The Big Lead

Kendrick Perkins' NIL company accused of 'preying upon' young athletes

By Joe Lago

June 8, 2018; Cleveland, OH, USA; Cleveland Cavaliers center Kendrick Perkins (21) during the second quarter in game four of the 2018 NBA Finals against the Golden State Warriors at Quicken Loans Arena. The Warriors defeated the Cavaliers 108-85 to complete a four-game sweep. Mandatory Credit: Kyle Terada-Imagn Images
June 8, 2018; Cleveland, OH, USA; Cleveland Cavaliers center Kendrick Perkins (21) during the second quarter in game four of the 2018 NBA Finals against the Golden State Warriors at Quicken Loans Arena. The Warriors defeated the Cavaliers 108-85 to complete a four-game sweep. Mandatory Credit: Kyle Terada-Imagn Images / Kyle Terada-Imagn Images
facebooktwitter

An ESPN report has placed an ESPN analyst and his company under public scrutiny for its business practices.

On Thursday, a story by ESPN's Dan Murphy put a spotlight on a company co-founded by NBA analyst Kendrick Perkins called Nilly, which offers college athletes money in exchange for a portion of their name, image and likeness deals.

RELATED: Seth Davis to launch new web site for 'elite' college basketball coverage

Perkins and co-founder Chris Ricciardi said Nilly provides payments that range from $25,000 to hundreds of thousands and, in return, gets exclusive rights to monetize athletes' NIL opportunities up to seven years. Between 10% and 50% of NIL earnings go to the company and its investors.

Murphy talked to consumer finance experts who, after reviewing the Nilly contract, decried it as a high-interest loan that offers quick cash relief at too steep of a long-term 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. of Scout, a company that 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."

Chris Peterson, a Utah law professor, likened several parts of Nilly's contract to "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.

Perkins, a 14-year NBA veteran and NBA champion, said Nilly was created to help alleviate the pressure of athletes' financial situations.

"You have so many athletes and their parents who are struggling day-to-day," he said. "Because we're actually taking a bit of a gamble on what the student-athlete is going to make in the NIL space, the benefit is the kid — the student-athlete — is able to get financial security so they don't have to rush."

MORE TOP STORIES From the Big Lead

MLB/SPORTS MEDIA: May the Costas-Darling memes never end

NFL: Potential landing spots for Davante Adams

NBA: Bronny haters missing the mark

MLB/SPORTS MEDIA: Division Series ratings bonanza