FSU’s Leonard Hamilton Sued Over Alleged Unpaid NIL Promises

Six former Florida State basketball players sued Seminoles head basketball coach Leonard Hamilton in a Leon County (Fla.) trial court Monday, accusing Hamilton of failing to follow through on promised $250,000 NIL payments.

Darin Green Jr., Josh Nickelberry, Primo Spears, Cam’Ron Fletcher, De’Ante Green and Jalen Warley demand to be paid and also want Hamilton to pay additional damages to them.

More from Sportico.com

The case is relatively straightforward. Hamilton is accused of offering to pay recruits in exchange for committing and enrolling at FSU in 2023, inducing the recruits to act on the promise, and reneging on his promise. The case could have reverberations in college sports, where NIL deals are largely unregulated, in part due to lenient state laws and in part due to legal and practical limitations on NCAA enforcement.

The players say Hamilton not only promised each of them directly but also assured their family members there would be payment. As the 2023-24 season came to an end, the players realized Hamilton was unlikely to pay. In response, they walked out of a practice before a game against  Duke. When Hamilton realized the players could also boycott a game against Duke, he allegedly “panicked” and assured them they’d be paid the following week. But payment never happened. The players have since either transferred or exhausted their NCAA eligibility.

Represented by attorney Darren Heitner, the players insist Hamilton’s offers were not tied to a collective but instead were his commitments through business partners. As depicted in the complaint, although Hamilton allegedly described these deals as NIL-related, they were not NIL deals in any logical sense of that term. NIL is compensation in exchange for the commercial use of a college athlete’s name, image or likeness, such as through an endorsement, sponsorship or social-media influencer deal. NIL is best understood as the NCAA in 2021 removing a restraint on athletes from using a right they already have–the right of publicity–without running afoul of eligibility rules. These alleged deals with Hamilton appear more like play-to-play arrangements, which remain prohibited by NCAA membership rules but could give rise to enforceable contracts under state law.

Litigation over promised but undelivered payments for deals ostensibly labeled NIL have begun to surface. Earlier this year, University of Georgia quarterback Jaden Rashada sued University of Florida head football coach Billy Napier, UF recruiters and boosters for fraudulent inducement and related claims over what Rashada says was enforceable $13.85 million NIL deal (the defendants argue Rashada has misconstrued and exaggerated ordinary recruiting promises).

Former UNLV quarterback Matthew Sluka didn’t sue, but he quit playing for UNLV in the middle of this past season, saying a promise from a coach that a school-related collective would pay him $100,000 never materialized.

The FSU players refer to text messages as evidence in their complaint. The quoted texts include statements allegedly made by Will Cowen, an executive of FSU’s NIL collective “Rising Spear,” that suggest he knew of Hamilton’s pledge to pay. Cowen is quoted as saying that he would pay “if the money comes in from that business” so the players didn’t transfer.

The complaint acknowledges that Hamilton was “smart” in that he “avoided responding in writing” to address the unpaid promises. He instead said he’d hop on the phone with a family member. This alleged approach meant that Hamilton didn’t create evidence that could more definitively show he made promises.

One hurdle for proving breach of contract is the apparent absence of a written agreement. Like other states, Florida has a “Statute of Frauds,” which holds that contracts generally must be in writing to be enforceable. However, there are exceptions that can make an oral agreement enforceable. One is if the contract can be performed within a year. The complaint stresses that Hamilton’s promises “could have been completed within one year” and that payment was in exchange for the players to play at FSU in the 2023-24 season.

The complaint also includes claims for promissory estoppel, which asserts that the players relied to their detriment on a $250,000 promise, and Hamilton should not be left off the hook. They could have enrolled at other colleges or transferred to them but pledged to FSU in anticipation of $250,000.

Fraudulent misrepresentation and fraudulent inducement are also alleged in the complaint. They prohibit a coach from knowingly making false promises that a player is likely to rely upon. The complaint, which demands a jury trial, seeks $250,000 for each of the players and for Hamilton to pay additional damages as a means of deterring and preventing similar conduct in the future.

A complaint tells one side of the story. Hamilton will have the chance to argue his side when he answers the complaint and motions for its dismissal. He could argue that players are misconstruing ordinary recruiting into enforceable contracts. Hamilton might also argue the promised arrangements were only conditional, and not every condition was met. Mindful of the statute of frauds, he might also dispute that they were intended to be performed in only one year.

Hamilton signed an $11.25 million, five year-extension with FSU in 2021. His employment contract requires him to comply with NCAA rules. It allows the university to fire him for cause if (among other circumstances) he refuses to perform or violates his duties or fails to comply with federal law, state law, university policies or NCAA rules. This lawsuit, particularly if it advances into pretrial discovery where evidence is shared and testimony is taken, could expose him to the risk of the school using it to form the basis to fire him for cause.

Florida State has in many ways become the public poster child for many of the new business challenges facing top tier athletic departments. The Seminoles were early to court private equity money, talks that became advanced with Sixth Street before falling apart due to legal uncertainty. Seeking money via other avenues, the athletic department sought $327 million via a bond offering earlier this year. Following a disappointing football season, the school restructured the contract of head football coach Mike Norvell to explicitly free up millions for NIL purposes, a move that could be mirrored on a number of other campuses.

The school is also suing to exit the ACC in a less expensive method than the conference demands. That’s the result of seismic shifts in conference membership that quickly left the ACC, once safely ensconced among the NCAA elite, on much shakier ground. Much of this has combined with the more generic business challenges across college sports, including uncertainty over the result of the pending NCAA settlement to resolve the House, Carter and Hubbard antitrust cases, as well as personnel requirements, budget constraints, collective restructuring and increased player transfers.

FSU spent $172 million on athletics in fiscal 2023, the 17th-highest total among all public schools, according to Sportico’s college finance database. In the ACC, only Clemson ($174 million) spent more. But Florida State, its fans and its boosters are looking toward the Big Ten and SEC for comparisons, and they have been outspoken about their fears of falling behind financially. The top spending school in the Big Ten was Ohio State at $275 million; in the SEC it was Texas at $232 million.

Daniel Libit contributed to this story.

Best of Sportico.com

Sign up for Sportico’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.