Chicago Bears Rookie Gervon Dexter Files Lawsuit Over NIL Deal

Introduction

In June 2021, the Supreme Court in National Collegiate Athletic Association v. Alston changed the landscape of collegiate athletics by ruling that the NCAA violated the Sherman Antitrust Act when it prohibited member institutions from offering athletes any in-kind benefit that is tethered to education.¹[1]Nat’l Collegiate Athletic Ass’n v. Alston, 141 U.S. 2141 (2021). At the same time, the NCAA was facing a July 1, 2021 effective date of the first of many state laws restraining the NCAA from penalizing athletes who capitalize on their name, image, and likeness (“NIL”).²[2]Intercollegiate Athlete Compensation and Rights, Florida (2020) https://www.flsenate.gov/Committees/billsummaries/2020/html/2187. The NCAA responded by adopting a policy that allows all student-athletes to exploit their NIL consistent with state law. For the first time in NCAA history, student-athletes across the country would be able to profit off their personal brand while attending college.³[3]Michelle Brutlag Hosick, NCAA Adopts Interim Name, Image and Likeness Policy, NCAA, (June 30, 2021), https://www.ncaa.org/news/2021/6/30/ncaa-adopts-interim-name-image-and-likeness-policy.aspx. As student-athletes navigate this initial foray into NIL commercial activity, they have made some missteps with unintended consequences for the athlete’s future brand opportunities.⁴[4]Dan Murphy, Legal Threats, NIL Among Top Issues Facing New NCAA President, ESPN, (Mar. 1, 2023), https://www.espn.com/college-sports/story/_/id/35755198/legal-threats-nil-top-issues-facing-new-ncaa-president. Chicago Bears rookie Gervon Dexter offers a cautionary tale.

During his time as a student at the University of Florida and a member of the Gators football team in 2022, Gervon Dexter signed an NIL deal with Big League Advance Fund (“BLAF”), an investment capital company.⁵[5]Dexter v. Big League Advance Fund II LP, (Fla. Supp. 2023), https://drive.google.com/file/d/1dXyEqxJRSqrbvYL6y-vAAQU_0LkvbJ-s/view. In that deal, Dexter pledged 15% of his pre-tax NFL earnings for the next 25 years in exchange for a one-time payment of $436,485.⁶[6]Id. After being selected in the second round of the 2023 NFL draft, Dexter signed a four-year, $6.72 million contract with the Bears, meaning he would owe over $1 million to BLAF just off of this contract alone.⁷[7]Id. Having unwittingly mortgaged his career earnings to BLAF, Dexter filed a lawsuit in Florida federal Court seeking to void his NIL agreement with BLAF as a violation of the Florida NIL law.⁸[8]Id.

Florida NIL Law

Florida’s NIL law is titled “Intercollegiate athlete compensation and rights; workshops, limitation on liability; rulemaking authority.” The initial version of the law went into effect on July 1, 2021.⁹[9]Intercollegiate athlete compensation and rights; workshops; limitation on liability; rule making authority. Section 1006.74 Florida (2023), https://www.flsenate.gov/Laws/Statutes/2023/1006.74. It empowers college athletes to have an equal opportunity to control and profit from the commercial use of their name, image, or likeness, and protect them from unauthorized appropriation and commercial exploitation of their right to publicity.¹⁰[10]Id. The law further restrains the NCAA from infringing on a student-athletes ability to earn compensation for their name, image, or likeness.¹¹[11]Id. Most pertinent to Dexter’s lawsuit, the original Florida law states, “The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image, or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution.”¹²[12]FLA. STAT. § 1006.74 (2020), https://www.flsenate.gov/Session/Bill/2020/646/BillText/er/PDF. In other words, under this section of the initial version of the Florida NIL law, NIL deals with student-athletes at Florida universities are not enforceable once the athlete is no longer enrolled and eligible to play.¹³[13]Id. However, in February 2023, Florida amended its NIL law, eliminating the language quoted above.¹⁴[14]Andrea Adleson, Florida Updates NIL Legislation to Remove Legal Restrictions, ESPN, (Feb. 16, 2023), https://www.espn.com/college-football/story/_/id/35673223/florida-updates-nil-legislation-remove-legal-restrictions.

The likely intent behind this revision of of the Florida statute was to compete better with other states whose less restrictive NIL laws gave them a recruiting edge over Florida schools.¹⁵[15]FLA. STAT. § 1006.74 (2023) https://www.flsenate.gov/Laws/Statutes/2023/1006.74. In theory, these changes to the Florida NIL law would allow universities to better assist student-athletes in contracting NIL deals.¹⁶[16]Id. Accordingly, the 2023 amendments removed the section of the law restricting the duration of NIL deals to the period of the student-athlete’s enrollment.¹⁷[17]Id. The revision took effect nearly a year after Dexter signed his NIL agreement with BLAF in 2022.

In his declaratory judgment complaint, Dexter claims that his deal with BLAF is subject to the initial version of the Florida law.¹⁸[18]Id. He maintains that by attaching his earnings for the next 25 years, BLAF violated the law’s duration limits and the deal is void.¹⁹[19]Dexter (Fla. Supp. 2023) https://drive.google.com/file/d/1dXyEqxJRSqrbvYL6y-vAAQU_0LkvbJ-s/view. Dexter further asserts that the agreement is void and unenforceable based on violation of Florida’s Athlete Agent Statute, which requires entities such as BLAF to be licensed by the state and include statutory language in the representation agreement.²⁰[20]Id. BLAF has yet to answer Dexter’s complaint.

Implications

This lawsuit illuminates concerns about predatory NIL deals that take advantage of young athletes who are not equipped to understand the nuances of what they are signing. Today, some states, including Florida, have provisions within their NIL laws that require student-athletes to participate in financial literacy, life skills, and entrepreneurship courses about NIL practices.²¹[21]Id. These laws also require all NIL deals to be signed by the student-athlete’s agent so to protect them from unauthorized or exploitative NIL agreements.²²[22]FLA. STAT. § 1006.74 https://www.flsenate.gov/Laws/Statutes/2023/1006.74. To further prevent situations like Dexter’s from happening in the future, the NCAA and universities should provide integrated guidance to make sure student-athletes have the proper resources surrounding NIL.

Written by: Matthew Bereche
Matthew is a J.D. Candidate at Brooklyn Law School