The NCAA recruits elite athletes with new money.

T.A., a 16-year-old Georgian native, was awarded the Summer of Distinction. Cunningham transferred to an elite high school in Southern California to pursue his NFL dreams. His father wanted to cash in early with help from agents who boasted stars like Kansas City’s JuJu Smith-Schuster as clients.

Cunningham’s family believed he could earn big sponsorships before he even got to college. Instead, the coveted junior recruit was benched, due to a decision from the state’s governing body for high school sports.

“I was shocked,” said Cunningham. “And I think everyone involved with me was shocked too.”

This story shocked college sports world. It was the first career-damaging fall-out for a high school star since the NCAA’s decision to slash restrictions around athletes profiting from their fame after a Supreme Court loss in summer 2021.

A year after the rule change, so-called “NIL deals,” named after the initials for Name Image Likeness, have become increasingly common for elite student athletes like Cunningham, who can now begin profiting from their talent before they play a minute of pro sports.

However, with great potential reward comes great risk. There are few guidelines for young athletes — kids — who are entering this chaotic new marketplace. Many come from low-income families or have been in difficult circumstances. Many people are from low-income families or difficult circumstances. They can end up breaking the state’s restrictions on high school athletes.

NBC News has reviewed a dozen written offers to high schoolers that experts have described as exploitative, including marketing contracts claiming exorbitant commissions of up to 40 percent, and booster contracts with complex fee structures and legal jargon, reducing the athlete’s freedom to transfer or enter outside deals. One “contract” was actually just a $100,000 loan.

“One of the really surprising things is the amount of people and companies and people that have just come out of the woodwork that had absolutely no experience,” said Courtney Altemus, a former financial manager for professional athletes on Wall Street, who now educates athletes across the country through her company ADVANCE NIL.

“Once the NCAA lost in court, they basically pulled out of Afghanistan,” said an athletic department administrator at an SEC school, speaking on condition of anonymity. “There’s no rules. It’s crazy.”

‘Now it’s legal’

The NCAA was stubborn about compensation issues until last summer, when the Supreme Court upheld its business model. 

“The NCAA’s business model would be flatly illegal in any other industry in America,” wrote Justice Brett Kavanaugh in a concurring opinion for the 9-0 ruling in a case of education-related benefits, accusing the multi-billion-dollar industry of suppressing athlete pay.

“[E]normous sums of money seem to flow to everyone but the athletes … many of whom are African American and from lower-income backgrounds …”

NIL markets have emerged since the Supreme Court decision. These deals include payments for autographs and endorsements on social media, as well as appearance fees for just showing up.

About two dozen states have encoded the rights of college athletes to enter NIL deals, but the patchwork of laws and rules contains few protections for players in the newly deregulated environment. Meanwhile, in a growing number of states, including California, even high school athletes can enter contracts.

NCAA rules state that schools can’t offer players recruiting deals directly. But boosters can pay prospective students through NIL deals, as long as the money is not contingent on enrollment or athletic performance. Some “companies” offering deals are just legal shells around pools of booster money.

Creativity should be encouraged

A University of Miami booster has earmarked $10 million to sign players to NIL deals through his companies. A University of Texas offensive lineman can get $50,000 for charity work, offered by donors who saw holes in the roster. A University of Tennessee booster collective reportedly bought NIL rights to the team’s future quarterback for $8 million.

In a statement, the University of Miami said the school’s success has “positioned us well to help our current student-athletes maximize Name, Image & Likeness opportunities during their time at the University. We are appreciative of all our supporters, many of whom have partnered with our student-athletes to help market their businesses.” Texas and Tennessee declined to comment.

“Boosters are looking around and saying, ‘You told me I couldn’t give an athlete a bagel and cream cheese, and now I can give a million dollars?” said Doug Fillis, whose company, Accelerate Sports Ventures, helps manage NIL within college athletic departments. “I’ll do four [million].”

Recruitment inducements were not new. They had been there for years, at least for relatives and middlemen who positioned theirself as recruiters. A quip among old-timers is that NIL stands for “now it’s legal.”

“Now, all the shady characters can come out of hiding,” said Andy Bark, who over the past few decades founded many of the top college recruiting events for high school athletes, describing middlemen and boosters who moved money through cars, prepaid debit cards, church baskets, even Starbucks cups stuffed with cash.

“The most misunderstood part is that this is not a new market. It’s just not a dirty little secret anymore.”

The free market is a welcome overcorrection for athletes, despite skepticism around “snake oil,” “early investors” and “a car salesman mentality.”

“It could set you up for life,” said Al Amadou, a senior basketball prospect from Sellersville, Pennsylvania, who hopes to get an NIL deal in college to improve housing for his family. “A lot of athletes are going to try to pursue that.”

Amadou was pushed by an extracurricular coach to create a digital tradingcard with his highlights that would be used for an online recruitment platform. Although he didn’t profit or see a contract, the card that he had created during an introductory Zoom conference remained online.

“People will take advantage of teenagers, because you don’t know a lot,” said Amadou.

Athletic departments are becoming frustrated by unaccountable boosters, agents and other players who shape the backroom market to recruits.

“Agents are basically connecting themselves to high school prospects and their families, then going around to schools saying ‘Hey, school X is offering my guy this much money in NIL deals,’” said an athletic department administrator in a Power Five conference. 

“But a lot of the numbers are made up. Anyone can call themselves an agent.”

18 state athletic organizations have made it possible for NIL deals to be allowed in high school sports within the last year.

