Ex-Recruit’s Fraud Suit Against Florida Coach Exposes NIL Risks

Quarterback Jaden Rashada’s lawsuit claiming University of Florida boosters and football coach Billy Napier reneged on a $13.8 million contract marks an inflection point amid the rapidly changing landscape of compensation in college athletics.

Rashada was promised a lucrative name-image-likeness (NIL) deal in 2022 to play for the Florida Gators instead of the University of Miami, which offered him a $9.5 million contract, according to his complaint. But payment from Florida never materialized after Rashada was recruited under that false financial promise, according to his complaint filed in the US District Court for the Northern District of Florida.

Rashada’s lawsuit frames itself as the first its kind in the new “wild west” recruiting landscape emerging after the longstanding prohibition against paying collegiate players fell in 2021. Fraud and abusive contract tactics have plagued the NIL landscape. But this is the first fraud suit over recruiting efforts by a coach and collectives—third-party organizations that pool alumni donor money for NIL deals.

“The thing this case really highlighted to me was unregulated collectives, and what a disaster that is for young student-athletes without any oversight,” trademark and publicity rights attorney Janet Moreira of Caldera Law said. “It’s not fair to these students.”

While the suit shines another light on the generally unregulated world of NIL deals and provides a blueprint for other athletes, it also coincides with another dramatic change for student-athletes. Days after Rashada sued, the NCAA agreed to a nearly $2.8 billion settlement aimed at ending three antitrust lawsuits that include direct-revenue sharing with athletes.

‘We Know It’s Happening’

Until recently, the National Collegiate Athletic Association’s rules prohibited any form of compensation to student-athletes, even as college sports became a billion-dollar industry. That prohibition began to unravel in 2019 when California passed the first state law banning public universities from interfering with their athletes cashing in on their publicity rights.

Other states followed, and the dam ultimately burst in 2021. That year the US Supreme Court held in NCAA v. Alston that the organization’s non-monetary compensation restrictions violated antitrust law. In a concurrence, Justice Brett Kavanaugh went further, calling the NCAA’s amateurism rules on the whole “highly questionable.”

The NCAA later that year lifted restrictions on NIL deals, with some limits barring pay-for-play agreements and endorsement of certain products, such as alcohol. It prohibited using deals in the recruiting process to get athletes to pick a particular school or paying them for performance. Student-athletes have to provide something in return for compensation, like an endorsement.

The new system’s restrictions and purpose are “clearly” not what was described in Rashada’s complaint, sports law professor John Wolohan of Syracuse University noted.

“The NCAA is still trying to figure out where it’s at. Collectives seem to be working hand-in-hand with a lot of athletic departments,” Wolohan said. “Coaches tell donors, ‘This guy is worth X to us.’ That’s happening.”

Rashada’s lawsuit said that while he was a 19-year-old high school senior in 2022, long-time Gators booster Hugh Hathcock recruited him with “lies” until Rashada abandoned his commitment to play at Miami in November of that year. But the money from his signed NIL deal—including a $1 million signing bonus—never materialized as promised from Hathcock’s company or his NIL collective, according to the complaint.

Under NCAA rules at the time, the school “wasn’t supposed to be involved at all,” in the financial side of recruitment, the suit said. But Napier, the head coach, allegedly told Rashada that Hathcock would deliver on his promise to pay the quarterback $1 million if he signed on time. Marcus Castro-Walker, Florida’s director of player engagement and NIL, told Rashada’s agents “what UF would pay” through Hathcock, and suggested Napier would walk away if he didn’t flip on Miami before National Signing Day, the suit said.

The fraud claims against Hathcock and his company, Napier, and Castro-Walker will hinge on the contract’s exact language, any evidence of fraud by Florida, and any harm caused by their deception.

Rashada ultimately enrolled at Arizona State University before transferring to University of Georgia in April without seeking or being promised NIL money to attend either school, according to the complaint.

“He had learned his lesson,” the suit said.

‘Wild West’

The issue has become personal for Caldera Law’s Moreira, whose son is a freshman in high school and already has roughly a dozen scholarship offers to play college football. Collectives are “sketchy from the beginning” because they don’t involve a direct link between product and player, she said.

“What collectives are doing is not NIL,” said Moreira, whose practice includes focus on sports and entertainment. “Nine times out of 10, the athlete is not promoting the goods and services of any business, because there’s no business. It’s just throwing a bucket of money at them.”

With booster-driven collectives, high school students are navigating complex deals, often with experienced, successful businesspeople. These deals end up “one-sided,” said Moreira, echoing dozens of attorneys, athletes, and administrators. Of Rashada’s complaint, she said, “This poor kid got screwed.”

Attorney Kasey Havekost of Bricker Graydon LLP, whose practice helps universities with NCAA compliance, wasn’t suprised by Rashada’s lawsuit.

“We anticipated something like this would probably come about a few years after NIL became permissible,” she said.

Havekost, a former NCAA athlete herself, said she’s advised clients to be careful about making promises to athletes and noted that how schools operate NIL pacts varies.

The NCAA’s multibillion-dollar antitrust settlement could topple the formal barrier between schools and players. Havekost said she hopes it will push some of the behind-the-curtains deals out in the open. Transparency has been a concern, she said, with “a big pushback from athletes” who don’t know what others like them were getting or their market value.

Although the exact nature of the revenue-sharing structure isn’t public, the settlement could alter how universities engaged in NIL agreements, said Wolohan. Lucrative NIL deals may prove essential for universities to recruit the best players, he said.

The NCAA and member schools will have to design a system around a variety of competing interests. Wolohan said they will have to weigh the benefits of sharing revenue evenly across a school’s sports and teams against factors like packages to attract top talent, NIL rules balancing competition, and the threat of litigation. And they will need to do that while also navigating Title IX’s gender equity requirements and a patchwork of state NIL and publicity rights laws.

How they set up those rules could have major consequences beyond the litigation risks. If the revenue shared in the antitrust agreement is distributed evenly to schools and their sports programs, universities might be incentivized to slash whole sports from their athletic departments to leave a bigger share to entice recruits in big money sports like football and men’s basketball.

“That’s the fear, isn’t it?” Wolohan said.

The case is Rashada v. Hathcock, N.D. Fla., No. 24-219.