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An NIL company co-founded by former NBA player Kendrick Perkins in February faces scrutiny after an ESPN investigative report found the company used predatory tactics akin to offering high-interest loans. The company, Nilly, offers athletes upfront payments in return for the use of, or sale of, an athlete's name, image and likeness (NIL) for up to seven years. As part of the arrangement, Nilly and its backers foot advances to its athletes and in return receive a cut of future NIL earnings from the player. 

Agreements can vary both in terms of what athletes are offered up front and for how long Nilly gets exclusive NIL rights. They are offered as guaranteed money but give Nilly and its investors huge cuts of money -- up to 50% -- earned by their clients. From ESPN:

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.

Nilly has contracts with 20 athletes -- all football and men's basketball players -- who are either in college or high school, per ESPN. One such contract obtained by ESPN detailed that a $50,000 payment to a high school senior was made in exchange for exclusive rights to sell the player's NIL for seven years. Nilly and its investors -- backed by a strategic partnership with Harlan Capital -- receives 25% of the player's NIL earnings for the length of the contract or until Nilly earns $125,000. Part of the deal stipulates routine upkeep, and occasional use, of the player's social media, as well as autograph sessions and appearances. 

Perkins, a 15-year NBA veteran and current ESPN basketball analyst, co-founded the company and serves as a brand ambassador. Upon launching the company, Perkins said "Today's student-athletes have the earning ability, but in many cases don't have a clear path to capitalize on it. NILLY gives them access to the structure, opportunity and education that can set them on a course to reap financial success as they progress in their athletic lives. As true partners in their success, NILLY will open the doors to the opportunities I wish I had in my time."

In a statement to ESPN, Perkins defended the company and emphasized the value Nilly and his partners bring by offering guaranteed money.

"You have so many athletes and their parents who are struggling day-to-day," Perkins told ESPN. "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."

However, some consumer protection and finance experts worry that the structure and length of agreements with Nilly could be aimed specifically at preying on younger athletes and taking advantage of their situations. Seven years of licensing NIL rights is unusually long, for instance, and offering money upfront is a unique structure at the college level seen previously only at the professional level.

"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," Michael Haddix Jr., the CEO of Scout, which provides financial education seminars to college athletic departments, told ESPN. "It feels predatory, and it's capitalizing on young people who need money and haven't thought through the long-term implications."

Moreover, Nilly is not obligated to help its athletes fulfill any endorsement deals; instead, that job is outsourced to the athletes themselves or to their agents, the latter of which Nilly is theoretically aiming to replace. Agents, though, typically receive only a single-digit fraction of their clients' negotiated earnings -- a stark contrast to the 25%-50% Nilly stands to earn from its clients.

 "We're not an agent exactly," Ricciardi told ESPN, "but we are a financial partner with them."