Long ago, I came to the conclusion that Wall Street doesn’t really create new scams; it merely reconditions them for a new generation or group. So when I looked at the lending schemes around pro and college athletics, it was like the old aphorism from the Yankees’ catcher Yogi Berra: déjà vu all over again. I’d peeled back the layers of financial engineering many times before to find, inevitably, an already pretty rich somebody trying to extract money from someone less rich. And despite—or perhaps because of—the money coursing through sports, that’s exactly what I found here.

–Carter Dougherty, senior fellow for anti-monopoly and finance, Demand Progress

Circling Sharks

What we might call the athlete-finance industry is exploding against the backdrop of multimillion-dollar professional salaries and the new world of college player payments. The legacy of predatory finance—payday lending, income-share agreements, class action settlement factoring, multilevel marketing, and crisis-prone mortgages—all echo through what is on offer to today’s athletes. With many of them Black or brown, even supporters admit there is a whiff of indentured servitude about this new business.

The back end of this new industry, which recruits don’t hear much about during pitches, reeks of avarice and unbridled financialization: an ecosystem of opaque private funds shoveling money into nascent financial entities in the hope of, in the words of one speculator, “asymmetric risk-reward with downside protection and uncapped upside.” That’s Wall Street-speak for free money—for Wall Street, anyway.

Given the steady encroachment of Wall Street speculators into everything from youth sports to major league franchises over the last decade, the concurrent march of the Masters of the Universe deep into the financial lives of individual players should not shock seasoned observers of the business of athletics. But it has.