Georgia QB’s Fraud Lawsuit Poised to Shake Up NIL Collectives

University of Georgia quarterback Jaden Rashada sued University of Florida head football coach Billy Napier and wealthy UF booster Hugh Hathcock Tuesday in a Florida federal court, arguing they fraudulently induced him to forfeit a $9.5 NIL deal to attend the University of Miami by tricking him into believing he’d be paid $13.85 million to attend UF.

The case could set important precedent for the unregulated world of NIL collectives, which involve boosters agreeing to pay recruits for their commitment to attend a college. Although NIL collectives’ payments are described as exchanges for the commercial use of athletes’ names, images and likenesses, many deals appear to have minimally substantive connections to NIL or athletes’ right of publicity. They are more akin to signing bonuses or employment contracts in the workplace—or, in college sports parlance, pay-to-play.

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Rashada v. Hathcock et al. attempts to hold those connected to an NIL collective liable for allegedly engaging in a bait-and-switch.

Rashada is represented by longtime sports litigator Rusty Hardin, who has advocated on behalf of Roger Clemens, Deshaun Watson and other high-profile athletes. Rashada’s complaint also names Marcus Castro-Walker, UF’s director of player engagement and NIL, and Velocity Automotive Solutions, a business owned by Hathcock, as defendants.

A five-star QB and 2022 graduate of Pittsburg (Calif.) High School with a 4.0 GPA, Rashada was recruited by LSU, Oregon, Texas A&M and other elite college football programs. As Rashada tells it in his complaint—which is not a neutral retelling of facts, and its assertions could be disproven—Hathcock and Gator Collective CEO Edward Rojas aggressively pursued Rashada with promises of wealth. The complaint quotes Rojas as saying they “look forward to setting him up for life” and that brokerage accounts would be needed for all the money Rashada would be paid.

Rashada says the final offer was a four-year deal for $13.85 million, which was 42% more than the Miami deal. The complaint indicates there were two sources of funding. Hathcock, through Velocity Automotive, would pay $5.35 million, with a $500,000 signing bonus. The rest would be paid by Gator Guard, which the complaint describes as “Hancock’s NIL collective.”

To support its allegations, Rashada’s complaint quotes purported text messages. Those messages include Castro-Walker texting Rashada’s NIL agents that “We need to lock down Jaden!” and “[UF would] want [Rashada] to flip this week.”

Other texts include those from an attorney for Gator Collective, with the attorney saying, “I might go to sleep if I had $500K headed my way in two weeks . . . But we need a commitment to get there!!!”

Rashada says after committing to UF, the promises of payment never materialized. A Dec. 5, 2022, due date for the $500,000 signing bonus came and went. Rashada then received a letter from Gator Collective terminating the $13.85 million NIL contract. Rashada withdrew his national letter of intent to play for UF on Jan. 18, 2023, and later enrolled at Arizona State University for his freshman season. Last month Rashada joined Georgia through the transfer portal. His complaint says neither ASU nor UGA made any promises or offers connected to NIL. Rashada “had learned his lesson” to not trust NIL deals.

Rashada brings seven claims, including fraudulent misrepresentation and fraudulent inducement, aiding and abetting fraud, conspiracy, negligent misrepresentation and tortious interference. The gist of these claims is Rashada asserting 1. the defendants knew they were falsely promising him money; 2. they conspired to get him to drop rival Miami for UF; and 3. they lacked the intent and capacity to actually pay him. Rashada seeks damages reflecting his lost Miami deal, plus lost opportunities to pursue other NIL deals. Rashada also demands unspecified punitive damages intended to deter and prevent “similar conduct” from happening in the future.

In the coming weeks, the defendants will answer the complaint and deny wrongdoing. Among possible defenses, the defendants might argue there was no formal or enforceable deal in place, or that Rashada engaged in conduct not compliant with the contract, therefore breaching terms of the contract. To counter Rashada’s allegation they possessed malicious intent, the defendants might say they were simply unable to make the money work. The defendants will likely also emphasize that Rashada had agent representation in the matter, a fact that could rebut any insinuation UF took advantage of him. They might also introduce exonerating forms of evidence, such as text messages that counter Rashada’s narration of facts.

No matter how the case shakes out, it’s a reminder that while NIL has brought new opportunities for athletes, the inability or unwillingness of the NCAA to police NIL for fear of antitrust liability has left a vacuum. While states have adopted NIL statues that ostensibly protect athletes, those statutes tend to lack meaningful enforcement mechanisms.

As the NCAA tries to settle House v. NCAA, perhaps the association will find ways to establish a more orderly—but not exploitative or anticompetitive—system for NIL deals.

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