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A new company co-founded by former NBA champion Kendrick Perkins is offering college athletes upfront cash in exchange for a portion of their name, image and likeness deals, an arrangement some consumer protection experts and financial advisers say could prey on young athletes.

The company, Nilly, offers athletes upfront payments ranging from $25,000 into the hundreds of thousands, said Perkins and his co-founder, Wall Street veteran Chris Ricciardi. In return, Nilly gets the exclusive rights to use or sell the athlete's name, image and likeness for up to seven years, and the company and its investors receive between 10% and 50% of the player's NIL earnings during that time period.

A trio of consumer finance experts who reviewed the Nilly contract said parts of the deal resemble a high-interest loan, and multiple financial advisers who work with college athletes raised concerns about whether the company is offering quick cash that comes with too steep a price.

"To me it feels like you are preying on people who need the capital now and using that to cloud their focus on the future," said Michael Haddix Jr., whose company Scout provides financial education seminars to college athletic departments. "It feels predatory, and it's capitalizing on young people who need money and haven't thought through the long-term implications."

Utah law professor Chris Peterson, who was previously an adviser for the federal government's Consumer Financial Protection Bureau, said several parts of Nilly's contract reminded him of other financial products that are labeled as investment opportunities but function as loans.

"These are trashy products designed to take advantage of young kids," Peterson said.

ESPN obtained a copy of one Nilly contract that lays out a $50,000 payment to a high school senior in exchange for the exclusive rights to sell his name, image and likeness for seven years. In that contract, Nilly and its investors will receive a 25% cut of the player's NIL earnings for the length of the contract, or until Nilly earns a total of $125,000 (2½ times its initial investment), whichever comes first. Ricciardi said the percentage of NIL money that Nilly takes from an athlete can be as high as 50%, and a spokesperson said Nilly's share can be as low as 10%.

AbC? wrote:Eh it could be a lot worse:

ESPN obtained a copy of one Nilly contract that lays out a $50,000 payment to a high school senior in exchange for the exclusive rights to sell his name, image and likeness for seven years. In that contract, Nilly and its investors will receive a 25% cut of the player's NIL earnings for the length of the contract, or until Nilly earns a total of $125,000 (2½ times its initial investment), whichever comes first. Ricciardi said the percentage of NIL money that Nilly takes from an athlete can be as high as 50%, and a spokesperson said Nilly's share can be as low as 10%.

That there is a upper limit of return for the company makes it less predatory than it otherwise could be. There is a level of risk for the company too if the athlete gets injured or in some way doesn't get the NIL money that is expected.

dTox wrote:

Utah law professor Chris Peterson, who was previously an adviser for the federal government's Consumer Financial Protection Bureau, said several parts of Nilly's contract reminded him of other financial products that are labeled as investment opportunities but function as loans.

"These are trashy products designed to take advantage of young kids," Peterson said.

Aventador wrote:if you bothered the read the article, it's a reasonable allocation of risk. nothing shyster about it.

Fox, Pierce and Peterson -- the Utah law professor -- all said Nilly's contracts include concerning clauses that make it easy for the company to determine that an athlete had breached the agreement.

For example, if an athlete does anything that Nilly determines to be "injurious to the reputation of the company," Nilly can terminate its deal, according to the contract obtained by ESPN. Ricciardi said the language is a "boilerplate" morality clause that exists in all licensing contracts. But Pierce said if Nilly found an athlete had violated the terms of their deal, the contract gives the company options to keep the athlete's future earnings until the contract date ends or sue him or her to recoup the initial upfront payment.

"The promise here that if you don't make it big you don't have to pay anything back has a lot of fine print underneath it," Pierce said.

Badonkadonk wrote:

Aventador wrote:if you bothered the read the article, it's a reasonable allocation of risk. nothing shyster about it.

What? The entire conclusion (final section) lays out the concerns with it very clearly. This is the end of it:

Fox, Pierce and Peterson -- the Utah law professor -- all said Nilly's contracts include concerning clauses that make it easy for the company to determine that an athlete had breached the agreement.

For example, if an athlete does anything that Nilly determines to be "injurious to the reputation of the company," Nilly can terminate its deal, according to the contract obtained by ESPN. Ricciardi said the language is a "boilerplate" morality clause that exists in all licensing contracts. But Pierce said if Nilly found an athlete had violated the terms of their deal, the contract gives the company options to keep the athlete's future earnings until the contract date ends or sue him or her to recoup the initial upfront payment.

"The promise here that if you don't make it big you don't have to pay anything back has a lot of fine print underneath it," Pierce said.

Perk far from alone in targeting College athlete fear and uncertainty, but it's still scummy. I mean, look at the title of the piece lol.