NFL Wide Receiver Kendall Wright Owes $400k To Athlete Stock Exchange After Breaching Contract
Minnesota Vikings wide receiver Kendall Wright has had a judgment entered into against him in the amount of $386,055.83, which Wright will now owe to the athlete stock exchange Fantex. It signalled the somewhat quick end to a lawsuit originally filed by Fantex against Wright in the Superior Court of California County of San Francisco back in January.
In March 2015, Wright entered into what was called a Brand Agreement with Fantex, wherein Fantex purchased an interest in Wright’s “Brand Income,” defined within such contracts that Fantex creates with players. Generally, it includes income generated from current team contracts, expected future on-field income, certain endorsements and appearance fees. Potential post-career activities are sometimes included in the formula as well.
While Fantex delivered Wright with an up-front payment of $3.125 million in exchange for the ongoing 10% royalty fee, Wright failed to make all required payments to Fantex.
In total, Fantex said it was out $312,715.25 by the time of filing its 1 count Breach of Contract Complaint, which escalated to $349,157.22 (plus attorney’s fees and costs) by the time Fantex filed its motion for summary judgment. Wright had made a couple of late payments prior to Fantex filing the Complaint, but nothing had been delivered since November 2017.
Wright signed a 1-year, $1 million contract with the Vikings in March 2018.
The wide receiver was just 1 of 20 athletes that Fantex had entered into Brand Agreements with, presenting the athletes with a generous up-front stipends in exchange for a guarantee of a stream of revenue from future income sources. Players such as Vernon Davis, Alshon Jeffery, Ryan Shzier and EJ Manuel also signed up for the deal that was being offered.
Essentially, the Brand Agreements, such as the one entered into between Wright and Fantex, serve as a hedge for the players. They may be selling themselves short, but they receive up-front money against their projected future earnings and turn some of their non-guaranteed future income (particularly in the NFL) into money in hand. However, it can backfire when a player goes on to achieve future success, leading the athlete to have buyer’s remorse and possibly not want to make required payments. As Fantex has proven, the judicial system finds the contracts enforceable and the athletes have no choice but to pay based on the terms therein.