Florida lawmaker says Bears DT Gervon Dexter’s NIL deal violates the law

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Florida lawmaker says Bears DT Gervon Dexter’s NIL deal violates the law

Mark SchlabachESPN Senior WriterSeptember 5, 2023, 6:38 PM ET6 minutes of reading

The NIL contract Chicago Bears rookie Jervon Dexter signed with a venture capital firm while playing at the University of Florida in 2022 violated the state’s NIL law in effect at the time, the Florida state legislator who sponsored the bill said , told ESPN on Tuesday.

Dexter, a second-round draft pick, agreed to pay the Big League Advance Fund (BLA) 15 percent of his pretax NFL earnings for the next 25 years in exchange for a one-time payment of $436,485 in 2022, according to a copy of a federal lawsuit filed in U.S. District Court in Gainesville, Fla., on Friday.

According to published reports, Dexter signed a four-year, $6.72 million contract with the Bears on June 16, meaning he will owe BLA about $1 million over the life of the deal.

Florida Rep. Chip LaMarca, who proposed the original legislation in 2020 that would have allowed Florida college students to profit from their name, image and likeness, described Dexter’s deal as a “predatory loan.”

“The deals were supposed to be that an athlete could participate in the open market and when he’s done, whether he continues to play professionally or not, all future contracts are void,” LaMarca said. “In other words, we didn’t want anyone to have access to anyone’s future without proper leadership and proper representation.”

Florida’s original NIL law, Senate Bill 646, included the following provision: “The duration of an intercollegiate athlete’s representation contract or compensation for the use of an intercollegiate athlete’s name, likeness, or likeness may not exceed her or his participation in an athletic program in graduate school.”

“We obviously wanted to expose college athletes to the same free market that other students had, but at the same time we wanted to offer some protection,” LaMarca said. “We wanted to make sure they weren’t taken advantage of, and that’s exactly what we expected to be able to protect, but we also didn’t want to see that happen.”

“It appears that what happened to him was really nothing more than a predatory loan from a Delaware foreign state LLC. No agent involved, no compliance, no contract review and all that. So it’s pretty scary to think that this could happen. He did all the right things. He succeeded. He’s in the NFL and it’s hanging over his head.”

In February, Florida state lawmakers rolled back many of the safeguards in the updated NIL bill, including the clause that prohibits NIL deals from extending into a student-athlete’s professional career.

Dexter’s attorneys declined to comment. Michael Schwimmer, CEO and founder of the BLA, did not immediately respond to a request for comment from ESPN.

Dexter’s attorneys are asking a federal judge to void his agreement with the BLA because it does not comply with Florida’s NIL law and the state’s sportsmen’s agent statute. Specifically, his attorneys argued that the agreement did not include specific language required under the agent statute, the company did not notify Florida athletics director Scott Stricklin of the deal and BLA and its agents were not licensed in Florida.

According to the lawsuit, Scott McBrien, an authorized BLA agent, sent a message to Dexter in May 2022 that read, “What’s up Jerven! I am a partner at a data and analytics firm here in Washington, DC. We have a 6 figure financial/NO opportunity for you. I would like to discuss more if you are interested. Tell me what you think.”

The lawsuit alleges that BLA provided Dexter with an agreement on May 16, 2022. He signed the deal the next morning. Under the terms of the settlement, a copy of which was obtained by ESPN, BLA agreed to make Dexter a one-time payment of $436,485 and a $5,000 donation to the charity of his choice.

There were two terms included in the agreement: an initial term that ended when Dexter’s collegiate eligibility expired and an extended term that began when he left college.

In exchange for the payment, Dexter granted BLA a “perpetual, irrevocable, royalty-free, worldwide license for the duration of the Initial Term to use the Player’s name, image, likeness, comments, biographical information and/or sporting reputation for advertising or publication to BLA, including in social media posts, interviews, online content, press releases and any other media.”

Dexter was required to make at least one social media post promoting BLA and its products, autograph up to 100 items for BLA, make at least two personal appearances and provide BLA with at least one VIP invitation to the NFL Draft and events , related to the draft that he hosted.

Section 5.1.a of the BLA Agreement states what Dexter will financially owe to the BLA during the extended term of the deal: “’Professional Football Earnings’ means all of the Player’s pre-tax earnings or remuneration paid to a Player by a Professional Football League or team during the Extended Term of this Agreement. Such earnings include, without limitation, any wages, salary (including payments to the player’s team), bonuses (including deferred bonuses), payments made to the player by reason of the player’s participation in any playoff game, all-star game or otherwise championship event and other compensation earned by the Player in his services to the Professional Football League or team of any kind related to or for the Player participating in football activities and participation in events during the Extended Term of this Agreement. “

In a questionnaire that was part of the agreement, Dexter initialed a section asking if he agreed to give the BLA 15% of his “future pro football earnings.”

“As an example, of the potential amounts you may be required to pay to Big League Advance under this Agreement, if you make $100 [million] in pro football earnings for 25 years from the date you sign this Agreement, you will have to pay us $15 [million] while earning that money,” the questionnaire said.

Pursuant to the terms of the transaction, all disputes shall be resolved by binding arbitration.

Corey Staniscia, a policy consultant who helped draft Florida’s original NIL law, said he is not aware of any other NIL groups or collectives with contracts similar to the one Dexter signed with BLA.

“I haven’t heard of a collective doing this, but I had heard of brands wanting to do this, some other people wanting to do these things, like an agent, and we just didn’t want an athlete to sell their own in the future between 18 and 22 years old when universities don’t provide professional services for these athletes and many of them can’t afford it,” said Stanisha, who works with the NIL team at the University of South Florida. “Who’s going to review these contracts like that? It was a really bad contract.”

Another Florida-based attorney, who has negotiated dozens of NIL deals over the past few years, told ESPN: “Outside of this BLA, I haven’t seen anyone try to reach out and take what you would call player brand income going forward . No, I haven’t seen it.”

According to the BLA website, he has worked with dozens of Major League Baseball players, including Reds shortstop Eli De La Cruz, Marlins outfielder Jazz Chisholm, Nationals catcher Kebert Ruiz and Twins pitcher Bailey Ober.

His roster of players includes former Georgia linebacker Nolan Smith, the Eagles’ first-round pick; former North Carolina linebacker Myles Murphy, a Bengals first-round pick; and USC linebacker Corey Foreman.

U.S. Senators Tommy Tuberville of Alabama and Joe Manchin of West Virginia have introduced federal legislation requiring agents to register with the Federal Trade Commission. NCAA President Charlie Baker also said he wants the NCAA to find a way to certify agents through federal laws or on its own.

“The parameters are not very well written,” Tuberville told ESPN on Tuesday. “Laws don’t exist, so there will be some taking advantage of others. Obviously this will happen. It happens in every business. Education will have to be a big part of that.

“The NCAA is going to have to step in because they’re the ones who have been doing it for years, saying you can talk to an agent, but they have to be certified, it has to be at a certain time, parents have to be involved.”

ESPN’s Dan Murphy contributed to this report.

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