OT: Kendrick Perkins co-founded 'predatory-ish' NIL cash upfront company

[MrBigShot]

What a colossal scam bag.

[hippesthippo]

https://www.espn.com/college-sports/story/_/id/41664466/nilly-nil-company-college-athletes-kendrick-perkins-consumer-protection-experts

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.

While other companies sell investors a stake in athletes' future professional salaries, Nilly says it is the first and currently only company to offer cash advances on college NIL dollars. Several agents, athletic department employees and others who work in the college sports industry told ESPN they were unaware of any other company that was paying college athletes in exchange for a cut of their NIL earnings.

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%.

So not only does he give horribly bad and uniformed takes on TV as an analyst... He's now part of a company that will try to exploit student athletes coming from limited means and in return for an upfront cash advance secure the ability to potentially get up to 50% of what that player can earn in NIL.

Wow, that's worse than a payday advance type of loan. It sucks knowing that some families are in dire enough circumstances that this would seem worthwhile for them.

[sikma42]

Granted ESPN is all about conflict of interests, but if Perkins is on a draft show and he starts talking about a guy, is he an analyst or a promoter?

After watching the Bronny coverage…most of those guys are promoters


Sent from my iPhone using RealGM Forums

[Kurtz]

This is just the venture capital model applied to sports licensing. They hand out a few million in tiny cash advances to high school kids, hope one of their kids becomes a 1 and done lottery pick and then get 4-5 years of exclusive rights for big sneaker and cola endorsement contracts.

And who knows maybe some of them even sign a second contract. ( )

Yes, except Angel investors can make 100x-1000x their investment if they hit on a unicorn (ie AirBnB), whereas here, their return is capped at 2.5x investment. It's a terrible business model for Perk tbh.

[Kurtz]

https://www.espn.com/college-sports/story/_/id/41664466/nilly-nil-company-college-athletes-kendrick-perkins-consumer-protection-experts

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.

While other companies sell investors a stake in athletes' future professional salaries, Nilly says it is the first and currently only company to offer cash advances on college NIL dollars. Several agents, athletic department employees and others who work in the college sports industry told ESPN they were unaware of any other company that was paying college athletes in exchange for a cut of their NIL earnings.

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%.

So not only does he give horribly bad and uniformed takes on TV as an analyst... He's now part of a company that will try to exploit student athletes coming from limited means and in return for an upfront cash advance secure the ability to potentially get up to 50% of what that player can earn in NIL.

Wow, that's worse than a payday advance type of loan. It sucks knowing that some families are in dire enough circumstances that this would seem worthwhile for them.

It's not a loan.

[jazzfan1971]

I don't see anything wrong with this.

[PushDaRock]

This is just the venture capital model applied to sports licensing. They hand out a few million in tiny cash advances to high school kids, hope one of their kids becomes a 1 and done lottery pick and then get 4-5 years of exclusive rights for big sneaker and cola endorsement contracts.

And who knows maybe some of them even sign a second contract. ( )

Yes, except Angel investors can make 100x-1000x their investment if they hit on a unicorn (ie AirBnB), whereas here, their return is capped at 2.5x investment. It's a terrible business model for Perk tbh.

It really just doesn't make too much sense at all, it's almost like penny stock trading but without the uncapped upside.

I almost feel like there has to be another angle here where maybe they expect to lose money on this while building up a clientele base that leads to some other verticals.

[Lalouie]

i "think" i get it now???

it's basically a loan to collegiate athletes who are on the short end of the nil food chain. an investment in their image earnings potential, which sounds like a tough nut for perknilly. this is no govt loan open to everyone,,,it's for a select group mined by perknilly. it's one thing if you're a budding star with pro potential. it's another if your potential is working at home depot. in this light, if perknilly focuses on t&f and s/w olympic athletes, I'M ALL FOR IT

could work great, could flop, or could be scandalous. i think it will flop. if perknilly is looking to back image potential collegiates, there's no template to follow other than they'll all look hot. does anyone remember allison stokke? over a decade ago she was THE HOT pole vaulter out of hs who went to cal berkley. she looked like jennifer beals! she did ok in t&f but she did better selling her fame and started modeling. she got so many followups she had to hire an agent to handle it all. that's all perknilly is. that was a decade ago. people today are making money thru social media by doing nothing. so i don't know where perknilly fits in.

so like there's this one ucla dance team cheerleader who's been getting tons of eyes and a lot of ink. i'll bet she's already cashing in but i wouldn't be surprised if perknilly goes that route too

[meekrab]

This is just the venture capital model applied to sports licensing. They hand out a few million in tiny cash advances to high school kids, hope one of their kids becomes a 1 and done lottery pick and then get 4-5 years of exclusive rights for big sneaker and cola endorsement contracts.

And who knows maybe some of them even sign a second contract. ( )

Yes, except Angel investors can make 100x-1000x their investment if they hit on a unicorn (ie AirBnB), whereas here, their return is capped at 2.5x investment. It's a terrible business model for Perk tbh.

Presumably it's not actually capped but their %age drops after the 2.5x mark.

[NBA4Lyfe]

perkins dont own nothing, just another "face" like rich paul for lebron.. klutch sports probably has their hands in this somehow since klutch is the reason perkins was hired by espn in the first place

[dirkdiggler4177]

This is wrong when there is only one company that offers it. Soon a lot of others will get it. This is good for them because many will never make any money after college.

[hippesthippo]

https://www.espn.com/college-sports/story/_/id/41664466/nilly-nil-company-college-athletes-kendrick-perkins-consumer-protection-experts

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.

