize my own technical knowledge and skill set. Then to align client behavioral dynamics with tangible assets and structures to preserve and protect legacy multigenerationally. Now you, you mentioned sort of within the context of, you know, our conversation today, which is college and professional athletes. And look, there are absolutely risks, historic risks that have led athletes down, you know, a path into squandered wealth and bankruptcy. And let me just run through those before I sort of maybe provide a potential, you know, recommendation or solution, something that, you know, we've ultimately thought up as you know, in working with our professional athlete clients. So, you know, a sudden wealth shock due to front loaded income at a very youthful age is absolutely a risk as we've already covered. Now spend their habits often stemming from a lack of financial literacy, increased creditor risks due to large entourages, as you just mentioned. That's why I wanted to cover this list and family and friends dynamics. High taxation, both federally, statewide and possibly internationally if an athlete is overseas. Shortened career spans largely due to earnings losses from career ending injury risk. So the risks are for athletes are quite insurmountable and really the advisor needs to understand all aspects behavioral and technical to provide some of the most sophisticated solutions. At least I think for their financial plan to potentially succeed. What I will say is those are the risks. Now in our experience working with college and professional athletes, we acknowledge that many already have tremendous core leadership skills and work ethic from their experience in the arena. And when paired with their brand value and already existing cultural caches, these qualities and factors can be cultivated into a successful career off the field. So how do we preserve legacy? Well, accordingly for the next generation of college and professional athletes may require strategic planning to help prepare for life out of the arena into the boardroom and multi generationally. Now, this may entail financial literacy training, preservation of social capital and brand value, leadership development and governance and succession planning.

A (19:31)

Well, Cameron, I gotta say this has been extremely enlightening. So for the CPA financial planner listening right now, who finds themselves in the middle of one of those conversations that we opened with where maybe a client just shared exciting news about their child scholarship or a sudden financial windfall, but they're not quite sure how to navigate the next steps. What's one powerful action that our financial planners can take today to start building the right planning path forward?

B (20:06)

I'm going to address that directly, but I want to first provide maybe a few bullet points as to the divergent trends in this professional athlete advisory world. Now, the NFL salary cap for 2025 has risen to 279.2 million per team and it may rise to 390 million per team by 2030. That's a 36% increase according to Patrick Weitzel of Wind Sports Group. Now, the market for college nil payments has risen to 1.67 billion in 2025 and they exceed 2.5 billion in 2026, nearly a 53% increase, according to a study by Opendoors. Now here's the divergent trend and why it's so hard for advisors to help these professional athlete clients historically and why it may be even just as hard to help the college athletes. Now. Nearly 2% of NFL players file for bankruptcy within two years and 16% within 12 years of retirement, according to a study by the NBER. And within two years of retirement, an estimated 60% of former NBA players are broke.

A (21:16)

Cameron, let me just make sure I heard that right. You just said 60% of NBA players are broke within two years of playing in the NBA. Did I hear you right?

B (21:29)

Yeah, and I was just quoting the source, Sports Illustrated.

A (21:33)

Oh my gosh, those are insane numbers. What a desperate need for CPA financial planners. We should put that in neon lights to all professional athletes, those stats, so that they seek out the professional help that they need. And also us as the profession, we need to take it upon ourselves to go, hey, look, here's what happens as an athlete. Do you want that path or should we, you know, get an engagement together so that we can help you be on a different path once the athlete contract is over? Right?

B (22:11)

Yeah, I completely agree, Gary. And you know, as a result of these opportunities and risks, I think the landscape of athlete advisory is evolving rapidly to treat on field performance and brand potential with equal weight. And the CPA financial planners are really the most well positioned to utilize the PFP framework to help provide these meaningful tax and financial solutions to a cohort of college and professional athletes who greatly need their help. So what I would say is our hope is that the PFP members are listening in and can help answer the call for these nil college athletes and pros. So let's get to work.

A (22:51)

PFP Cameron, I love that. Thank you for sharing with our community of listeners. And if you're an advisor out there listening right now and you want to deliver premier financial planning with confidence, you can explore everything the AICPA PFP section has to offer at aicpa.org forward/pfp For 269 a year, AICPA members get access to a library of technical guidance, webcasts, planning tools, expert insights like Cameron's, all designed to help you serve your clients at the highest level. And if you're a CPA with 3,000 hours of financial planning experience already, consider showing your expertise like Cameron does next to your name by obtaining the PFS credential@aicpa.org PFS this is our podcast together. If this episode helped you in your practice, we'd be grateful if you shared it with your professional community. With over half a million downloads so far, the AICPA PFP podcast is helping to advance the profession one listener at a time. This has been Kerry Sinnott for the AICPA Personal Financial Planning Division. Thanks for listening and until next time, keep earning trust through clarity, guiding with compassion, and delivering premier planning that elevates our profession.

C (24:21)

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