Circling Sharks
This article appears in the February 2026 issue of The American Prospect magazine. Read more from the issue.
If you—a future pro or college star—can wield a fearsome bat, sink a clutch three-pointer without fail, or have the hands to snag the game-winning touchdown pass, pay attention:
We are here to help you turn your future earnings into instant cash, right here and now, with no strings attached!
Just call or email today!
If the preceding sentences sound like a late-night infomercial or the distilled essence of a con, you are not cynical; you are experienced.
What we might call the athlete-finance industry is exploding against the backdrop of multimillion-dollar professional salaries and the new world of college player payments. The legacy of predatory finance—payday lending, income-share agreements, class action settlement factoring, multilevel marketing, and crisis-prone mortgages—all echo through what is on offer to today’s athletes. With many of them Black or brown, even supporters admit there is a whiff of indentured servitude about this new business.
The back end of this new industry, which recruits don’t hear much about during pitches, reeks of avarice and unbridled financialization: an ecosystem of opaque private funds shoveling money into nascent financial entities in the hope of, in the words of one speculator, “asymmetric risk-reward with downside protection and uncapped upside.” That’s Wall Street-speak for free money—for Wall Street, anyway.
Given the steady encroachment of Wall Street speculators into everything from youth sports to major league franchises over the last decade, the concurrent march of the Masters of the Universe deep into the financial lives of individual players should not shock seasoned observers of the business of athletics. But it has.
To Wall Street, athlete pay creates a more or less predictable revenue stream.
The only thing really standing between the athletes and these potential scams is the law, and cases moving through the system now threaten to expose conflicting financial interests, greedy college administrators, and racist recruiting practices. Professional athletes, especially the superstars who cash paychecks in the millions, may stand a chance of finding their way through the thicket intact. Collegiate athletes may find the going rougher.
“We have no protections in place,” said Hillary Seiler, founder of Financial Footwork, which trains student-athletes to understand what’s coming at them. “There are not any boundaries to control how this develops. It will be the wild, wild West for years to come.”
The “wild, wild West” is a metaphor that the more wary participants in this business reach for frequently. “Gold rush” is another. Other times, they cut loose with “crazy,” “insane,” or “out of control.” Or they simply sigh in disbelief at what is taking shape.
TO WALL STREET, ATHLETE PAY has nothing to do with justice: It simply creates a more or less predictable revenue stream, like a corporation with a steady income from selling a product or service. Future income morphs into a present payout. To some people, that looks like a loan, and often a usurious one at that. To others, it looks like buying an ownership share (equity) in a person, or at least in the value of their labor, and many of those people are Black or brown. The first interpretation is often illegal, or at least subject to legal protections; the second ranges from creepy to downright immoral.
“Right now, people are operating like investment bankers: Don’t break the law, have some legal basis for what you’re doing,” said Andrew Bondarowicz, a New Jersey sports lawyer and adjunct in sports law at Rutgers University. “Is it all ethical? No one cares as long as they are not breaking the law.”
At the professional level, a company called Big League Advantage (BLA) kicked off the frenzy about a decade ago, when it began paying young players large chunks of money in return for a share of future earnings, technically known as income-share agreements. Founded by Michael Schwimer, who had a brief career in Major League Baseball as a relief pitcher, BLA got off to an inauspicious start by naming itself Big League Advance, a common synonym for a loan employed by those poster boys of predation, payday lenders. “That’s how big of an idiot I am,” Schwimer once said.
But idiocy is not innumeracy. Schwimer’s strategy involves finding athletes well before their future value is determined. Sometimes the player’s career doesn’t pan out and BLA loses money; but when it hits, it hits big.
BLA raises money from its own investors—mainly rich individuals and some venture firms like hedge funds—and promises a payout down the line. It currently has about $400 million, according to documents filed with the Securities and Exchange Commission. One of BLA’s investors told HBO’s Real Sports that Schwimer promised his investors a 30 percent annual return for 20 years or so. By contrast, the S&P 500, the benchmark for most investing, historically notches returns in the mid-single digits.
In the telling of BLA, its secret sauce is not illegality or lack of ethics but simply analytics. Schwimer has assembled a team of data scientists and sports seers—including at one point Paul DePodesta, the inspiration for Jonah Hill’s geeky character in the movie Moneyball—who zero in on players with potential and cut deals before anyone else. More prosaically, BLA is simply a venture capital firm, guys with extra cash hoping that getting in early pays off spectacularly in a few cases, even if other players disappoint.
“For us as a company, it’s really a testament to our modeling capabilities and how well we’ve been able to predict success of minor leaguers,” Schwimer told the Associated Press.
