In a complaint recently filed in a Florida federal court, Chicago Bears defensive tackle Gervon Dexter Sr. argues a contract he signed with Big League Advance (BLA) as a college football star is void and unenforceable, the latest blow to a type of financing for young athletes that has consistently drawn scrutiny.

When Dexter was a junior at Florida in 2022, he says a BLA agent, Scott McBrien, reached out to him with a “6 figure financial/NIL opportunity.” As Dexter tells it, BLA explained it is an investment fund that “pays the athletes for their athletic performance.” The athlete is paid an upfront amount in exchange for agreeing to pay a portion of salary should their careers advance professionally. If the player fails to turn pro, they still keep the advance.

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BLA and its founder and CEO, Michael Schwimer, have used this cash-for-future-earnings approach with San Diego Padres shortstop Fernando Tatis Jr., who in 2021 signed a $340 million contract, and other athletes. Its investors have included Cleveland Browns executive Paul DePodesta and Marvin Bush, a younger brother of former President George W. Bush.

Sportico has obtained Dexter’s BLA contract. BLA agreed to pay him a $436,485 fee—which Dexter argues he should keep—in exchange for Dexter paying BLA 15% of his pre-tax NFL earnings for 25 years. The agreement also contained NIL elements in that BLA could use Dexter’s NIL in advertisements and promotional materials. For his part, Dexter agreed to boost BLA on social media and participate in events on BLA’s behalf.

The contract was not “pay-for-play” since it was not an inducement for Dexter to attend or remain at Florida. It instead contemplated his earnings as an NFL player, with BLA taking the chance that Dexter would go on to enjoy a lucrative NFL career.

Reggie Bush’s ongoing defamation case against the NCAA, which concerns the NCAA depicting his alleged receipt of pay from a would-be NFL marketing agent as “pay-for-play,” raises a similar dynamic. Bush’s alleged receipt of payment was likely neither NIL nor pay-for-play but instead in contemplation of future representation services (which was, and remains, prohibited by NCAA rules). Dexter’s contract blended NIL with non-NIL features, most notably a cut of Dexter’s potential NFL employment contracts.

The Dexter-BLA contract is likely in part a reflection of the NCAA’s hands-off approach to enforcement of NIL rules, and the murky landscape that exists right now for athletes, brands and other potential partners. While the NCAA continues to prohibit pay-for-play, some NIL deals, including those connected to collectives, appear more about recruitment and retention of an athlete to attend a school than the commercial use of his or her identity.

While the core of this BLA contract is about Dexter’s professional earnings, the NIL deliverables—which include 100 autographs a year and monthly social media posts endorsing the company—make the agreement slightly more complex than the deals that BLA has signed with young professional baseball players.

The contract and dispute also highlight an omnipresent challenge with BLA’s business model, which determines success by how many of its athletes vastly out-earn the valuation on their earnings when the deals were originally signed. If BLA doesn’t turn a profit on a deal, the public will likely never hear about it. If BLA makes a killing on a deal, it will likely always appear to some as predatory, as taking advantage of a young athlete before he or she blossomed into a multimillion-dollar professional.

Dexter’s lawsuit, however, focuses more on a pair of definitions under two different Florida state statutes. The first hinges on whether Schwimer’s relationship with Dexter reflects an agent-client.

Dexter’s complaint notes that under Florida’s Athlete Agent Statute, an athlete representative must include in an agency contract a set of warnings that are in all caps and contain specific wording. The warnings regard, among other things, an athlete’s potential loss of NCAA eligibility by signing the deal and an obligation that the player and agent notify the player’s athletic director within 72 hours about the deal. If the agent failed to stipulate these warnings in writing, the contract becomes voidable at the discretion of the athlete.

Although Dexter’s BLA contract notes he understood applicable NCAA rules, it did not contain the statutorily required language. Also, Dexter says Florida’s athletic director (Scott Stricklin) was not notified.

This type of statute can be powerful evidence in athlete-agent litigation. Last year, a court found Zion Williamson could exit a contract with a marketing representative in part because the contract didn’t contain a required warning that a college athlete would lose their NCAA eligibility by signing.

Dexter also maintains the contract violated Florida’s NIL statute because it contemplated a relationship that would extend years beyond his time as a college athlete. The statute says an NIL deal must be limited to time in college. Dexter also charges that Schwimer and McBrien weren’t licensed to practice in Florida as athlete agents.

A former MLB pitcher, Schwimer formed BLA in 2016 with the belief that he could use data to identify young prospects most likely to make it to baseball’s top tier. It raised $26 million in its first fund, then $130 million in its second fund, and had distributed most of that money across more than 400 baseball players before turning to college sports as a new avenue of business. As of last May, the company was looking to raise $250 million for its third fund.

In the coming weeks, BLA will answer the complaint and seek its dismissal. Expect BLA to argue that Dexter has misconstrued the relationship with the company, which will likely contend it functions not as an agent but rather a corporate partner.

Also, although Dexter’s complaint posits Florida law as governing, Dexter initialed a clause in the BLA contract that stated, “You understand and agree that Delaware Law shall govern any dispute about this Agreement ….”

Choice of law provisions are often enforceable, especially when they relate the transaction; BLA has a principal place of business in Delaware.

Dexter also initialed a clause stating he takes responsibility “for understanding all amateurism, payment, and eligibility rules and guidelines, including those of the NCAA, as well as any FTC rules and regulations governing endorsements and Social Media influencers.” BLA could insist Dexter contractually waived potential claims against BLA by virtue of the contract.

BLA could also contend that timing matters with respect to voidability. A voidable contract generally remains enforceable unless and until a party invokes a right to void it. Even if Dexter can void the contract now, he is arguably bound by its obligations until that point. BLA could argue that Dexter still must pay a cut of his four-year, $6.72 million Bears contract (which he already signed) and/or that he should return the $436,485 “fee” BLA initially paid him to use his NIL in anticipation of a longer-term engagement.

BLA could also countersue Dexter for breach of contract. The contract warns Dexter that BLA “will seek to enforce the agreement against you” if he is in breach of the contract. The contract also says that if he fails to make timely payments, BLA can impose a late fee of 10% plus interest.

Dexter is not the first pro athlete to take BLA to court.

In 2018, MLB catcher Francisco Mejia sued BLA, arguing the deal he signed with the company two years earlier was unlawfully unconscionable since he only spoke Spanish, did not retain an interpreter and had obtained only a ninth-grade education. Mejia agreed to be paid $360,000 for 10% of his future earnings.

BLA disputed the allegation, noting that Mejia’s agency reviewed the deal, and he was not in duress when signing it. Unconscionability is difficult to prove in court, especially when the plaintiff has access to professionals who can guide them through a decision. Mejia’s case did not advance. He not only dropped the lawsuit but profusely apologized in a public statement and agreed to pay a portion of BLA’s legal fees.

Although Dexter’s claims are different from those brought by Mejia, expect BLA to argue he was an adult, with some college education, when he signed it and should be bound by his agreements.

Dexter’s case might chill the market for BLA to pursue other college athletes, though with the NCAA’s passive and thus far muddled approach to NIL rule enforcement, other opportunities could still surface.

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