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, assuming that the $125k limit is hit at the exact same time as the 7 year limit, that’s a ($125000-$50000)/($50000)^(1/7) = 5.9% APR loan that cannot actually put the athlete into debt. That seems completely fine? I’d honestly be surprised if they’re actually able to make money off this. Like, the guy has to sign $200k in NIL deals just for Nilly to break even. They’d need at least a 40% hit rate to break even on the deals themselves, before considering the fact that it takes money to run a business.
So, assuming that the $125k limit is hit at the exact same time as the 7 year limit, that’s a ($125000-$50000)/($50000)^(1/7) = 5.9% APR loan that cannot actually put the athlete into debt. That seems completely fine? I’d honestly be surprised if they’re actually able to make money off this. Like, the guy has to sign $200k in NIL deals just for Nilly to break even. They’d need at least a 40% hit rate to break even on the deals themselves, before considering the fact that it takes money to run a business.