As first appeared in NewsBreak
By Aron Solomon
The rules that allowed college athletes to monetize their name, image, and likeness were never going to be enough for some people. The NIL rules would always be pushed, extended, and reimagined – they were just stage one of a much more complicated scenario involving ways for athletes to get net new money.
When this made it into my Twitter feed this week, it was no surprise at all:
Photo by Sure Sports Twitter feed
This is essentially payday lending for athletes before they have a payday guaranteed.
New Jersey lawyer, Rich DiTomaso, points out the dangers of these types of programs:
“It’s a slippery slope. If today’s thing is offering a college graduate a $50,000 ‘NFL pre-draft training’ loan, will tomorrow’s be offering a promising college athlete a high-interest loan for a car or vacation? It doesn’t sound like this ends well for the athlete.”
Taking advantage of wealthy young athletes is by no means a new thing, but new programs can make the game more creative. For those who feel that the “payday lending” analogy might have been a bit much, this is from the Sure Sports website:
Sure Sports offers financing based on the current or future earnings of a player’s contract. Each repayment schedule is customized to match the player’s complex needs, and funds are often available within 2 business days.
Literally, the last thing that athletes should be doing is this.
In a very interesting interview this week, in which NFL legend Shannon Sharpe interviewed fellow legend Chad Ochocinco, the latter spoke about his lifestyle as an NFL star. Much to Sharpe’s surprise, Ochocinco claims to have saved close to 90% of his NFL earnings by maintaining a modest lifestyle. He didn’t buy expensive cars and even claimed that instead of the “bling” bought and worn by many professional athletes, he bought fake jewelry in the mall.
Even if these claims are partially true, the idea behind them should resonate for athletes considering any incarnation of these payday loan programs:
Don’t do it.
It’s one thing for a student in need who is about to become a top NFL draft pick to take a small loan to prepare for the NFL combine. But while these are the stories these companies will always lead with, there’s no way that the darker side of these loans isn’t.
Enter Evander Kane. One of the most talented NHL players of the generation, Kane is currently in bankruptcy proceedings. The bankruptcy trustee has sought to pursue Sure Sports for having made, as The Athletic reported last February and November, “a vicious cycle of loan after loan after loan.”
Kane, who listed under $10 million in assets and over $30 million in liabilities in his bankruptcy filing, allegedly had $8 million in loans arranged by Sure Sports and listed a liability owed directly to Sure of $1.8 million.
Not every loan a payday-style lander makes to an athlete will end as Evander Kane’s have, yet this should bit probably won’t be a cautionary tale for other athletes.
Sure Sports is not alone in this business because it’s too lucrative a space. Even former high-profile athletes have entered the payday loans for athletes game because that blurred line between helping and exploiting athletes is just too tempting.
The big and scary evolution of this business is exactly what Sure Sports tweeted about this week. If loans to college athletes are now a reality, what’s next?
With high school athletes now able to monetize their name, image, and likeness, the slippery slope is bound to become a more treacherous one for athletes unprepared for these new realities.
About Aron Solomon
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the chief legal analyst for Esquire Digital. He has taught entrepreneurship at McGill University and the University of Pennsylvania and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Forbes, CBS News, Crunchbase, Variety, CNBC, USA Today, ESPN, TechCrunch, The Hill, BuzzFeed, Fortune, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal, Law.com, The Boston Globe, NewsBreak, and many other leading publications.
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Strategy Officer for AMPLIFY. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Newsweek, The Hill, Fast Company, Fortune, Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, BuzzFeed, Venture Beat, The Independent, Fortune China, Abogados, Today’s Esquire, Yahoo!, ABA Journal, Law.com, The Boston Globe, and many other leading publications across the globe.
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