“The deal that Gerv signed with BLA stated that BLA would be entitled to 15% of his pre-tax NFL earnings over the next 25 years, in exchange for a one-time payment of $436,485 in 2022.” But, there may be an out for him: “The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution.” Florida football: Gervon Dexter’s NIL issues a warning to all athletes
This will expose NIL as the pay-for-play system that it really is. If DG loses in court, other athletes won't want to agree to similar terms. That will force companies to question how they will get any ROI from a college student with little income. Because, let's face it, no one is buying any of their products based on "student-athlete" endorsements. If DG wins in court, companies will have the exact same question.
What really gets me is the 25 years part and the fact it is pre-tax. They really expect him to play that long? Does it account for any pension or dissability benefits paid by the NFL over those 25 years? As far as being pre-tax he’s gonna be owing Uncle Sam on money someone else will see. And we still have no idea what his agent will get. We can’t presume to know or judge what Dexter’s financial situation was when he signed this, but this deal is bad enough to where he may end up seeing just 30-35% of his contract after taxes, agent fees, and paying back this NIL nonsense. Hope he has a long and productive career.
This is a real business model. Tony Finau from pga tour is in litigation with couple of investors. They invested in him in exchange for future earnings. Don’t know the details, but what a gamble.
I know enough about his financial situation to know that he was on scholarship with room and board covered and receiving an education. Work a couple years and be a millionaire. Or sign away 20% of your earnings (if you include tax) for your entire career for the price of an average middle class home. He's a college student he can do that math. Guy was an adult, hopefully he doesn't get protected from himself. This is the only way nil makes sense so those who want it should be hoping the same. I live in Knoxville and saw a commercial featuring UTs quarterback for the local mattress store. Guy looked like he was being held hostage until he read the cue cards. Nobody, except maybe his mom, is going to go buy one.
If he only makes it through his first contract, both parties may have a decent deal. You get half $1 million early in your life and you have to pay a little bit more back. You don’t lend money in order to lose money. It’s a risk on both sides and a deal is a deal in my book. To me, Dexter is not holding up on his handshake.
The players that fail don’t pay it back. For the guys loaning the money, this is bs. If it doesn’t hold up, there goes this avenue for nil.
Obviously not a well thought out decision but also we don't have any real qidea what financial pressures Dexter and his family were facing.
The guys loaning the money and know the risk. They probably aren’t illiterate. By law of averages, the money they make off Dexter also has to cover the Morbitto of players who will never give them any return. Take away the rare player tgat becomes profitable and all players lose that deal.
Looks bad in retrospect but what were the guarantees that the folks lending the money that they would ever see a dime.
I doubt these guys are handing out NIL deals willy nilly. Dexter was a pretty sure bet to be drafted.
There are no sure bets, and until things get better sorted out there are few if any good ways for the people fronting the money to hedge. The terms strike me as onerous, something just south of 10% being more tolerable.
But you all are forgetting about the uglier side of NIL. For most players, it's a way for Boosters to funnel money to players so they will sign with a particular school or more importantly won't transfer. Those folks aren't expecting to get their money back, they are just doing what SMU was doing in the 80's but it's legal now. I'm also sure that there are agents and financial companies like this one that are trying to take advantage of young naive players on their future earnings. Those companies have no loyalty to any school, just who they think is the safest bet NFL wise.
