On October 16, 2026, Sports Litigation Alert, published by Hackney Publications, featured Paul Levin and Randi Rubinstein in a Q&A examining future earnings agreements for athletes and the legal considerations surrounding these arrangements. The following is an excerpt:
Question: At what point does an agreement giving an investor a percentage of an athlete's future earnings begin to look more like a regulated loan than a true investment?
Answer: There is no single bright-line test, and the analysis will depend on the applicable law and the economic substance of the arrangement. Risk allocation is an important consideration—an arrangement generally looks more like an investment where the investor’s return is contingent on the athlete's future earnings and the investor bears a meaningful risk of receiving less than its initial investment, or nothing at all.
Conversely, the arrangement may look more like a loan where the investor is effectively assured repayment or a return regardless of the athlete's actual earnings. Features such as guaranteed minimum payments, fixed repayment obligations, or recourse against the athlete’s other assets could weigh toward characterization as debt.
Ultimately, the characterization will depend on the applicable statutory framework and the structure of the particular arrangement, rather than simply the label the parties give it. Companies should therefore evaluate these arrangements under applicable lending, licensing, usury, disclosure, and consumer protection laws in each relevant jurisdiction.
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