“Allowing high schoolers to do this is just amplifying the inducements that are happening,” said Carrie Hoyt, who oversees NIL at Ohio State University. “The hardest part is that everybody recognizes what is happening, but nobody knows how to stop it.”

Despite regulations, the deals are slipping away.

“A lot of colleges will straight up offer you a lot of money,” said Grayson Howard, a top-ranked senior linebacker in Florida. “I had schools come up and say, ‘How much [in order to] get you?”

Howard stated that he avoided conversations involving money because he was concerned about losing his eligibility to play high-school sports in Florida.

Despite the free-for-all at the college level, state athletic authorities can still pull a high school athlete’s eligibility if they feel the athlete has lost “amateur” status. Athletes could be removed from the field if they lose amateur status or are found to have violated any other rules.

“I’m lucky I have a good circle,” said Howard, who grew up in inner city Jacksonville. “If you make a mistake, it could cost you your whole college career.”

‘A lot of promises’

T.A. found himself in financial difficulty last year.Terrance Cunningham, Terrance’s father and goes by the name “Big Rev”, devised a plan for his two sons to go to California to make their own money and retain eligibility. 

Levels Sports Group was the premier management firm for athletes. T.A. met the agents by phone within days. Cunningham departed home on an expenses-paid tour of USC, UCLA, Michigan, Michigan State, Central Michigan, Notre Dame, Texas and Texas A&M.

“I will go with you and introduce you to all the big boosters,” one of the agents texted Cunningham’s father, before signing Cunningham to an exclusive marketing contract that specified “no inducement, no pay-for-play,” according to exhibits later included in a legal filing.

Cunningham claimed that he never returned home from the recruiting trip. His clothes arrived in vacuum-sealed bags because his family was fighting an eviction. He signed with Levels Sports and transferred to a public high school in Orange County, sleeping on the couch of his new trainer and agent “Coach Frogg,” a.k.a. Chris Flores, who had a long list of high-profile clients including Adoree’ Jackson (NFL cornerback), JuJu Smith-Schetter (NFL wide receiver), and Bryce Young (Clemson quarterback). Uiagalelei.

“A lot of big names were brought up, a lot of promises made,” said Cunningham. “I was just excited to play ball.”

The NIL profits didn’t come, and when Los Alamitos High School’s football team made its debut under the lights he was left on the sidelines. Later he was told that he had to stay out of the game for a year. 

The problems were not related to money.

Cunningham was joining a roster that had benefited from a variety of transfers in recent years and boasted the state’s top two senior players as rated by ESPN: quarterback Malachi Nelson, the nation’s #1 recruit, and #2 wide receiver Makai Lemon, both clients of Flores. 

But then someone sent an email to the California Interscholastic Federation, requesting that it investigate a “massive influx of transfers in specifically for football.”

“Our concern is primarily focused on the possibility of exposure to devastating injuries while playing vs players such as TA Cunningham,” the email said, requesting anonymity “for fear of threats.”

The email suggested the school was complicit in “building illegal mega teams” and referenced ties to Flores’ training academy, according to a copy included as an exhibit in a legal filing.

Rob Wigod, who heads the CIF Southern Section, was familiar with the complaints and rejected Cunningham’s application — failing to see how a voluntary move to California qualified as homelessness.

“We’ve got people who are working completely independently of colleges, doing their own recruiting for those colleges,” said Wigod, describing an emerging pattern of college recruiters flouting high school bylaws in the wake of NIL. “And now, we see some of that moving into high schools, where we believe we’ve got kids transferring to play with future teammates, getting NIL deals.”

CIF received a petition seeking a preliminary injunction. It explained how the junior stars got involved in a NIL recruiting program that collapsed.

“I think a lot of us read all that and thought, is that really how this is done?” said Wigod. “Look at what it does to a young person in terms of exploiting them and taking advantage of them.”

“I think that is a very scary thing going down the road for young people to have in front of them.”

Among the exhibits in Cunningham’s filing were text messages, marketing materials, the anonymous complaint and Cunningham’s contract — an exclusive marketing agreement that claimed 20% commission on any money Cunningham’s brand might generate, even if Levels Sports played no part in the deal. The term was indefinite with a one-month opt-out clause, allowing agents to recoup expenses and enter deals on Cunningham’s behalf.

“It’s very clear that what they were trying to do was actually hook him in for his NFL career,” said Michael Caspino, Cunningham’s attorney, a well-known NIL dealmaker for five-star recruits. “That’s what a lot of these agents are trying to do.”

Mitch Schuster, an attorney for Levels Sports, described the contract as “relatively standard” and disputed allegations that promises of deals, meals and housing lured Cunningham to California.

“Any time you meet with a prospective client, you discuss a game plan,” said Schuster. “No guarantees were made.”

T.A. was awarded by the CIF. Cunningham’s favor and the Cunningham family dropped legal proceedings. Los Alamitos High school declined to comment, but noted the CIF investigation had not found a violation regarding the district or the student.

Levels Sports was forced to abandon any plans Levels Sports might have made to turn T.A. Flores was accused of sexual exploitation and cunningham was made into an asset. Flores pleaded guilty and his lawyers declined to comment on any allegations. Schuster claimed that the agency is closing down and that its clients have been released from their obligations. 

Cunningham’s message to high school athletes is “the grass isn’t always greener,” even in California. He doesn’t plan to return to Georgia where his parents still reside. 

“I just want to know why the kids are the ones who get punished, rather than the ones who put the kids in the situation,” said Cunningham.