This picture of savvy baseball statisticians harvesting their just rewards darkens significantly upon consideration of exactly which players BLA targets and under what circumstances. Schwimer said at one point that most players with whom it contracts are from poor countries in Latin America. (It currently has over 700 players under contract, according to its website.)
One simple question—“Is it illegal?”—hangs over the marquee income-share agreement case before the courts today.
FERNANDO TATIS JR. IS NOW a superstar shortstop with the San Diego Padres, a three-time All-Star with two Gold Gloves in six major league seasons. Schwimer signed Tatis to an income-share agreement back in 2017, when he was 18, still lived in his native Dominican Republic, was barely a minor league player, and was still learning English. “When we did a deal with Fernando Tatis Jr., he wasn’t a top 50 prospect on anybody’s list,” Schwimer told AP.
The contract was pitched over a dinner, where Schwimer and other BLA officials described the arrangement as an “investment,” according to a lawsuit Tatis has filed in California to void it. Days later, Tatis agreed to the deal without seeing the contract in advance. An attorney chosen by BLA explained the contract terms in a two-minute phone conversation. Tatis’s agent was not involved in the deal. “The swift timeline, orchestrated by BLA, exploited his youth, inexperience, and relative lack of financial sophistication, all contributing to [Tatis’s] inability to understand the agreement’s true nature,” according to the lawsuit.
In exchange for $2 million up front, Tatis agreed to forward 10 percent of his after-tax big-league earnings to BLA.
After the advance contract signing, Tatis emerged as an MLB giant, a fearsome hitter whose size (6 feet, 3 inches, 217 pounds) yields home-run power without inhibiting his base-stealing prowess (he had 32 last year). His nickname: El Niño, after the mighty Pacific weather pattern.
In 2021, Tatis signed a 14-year, $340 million contract with the Padres, a huge investment in a player whose major league debut was just two years prior. At the time, it was the third-largest contract in baseball by dollar value, behind only Mike Trout and Mookie Betts, and the largest contract in Padres history. And BLA immediately staked their claim to 10 percent of it. That’s $34 million on an initial $2 million investment, a massive 1,700 percent return.
“Defendants have built a business model that preys on young, financially unsophisticated athletes, offering lump-sum advances in exchange for significant portions of their future earnings,” states the lawsuit, which was filed last June.
Robert Hertzberg, a member of the Tatis legal team and a former Speaker in the California Assembly who helped write many consumer protection laws, argued that the lawsuit has less to do with money, which the star player will have plenty of whatever the outcome, than it does the chance to protect other younger players from falling into the same trap. “I want Tatis to win but I also want to put a stop to these kinds of contracts,” Hertzberg said. “He’s not looking for money, he’s looking for public injunctive relief that stops this kind of abuse.”
The Tatis lawsuit stands or falls on the question of whether the $2 million payment is a loan under California law. If it is, then any loan made by an unlicensed lender like BLA is invalid. The Golden State, more adept than most at bobbing and weaving as predatory lenders shift tactics, has been very clear on this point. Its consumer protection authorities treat advances paid back through future wages or earnings as loans, according to the Tatis lawsuit. The California legislature even codified this point into law in February 2025, four months before Tatis filed.
David Seligman, executive director of Towards Justice, which has litigated against income-share agreements, argues that the loan-based framework has served consumer protection well. “People are marginalized in all sorts of ways, and the wealth that they might have seems so distant that they can be exploited into selling that money away,” said Seligman, who is running for Colorado attorney general. “We have to think of these things as loans because, at least, rules on predatory financial products would apply.”
BLA’s legal response to the Tatis case has been to follow the lead of financial companies nationwide and push the case into arbitration, which the Tatis contract does indeed allow. In September, an arbitrator ordered Tatis to make payments to BLA, ruling that the contract did not violate California law. But the legal case, filed in state court, is still alive and pending.
Professional sports agents have lined up, in the main, against income-share agreements, with the king of the profession, super-agent Scott Boras, calling them “usurious” and exploitative of players outside the United States. Even experts who might approve of the BLA model in principle cringe at the thought of a Black or Latino player from a Spanish-speaking country negotiating such a contract under such conditions.
“On its face, exchanging present value for future value doesn’t have to be a problem,” said Marc Edelman, a law professor at the City University of New York and director of sports ethics at its Robert Zicklin Center for Corporate Integrity. “But what is a problem is the relationships being struck up with young baseball players, especially in the Dominican Republic.”
A separate lawsuit brought by Francisco Mejía, a Dominican catcher who first played in the majors for the Cleveland Indians, alleged that BLA approached him when his mother was sick and the family needed funds for her medical treatment. Mejía later dropped the case and issued an apologetic statement for bringing it in the first place. BLA did not respond to a request for comment about any of the cases against it.
