Rich Paul schools young stars on NIL: 'an extreme, extreme head start on life'
· Yahoo Sports
WESTLAKE, Calif. – Rich Paul, one of the best-known sports agents in the world, sat in front of a packed conference room.
His audience was top high school athletes and their parents. The topic was Name Image Likeness (NIL).
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The marketing deals are a chance for top athletes to make millions of dollars. But some cases, Paul suggested, might involve bypassing money from corporate giants like McDonald’s.
"And I actually love a fish filet (sandwich)," Paul said, "but the person that had the deal, we ended up giving McDonald's $15 million back.
“But giving them that money back allowed us to do a partnership with Blaze Pizza and invest in Blaze Pizza.’’
The client was LeBron James, and the investment made him tens of millions of dollars.
Now, Paul said, he is trying to help prepare young athletes for their own paydays. Klutch Sports Group, an agency Paul founded in 2012, partnered with Prudential Financial on a two-day NIL camp, which included the panel discussion, last weekend for about 25 top high school athletes and their parents.
Maria DeRuccio, Klutch’s senior vice president of Brand Consulting and working with Prudential, told USA TODAY Sports, "We think this program is so important. … It was all about building a blueprint to Black wealth. They wanted to reach young athletes as they're getting these huge checks. These kids, they're in high school. They've never purchased anything outside of an app on their phone, for instance, or maybe Chipotle occasionally.
"And so now they're getting prepped to be getting these really big checks and not knowing what to do with it."
'Scared to go back broke'
Paul is worth about $120 million and Klutch has negotiated about $2 billion in total contract value, according to Yahoo Sports. He did not mention those eye-popping figures during the panel discussion, but Paul did say, "I'm so scared to go back broke."
With that in mind, Paul said, "I've seen guys come in and be the highest of the highest. And in Year 3 they're asking to borrow $5,000 from a teammate.
"And then everybody's not going to make it (to the pros) either. And so how do you capitalize off this NIL currently?"
In some cases, the high school athletes and their parents heard, it's about protecting money as much as it is making money.
Prudential Financial sent five financial advisers to meet with the athletes and their parents. One of those advisers was Delvin Joyce, who played for the New York Giants from 2002 to 2004 and was among the panelists.
"The number one thing that gets a lot of athletes in trouble, especially my college athletes, is taxes," Joyce said. "And the challenge is that there is no tax withholding on these NIL payments.
"Imagine being an athlete with incentive compensation in your contract and you got (unpaid) taxes."
But also imagine the possibilities.
"Right now with NIL, the opportunity for you to set your future self up is incredible," he said. "And so we recommend starting to at least put money into a retirement bucket so that your future self will be OK."
'The visibility is there'
During the panel discussion, Paul sat next to Jerzy Robinson, a young basketball star and one of Klutch’s more precocious clients.
She was just 15 when she signed a deal with Nike. Now 17, Robinson will play at South Carolina during the upcoming season.
"For me, the biggest transition was the business side," she said. "It's contracts, it’s language in contracts. It’s understanding, 'OK, if I work with you for a certain time, I might not be able to work with (another company).'"
Sometimes it means sacrifice, she explained. Like when 5,000 trading cards she had to sign initially were delivered to the wrong address before reaching her in South Carolina.
"I got 6 a.m. workouts," Robinson said. "I got to lift (weights). Then I got to go to in-person class because I'm a freshman. Then I have study hall for two hours and I got three days to sign 5,000 signatures.
"I was signing and I was signing. And my teammates wanted to hang out and I'm like, 'Yeah, I got to sign trading cards.' But it's a commitment."
Robinson is part of Klutch’s growing women’s division that also includes A’ja Wilson, the four-time WNBA MVP; Chelsea Gray, a six-time WNBA All-Star; and Juju Watkins, the consensus No. 1 high school recruit of the Class of 2023.
“Women have a real story and now the visibility is there,’’ Jade-Li English, the head of women's basketball at Klutch, told USA TODAY Sports.
'Laying the foundation'
Three years before the Supreme Court cleared the way for NIL in 2021, Paul lined up a $1 million, three-month internship with New Balance for Darius Bazley.
Bazley, who took the money rather than play college basketball or join the G League, was a first-round pick in the 2019 NBA Draft and played five years in the league.
"I knew that had he gone to the college he was choosing to go to, it was going to be very hard for him to actually make it for a number of different reasons," Paul told USA TODAY Sports. "And so once I was able to meet him and his mom and understand that, I was able to get creative and think about something to pivot ...
"Look, we've always got in early with kids. The only difference is we couldn't represent them. Now you can. And the other difference was there was no NIL. So I created an NIL opportunity in certain situations."
Paul’s point: He was ahead of the curve on NIL deals. He’s trying to stay ahead, too, courting potential athletes like Robinson and educating them on the NIL landscape.
"Really educating them, educating the families, because that's laying the foundation, pouring up concrete," Paul said. "It's the first time they're making money. And in some cases, it's a significant amount of money, which I believe is an extreme, extreme head start on life."
This article originally appeared on USA TODAY: Rich Paul schools young stars on NIL: 'an extreme, extreme head start on life'