What is Kendrick Perkins accused of? Predatory loan practice allegations against Nilly examined
Four weeks ago, Kendrick Perkins announced on Instagram that he is “the co-owner/ambassador” of Nilly. Per the company's press release, the platform is offered “to enable, empower, and enrich student-athletes in the Name, Image and Likeness (NIL) era.”
According to the statement, Perkins’ project has partnered with Harlan Capital Partners to earmark $200 million to “unlock the earning potential” of student-athletes.
The company Perkins co-founded with Chris Ricciardi, former CEO of Cohen and Co., has come under scrutiny. Per ESPN's Dan Murphy, Nilly pays student-athletes in varying amounts to own the rights to sell their NILs. In exchange, Nilly is compensated between 10% to 50% of the student athletes' NIL earnings for up to seven years.
Murphy wrote how that practice raised some eyebrows. He claimed that the network got hold of a "copy" of one of those deals and had it reviewed by investment experts.
Dan Murphy reported that Chris Peterson, a former adviser to the federal government's Consumer Financial Protection Bureau, found issues with Nilly's contract:
"Several parts of Nilly's contract reminded him (Peterson) of other financial products that are labeled as investment opportunities but function as loans,” Murphy wrote.
Peterson, now a Utah law professor, was quoted as saying:
"These are trashy products designed to take advantage of young kids."
Kendrick Perkins’ Nilly co-founder pushes back against predatory loan practice allegations
Chris Ricciardi, Kendrick Perkins’ co-founder, disputed the predatory loan practice allegations from Chris Peterson. Dan Murphy reported that Ricciardi said, "Nilly's deals are not loans but licensing agreements." He pointed to similarities between their contracts and advances in the music business:
"There's no interest rate. There's no requirement to pay back," Ricciardi said. "It's purely a licensing deal. I would be surprised if those people thought that music advances were high-interest loans."
Kendrick Perkins has been vocal in promoting Nilly on Instagram. As a well-known former athlete frequently seen on ESPN, he will be visible to student-athletes. The company reportedly signed 20 contracts and handed out money upfront for exclusive NIL rights.
It remains to be seen if more will try the offer following the allegations against the company of the former Boston Celtics star.