Over time, BLA could end up a chapter in the story of professional baseball’s endless exploitation of players from the Dominican Republic. This story often features buscones, scouts whose name derives from the Spanish verb buscar (to search), a word from old pirate tales that evokes thievery. These scouts are notorious for shortcuts in training players to impress Major League representatives, including through drug use, and then pocketing a percentage of the signing bonus.
These racial dynamics shadow the intersection of sports and money in much the same way that skin color serves to underscore the too-often predatory nature of finance in the United States, and its history of targeting Black and brown Americans.
INCOME-SHARE AGREEMENTS have their roots in the musings of no less than Milton Friedman, the godfather of today’s markets-über-alles economists. In a 1955 essay, Friedman lamented the inevitable “irrational public condemnation” of such contracts, due to their similarities with less-savory arrangements like debt peonage, indentured servitude, and the enslavement of Black Americans.
Nonetheless, Friedman’s godlike status among economists drove the idea from footnote into a paper published by the right-wing American Enterprise Institute in 2014. Around that time, a few startups began offering what they called “human capital contracts”—MyRichUncle.com was one goofy name—but quickly faded. A Republican riff on the AEI study was to propose federal legislation to pre-empt state laws of the sort Tatis is relying on to break his contract with BLA, ones that govern interest rates or assignments of future income. That effort went nowhere.
Frustrating though it may be to Friedman acolytes, the neoclassical economist’s approach of treating the labor of flesh-and-blood human beings no differently than other commodities—ripe for exchange if the price is right—does conflict with lived experience. Nowhere is this truism more vivid right now than in collegiate sports, which is nearly five years into its historic pivot to pay the athletes who generate billions in revenue.
In 2021, a landmark antitrust case, NCAA v. Alston, paved the way for athletes receiving income through name, image, and likeness (NIL) deals. Later, schools agreed to directly pay players, but with caps on the total value. And a class action settlement in House v. NCAA in mid-2025 allocated $2.8 billion for back pay to former NCAA athletes over ten years.
Financiers got involved in the aftermath of those cases as well.
BLA has dipped its toe into the college game, again advancing up-front cash with the promise of future earnings. Gervon Dexter, a former defensive lineman for the University of Florida, landed a contract with the Chicago Bears for up to $6.72 million after signing a BLA advance agreement for about $430,000 up front. The advance contract entitled BLA to 15 percent of Dexter’s future earnings. His lawsuit claims the contract violated Florida’s state law on student NIL rights and attracted support in a state that is typically wide-open for payday lenders. “I consider that a predatory loan,” Chip LaMarca, a Republican member of Florida’s House of Representatives, later told The Washington Post. “It would have violated our legislation when he left the university.”
Other companies, flush with cash from their own sources, are using BLA as their inspiration, said Courtney Altemus, founder of Advance, a firm that is trying to carve out a white-knight role as an unbiased advocate for student-athletes.
“They are mirroring Big League Advance and coming in and saying, ‘Let’s share revenue,’” Altemus, a Wall Street veteran, said. “You’re getting a massive offer of money at a time of an undeveloped brain, and they are often with families that are poor or living paycheck to paycheck or paycheck to credit card. They’re thinking, ‘I’m getting $50,000 up front, and then money from school, and I don’t have to pay it back.’”
No company has made a bigger splash in this respect than Nilly, a firm founded by former NBA star Kendrick Perkins and a Wall Street veteran named Chris Ricciardi. Nilly provides athletes with cash in exchange for a share of the NIL earnings they receive from colleges. The company has said it fronts amounts as high as $200,000 on contracts of up to four years.
Perkins, a hulking former NBA champion with the Boston Celtics, has a bushy beard and an endearingly blunt mien in defending the company against charges it exploits athletes. After a critical article on ESPN.com, Perkins, an ESPN contributor himself, took to a podcast to make the case for his new venture. Near the end of the podcast, he said, “I’m not talking about this shit no more.” (Unsurprisingly, Nilly did not respond to requests for comment.)
On the podcast D-Rich TV, Perkins emphasized that if a player gets cut, injured, or otherwise loses access to income, Nilly has no recourse. “They don’t have to pay it back,” he said on the podcast. “If a player doesn’t pan out or gets injured, Nilly does not get paid.” Without knowing the precise terms, it is impossible to calculate the return as if it were a loan; Ricciardi has referenced returns in the “mid-teens.”
Ricciardi turbocharged Nilly’s war chest with a $200 million investment from a private credit firm named Harlan Capital, which touts the appeal of free money. “Nilly represents a new chapter in a book that we’ve been writing for a long time: How can we find creative ways to monetize intellectual property, especially in emerging areas,” Harlan said.
