How One Company is Helping Turn NIL Wealth Into Generational Wealth

Scout empowers college athletes at schools like Auburn, Iowa, Mississippi State, and Texas A&M with financial tools, while assisting institutions in managing NIL earnings and revenue-sharing payouts

Feb 10, 2024; Gainesville, Florida, USA; Auburn Tigers head coach Bruce Pearl yells while holding guard Chaney Johnson (31) during the first half against the Florida Gators at Exactech Arena at the Stephen C. O'Connell Center. Mandatory Credit: Matt Pendleton-Imagn Images / Matt Pendleton-Imagn Images

For many college athletes in revenue sports, the NIL era has transformed their lives overnight. By 18, some athletes earn six-figure deals, while the most elite are cashing checks that rival rookie professional contracts. Yet, behind the headlines and windfalls lies a pressing issue: many athletes need more financial education and resources to turn short-term gains into long-term stability.

It is not only the most elite athletes who are at risk: within men’s football and basketball, a healthy portion of players earn six-figure compensation for their talents on the field, not to mention any earnings they make from endorsement deals outside their respective NIL collective deals. This financial windfall for student-athletes isn’t bad; it has provided equity, empowerment, real-world education, and an incentive to pursue entrepreneurial ventures. 

What's actual market value for a student athlete in this year's cfb transfer portal?

Leveraging @PFF grades as a baseline of player quality, and 1000+ contractual data points, here is the first publicly released collective compensation-by-position valuation for the 2024 season. https://t.co/B8LOneq7g4 pic.twitter.com/Ti7xWe2SMI

— Jason Belzer (@JasonBelzer) December 3, 2023

Regardless of student-athlete status, many young people have yet to receive financial education and enter their adult lives without a framework to maximize their wealth. Improper budgeting, a lack of understanding of in-kind compensation (and its tax implications), and little future planning have not afforded student-athletes the vast lifelong benefits that NIL has the potential to provide.  

This dilemma is where Scout has emerged. A platform built for college athletes by former college athletes, Scout tailors its offerings to account for the distinctive realities of young individuals with high earning power. Athletic departments that partner with Scout can offer student-athletes many valuable tools through the Scout app, including personal financial coaching, LLC creation, tax preparation and execution, and the complementary opening of savings and investment accounts.

Beyond personal financial assistance, Scout provides schools with payment distribution tools to manage revenue-sharing payouts. With a $20,500,000 NIL salary cap looking to begin in 2025, Scout includes salary cap management tools tailored to help administrators oversee roster budgets and player valuations. 

Knowing the benefits these tools provide student-athletes (and the recruiting incentive they provide), several schools, including Auburn, Iowa, Mississippi State, and Texas A&M, have partnered with Scout to provide these services to their players. The company’s high-profile advisors, Chris Paul, Vernon Davis, and Jimmer Fredette, also give credibility to the platform, its mission, and its capabilities.  

Founded by Michael Haddix Jr., a former Sienna basketball player and son of an NFL fullback, Haddix uniquely understands what life looks like with athletic checks coming in and what life looks like once those checks stop. After a career managing the wealth of high-profile athletes, he has applied his experience to the changing collegiate world through Scout.

Inadequate financial literacy is an issue for any young person, but for college athletes, this dilemma is critical to address. Most people’s most lucrative earning years are well into their careers, allowing them time to make financial mistakes when they’re young and be more savvy when the bigger paychecks come rolling in. For high-level college athletes, this traditional path is inverted; for many student-athletes, the most lucrative earning years of their life could be between the ages of 18-23 –– not being benefited by the same learning curve most can enjoy. 

Any former student can attest to hearing a common saying: “Only 2% of college athletes make it to the pros.” Most student-athletes remember hearing that and thinking they are among those 2%. Unfortunately, statistics don’t often lie, and the mentality that has pushed student-athletes to elite competition at the collegiate level can ultimately instill a belief that lucrative athletic earnings will continue beyond their collegiate eligibility. 

Sports are fickle. One wrong turn in practice and a career can be done. Utilizing Scout to help the process for athletes and provide uniquely tailored guidance can ensure that athletes who cannot make the next step or have their careers ended by forces outside of their control can maximize collegiate earnings and utilize them as a springboard for the rest of their lives. 

Colleges provide athletes with food, housing, scholarships, and virtually any other necessities, so the cost of living for a student-athlete is incredibly low. A tool like Scout can be extremely impactful in helping athletes visualize the benefits of saving and investing. 

A top 150 defensive lineman is projected to earn roughly $150,000 a season; if they were to invest 40% of their gross earnings ($5,000 a month) in an investment fund with a 10% return, after 4 years, they would have $300,000 nest egg that has accrued over $50,000 of interest. If they don’t add another dollar to that fund after completing their college career, the account will bear $643,000 by the time they turn 30. 

The necessity of these services will only become more critical soon. With revenue sharing poised to begin in July 2025, Power 4 schools will distribute roughly $20,500,000 in annual payroll to their athletes. Group of Five and mid-major schools will likely provide athletic compensation below the Power 4 salary cap. 

With students further increasing their earning power and cashing in directly from schools for the first time, financial competency is crucial to maximizing their earnings for the long term. Placing the right tools in student-athletes’ hands can ensure that the benefits afforded by NIL do not last only for an athlete’s athletic journey but for a lifetime.