The NCAA recently changed its rules to allow college athletes to start earning money based on their fame and celebrity. In terms of these athletes’ earnings potential, education is key, according to Sandra Richards, managing director of Morgan Stanley’s Global Sports & Entertainment division.

Richards told Yahoo Finance that she’s seen college athletes get opportunities in the range of $10,000 to $2 million contracts.

“It is important to us that [college athletes] are armed with knowing how to navigate not only just the deals that are coming at them,” said Richards. “It’s their education but also building the team around them to help them navigate" what might turn into a frenzy of deal-making. Richards advises student athletes considering any endorsement deal to consult with a team of experts that will help them evaluate each opportunity — including an attorney, an accountant and financial advisor.

"You need help navigating this space, especially as it's new," she said.

Morgan Stanley's global sports division, which has more than $100 billion under management, previously limited its college athlete clientele to those declaring for the NFL, NBA, or WNBA draft.

But the recently adopted NCAA policy which allows college athletes to profit from their name, image, and likeness (NIL) starting July 1, has opened up a new potential client base for powerful investment banks like Morgan Stanley. (The change follows a Supreme Court decision in June that found the NCAA’s rigid limits on compensation violate U.S. antitrust law.)

Professional basketball and football players are among the traditional top-earning athletes. With the exception of mixed martial artist Conor McGregor, who tops Forbes’ 2021 list of highest-paid athletes, with earnings of $180 million, the highest paid global athletes that round out the top 5 are soccer stars Lionel Messi ($130 million) and Cristiano Ronaldo ($120 million), Dallas Cowboys quarterback Dak Prescott ($107.5 million), and NBA star LeBron James ($96.5 million).

The NCAA rule change makes it possible for college athletes to start reaping a huge potential financial windfall before they even turn pro. And this applies to sports beyond football and basketball — athletes in volleyball and lacrosse stand to benefit too, especially if they have large social media followings, said Richards.

"There is a world of opportunity going to be open to others outside of the NFL, worlds of football and basketball," said Richards. That includes the chance to "make money either in local endorsements, national endorsements, [and] regional types of businesses trying to engage these student-athletes,” she added.

However, rookie financial traps abound. Morgan Stanley warns college athletes about mistakes that have hurt many professional athletes, like “trusting the wrong people, handing out too much money to family or friends, overspending and not saving for life after” their sports career ends.

Setting out on the right financial footing is key, “whether they’re going to go off and go on to a professional career, or they’re going to go into corporate America or be entrepreneurs,” said Richards.

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