Professionals who offer financial education report constant overtures from firms offering income-share agreements to steer student-athletes their way. In the parlance of Wall Street, these companies want to raise their deal flow: to cycle as many young players as they can through their process.
Ricciardi’s track record shows a talent for deal flow, but less regard for the ethical overtones of his work. Before the 2008 financial crisis, Ricciardi helped structure mortgage-backed collateralized debt obligations (CDOs) at Merrill Lynch, a business line that led it straight into the arms of Bank of America to avoid bankruptcy. He later became a CDO manager, an ostensibly independent role that the movie The Big Short portrayed as an exorbitantly paid cutout designed to insulate big banks from charges of self-dealing.
In the intervening years, Ricciardi co-founded to a company, Edly, that offers income-share agreements for nursing students, among other professions. Various companies in this space have generated a snarl of litigation nationwide as state attorneys general and the federal Consumer Financial Protection Bureau alleged the contracts are effectively loans and that borrowers enjoy significant protections.
In 2023, Ricciardi pitched the Department of Education’s ombudsman for federal aid, Bonnie Latreille, on the idea of delaying Pell grants to students so that Edly could swoop in with an income-share agreement that looked an awful lot like a usurious payday loan. “He clearly had no idea who we were,” said Latreille, now a senior fellow at Princeton University’s Debt Collection Lab. “He wanted to get low-income grant recipients in debt sooner.” When Latreille and her colleague peppered him with questions about consumer protections, safeguards on lending discrimination, and other details, Ricciardi ended the meeting.
TO BE FAIR TO OUTFITS like Nilly, their business opportunity stems at least in part from a real problem in collegiate sports: the continuing lack of bargaining power that student-athletes face. Perkins argues that Nilly can help players when universities go back on their promises, like in 2024, when the starting quarterback at the University of Nevada, Las Vegas, Matthew Sluka, walked away from the team over a missed $100,000 NIL payment. “We can’t go after the student-athlete and we won’t go after the student-athlete,” Perkins insisted.
The former student-athletes who are due $2.8 billion may be another matter. That settlement took effect in July 2025, and now their putative new best friends are settlement factoring companies, which offer pennies on the dollar against future payouts from class action cases. Some of them even mix in elements of multi-level marketing schemes, in which athletes make money for reeling in their peers. “Then they say to their friends, ‘Hey come with us,’” Altemus said. “And then they get a text from a friend saying, ‘Hey you can get money,’ and the friend is compensated.”
Income-share agreements have their roots in the musings of Milton Friedman, the godfather of today’s markets-über-alles economists.
The aggressive marketing to former athletes prompted plaintiff lawyers to ask the judge overseeing the House settlement to issue a warning that these companies were “misleading” the former athletes. One attorney who reviewed a contract for such a payment advised against it unless the athlete is desperate for the money.
In truth, collegiate athlete-finance agreements are a function of the new market that the NCAA settlements has created. While an improvement on the past where players weren’t paid at all, the markets don’t have the same contours as in professional sports, where norms and rules protect players, above all via their union, something that does not exist at the collegiate level. Professional unions certify agents, negotiate basic contracts, and give players a port of call if there are problems.
“Anytime you crack a cartel you create freer markets, but in the interim stage there’s no denying that less reputable people come in,” Edelman said. “We’ve replaced one exploitative group with another.” And, then as now, the exploitation has a racial skew to it, something athlete advocates begged me to highlight.
Ramogi Huma, executive director of the College Athletes Players Association, does not mince words. Before the House settlement and after, the NCAA “creates a transfer of wealth from predominantly Black basketball players to predominantly White coaches and athletic administrators.”
The same could be said about the entry of Wall Street, whose money skews white, into professional sports, said Luke Fedlam, a partner in sports law at Amundsen Davis. Their playbook is all too clearly a recapitulation of predatory financing schemes that have long looked to Black and brown communities as their targets.
“I have talked to so many families, Black and brown, who have people around them trying to exploit or leverage their sons and daughters for their own benefit,” Fedlam said. “I hope we highlight this issue more and more.”
We’d better. On the frontiers of this new industry stand companies that are ready to slice and dice talent into retail-sized chunks for purchase by anyone with a few bucks and zeal for speculation. Ready to trade athletes on equity markets that are sweaty versions of the NASDAQ or NYSE? Startups like Finlete—“financial athlete,” get it?—have you covered. All that’s left is for online broker Robinhood to partner with them, and the circle of financialization will close as we trade pieces of human game-players via its gamified app on our smartphones, all while munching peanuts and Cracker Jack at the old ball game.
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