While other companies sell investors a stake in athletes' future professional salaries, Nilly says it is the first and currently only company to offer cash advances on college NIL dollars. Several agents, athletic department employees and others who work in the college sports industry told ESPN they were unaware of any other company that was paying college athletes in exchange for a cut of their NIL earnings.

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%.

So not only does he give horribly bad and uniformed takes on TV as an analyst... He's now part of a company that will try to exploit student athletes coming from limited means and in return for an upfront cash advance secure the ability to potentially get up to 50% of what that player can earn in NIL.

Wow, that's worse than a payday advance type of loan. It sucks knowing that some families are in dire enough circumstances that this would seem worthwhile for them.

It's not a loan.

I never said it was a loan.

[MAQ]

This is wrong when there is only one company that offers it. Soon a lot of others will get it. This is good for them because many will never make any money after college.

This isn't the only company with this type of model. First time I heard about this was with Reds phenom Ally De La Cruz. This isn't the article I read...wish I could find the original article I read because it did a great job of explaining how the investment firm does its work as opposed to chastising the player for taking the deal the way this Forbes article does.

https://www.forbes.com/sites/terencemoore/2023/07/10/elly-de-la-cruz-making-somebody-rich-and-its-not-totally-himself/

There's nothing wrong with this set up, imo. These firms will invest in many athletes. The athletes only pay money on what they earn. If they don't earn, there is no obligation to pay. Once in a blue moon,these firms hit big with a superstar like Cruz.

[dirkdiggler4177]

This is wrong when there is only one company that offers it. Soon a lot of others will get it. This is good for them because many will never make any money after college.

This isn't the only company with this type of model. First time I heard about this was with Reds phenom Ally De La Cruz. This isn't the article I read...wish I could find the original article I read because it did a great job of explaining how the investment firm does its work as opposed to chastising the player for taking the deal the way this Forbes article does.

https://www.forbes.com/sites/terencemoore/2023/07/10/elly-de-la-cruz-making-somebody-rich-and-its-not-totally-himself/

There's nothing wrong with this set up, imo. These firms will invest in many athletes. The athletes only pay money on what they earn. If they don't earn, there is no obligation to pay. Once in a blue moon,these firms hit big with a superstar like Cruz.

Agreed. The only time it becomes bad is when people are desperate, but if companies are competing to give them the best offer it solves itself out.

[xxSnEaKyPxx]

I can’t believe perk would do this

Really?

Has he done or said anything over the years that led you to believe he was a good human?

[PushDaRock]

This is just the venture capital model applied to sports licensing. They hand out a few million in tiny cash advances to high school kids, hope one of their kids becomes a 1 and done lottery pick and then get 4-5 years of exclusive rights for big sneaker and cola endorsement contracts.

And who knows maybe some of them even sign a second contract. ( )

Yes, except Angel investors can make 100x-1000x their investment if they hit on a unicorn (ie AirBnB), whereas here, their return is capped at 2.5x investment. It's a terrible business model for Perk tbh.

Presumably it's not actually capped but their %age drops after the 2.5x mark.

Why would you assume it's not capped when all the info out there literally says it is and nowhere does it indicate otherwise?

Combining the volatility of the college athlete NIL regulatory landscape with the already volatile nature of the marketability of an individual college athlete makes for an extraordinarily risky investment for Nilly. The founders claim their goal is to provide a modest, mid-teens return for its investors. A daunting task when the company is dishing out $50,000 payments to unproven high school athletes, particularly when you consider that they cap their earnings at 2.5 times the initial payment.

[Sixers in 4]

I don't really see it as a problem.

I would need more information on how much money overall they are making. At first blush it would seem to me capping payments at 2.5 times means they need to hit at least 1 out of every 2 athletes they give a loan to as well as dealing with inflation and forgoing standard interest rates for the the 3-5 year period from highschool until they go pro. My guess is the margins are nowhere near where this board thinks they are.

This could actually help young black athletes much more so than hurt him if the details in the story are true. Sometimes it's kind of sad that people only see the worst in people. The terms don't seem so bad all things considered considering all risk Nelly is absorbing and they are offering real money at a time in an athletes life they can make a real difference to them.

Going to give Perkins the benefit of the doubt here. I think there are plenty of athletes who are hundred millionaires if you asked them would they pay 125,000 now to not grow up super poor they would say unequivocally yes and there are going to be athletes who don't make it big who are going to use the money to help them. Seems like a good idea to me but what do I know

[SweaterBae]

The best definition of capitalism I've heard is that it is a system in which every party involved attempts to screw over every other party as hard and often as they can, until it stops being profitable.

[Kurtz]

The best definition of capitalism I've heard is that it is a system in which every party involved attempts to screw over every other party as hard and often as they can, until it stops being profitable.

Their model more closely resembles socialism.

[threethehardway]

The best definition of capitalism I've heard is that it is a system in which every party involved attempts to screw over every other party as hard and often as they can, until it stops being profitable.

Their model more closely resembles socialism.

Lol, no it doesn't.

Their model is venture capitalism, no different than any other private equity and venture capital firm.

This model can only exist in a country where young athletes are casually exploited despite making billions for institutions for generations upon generations under the guise of amateurism.

This model can only exist in a country where the highest paid public servants are elite college football and basketball coaches.

This model can only exist where institutions refuses to pay their athletes and instead rather rely on the money of boosters and shady firms under the guise of reform.