Athletes: Read This Before Selling Your House Settlement Back Pay Claim
By Kristi Dosh
Last Updated on April 13, 2026
Disclaimer: This information is made available for educational purposes. It provides general information and is not intended to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.
Update: We recently hosted a webinar where we broke down more about how these third-party claim purchases work and the questions you should ask before accepting a deal. Watch the replay
It was brought to my attention last week that a company (identified as Phoenix TF LLC in its contract) is offering to buy the back pay claims athletes have under the House settlement in exchange for receiving cash now. I have reviewed a copy of the contract and sent it to a half dozen or so of my fellow attorneys.
The big pro? You don’t have to wait through appeals and risk it getting overturned or your amount decreasing.
The big con? The athletes I spoke with who have received contracts with the company are being offered approximately $0.10 on the dollar. That means if the amount you are estimated to be receiving in back pay is $150,000, you’re only getting $15,000 if you decide to cash out now with this company.
If you have an immediate need for the cash right now, then maybe it’s the right decision for you (although you should still have an attorney review/negotiate the contract).
But if you don’t need the cash immediately, ask yourself how you’re going to feel down the road if the appeals are unsuccessful and other athletes start receiving their full amount. You could get $15,000 now or $15,000 every year for 10 years for your $150,000 claim.
Is this Legit?
I have not vetted this company to be able to tell you who they are or whether they are “legit.” For me, that step wasn’t necessary after reviewing the contract, because I wouldn’t advise an athlete to sign the contract as is.
Attorney Ryan Mulvaney of Stevens & Lee, P.C. says this practice of buying claims is common in bankruptcy cases where the creditors stand to lose a lot because of the debtor’s bankruptcy.
“In those cases, sure, creditors may choose to sell their claims at a significant discount because, after weighing the potential risks and potential benefits—namely, the uncertain hopes of getting paid from the bankruptcy estate of the bankrupt debtor—they decide that, for them, it is better to recover $.30 or $.60 on the dollar today rather than risk holding out for a better return in the future.”
Unless you have an immediate and urgent need for the money, you are not in this situation right now as an athlete due back pack from the House settlement.
How Long Will Appeals Take?
Mulvaney advises athletes not to let the appeals in the case scare you into making a hasty decision.
“Athletes should not be sold on fear, uncertainty and timing about the settlement and pending appeals.”
So, let’s talk about timing. There are two appeals. In the first, the opening appellate brief is due September 3, 2025, and then the respondents’ answering brief is due October 3, 2025. In the second, the dates are September 8, 2025 and October 8, 2025.
Mulvaney says appeals are typically resolved within a few months after they are fully briefed (meaning after the October deadlines).
“I’d be surprised if the current appeals take longer than a year,” Mulvaney said.
Of course, there could be more appeals. However, none of the half dozen attorneys (in addition to myself) that I discussed this issue with expect it to be reversed on appeal. Obviously, no one can be certain, but there’s a very high burden on the parties appealing to overturn Judge Wilken’s final approval of the settlement.
Steve Berman, the co-founder and managing partner of Hagens Berman, who represents the Plaintiffs in the case, says he isn’t worried about appeals changing Judge Wilken’s decision:
“Judge Wilken was very careful and addressed each objection with deliberation and care so I see little chance of reversal. The Title IX issue which is the only one on appeal so far is frivolous in my view.”
Are Attorneys’ Fees Taken Out of Your Back Pay?
Several athletes who spoke with this company expressed to me that they believed their back pay would be significantly reduced by the appeal and that after taxes and attorneys’ fees they’d be left with very little. This isn’t an accurate picture, in my opinion (and that of half a dozen attorneys I spoke with).
The back pay estimate you were given was calculated after taking attorneys’ fees out of the settlement. I have confirmed this with Berman:
“The estimates already have removed our requested attorneys’ fees. We will adjust the amounts based on the order on fees, but unless Judge Wilken awards us more than what we asked for, their allocation estimate will not be reduced further due to attorneys’ fees.”
Will Your Back Pay be Reduced?
There’s also no reason to believe right now that your back pay estimate is going to be significantly reduced. No one can guarantee this—it’s all about weighing risks. I would put the risk of reduction at a very low percentage based on what we know right now, but you should consult with your own attorney to fully understand that risk and also risks presented by the contract.
Potential Issues With the Contract
Attorney Philip Sheng, a partner at Venable LLP, pointed out a number of issues he spotted in the contract.
First, if/when payments begin coming to you under the settlement, you have just two business days to transfer the money to the company who purchased your claim. If it takes you longer, interest beings to accrue at 12% per annum. That’s not a lot of time.
Second, there’s what is called a “liquidated damages clause” that requires the athlete to repay the entire amount they receive from the company if they breach the contract (meaning you didn’t do what the contract said you would), and don’t fix it within five days of hearing from the company, or if one of the things you agreed to in Section 2.2 (Representations and Warranties) is later found to be inaccurate or incorrect.
In my review, I also zeroed in on a bold paragraph in Article 2 of the contract that’s especially important for you to understand if you are going to sign this:
In a nutshell, here’s what you’re agreeing to:
- You understand you may be accepting a much lower amount than would be paid to you under the settlement.
- You’re agreeing that you did your own research and didn’t rely on just the information this company gave you in messages or phone calls and that you could have consulted with an attorney about this decision. That will make it more difficult later if you change your mind and want to claim the company coerced you into it or that you didn’t understand what you were agreeing to. This is why it’s imperative you do not sign this contract without having an attorney review it for you.
- If the court doesn’t allow you to transfer your claim to this company, you have to immediately repay all of the money they gave you.
If an Appeal is Successful
Sheng also points out that there is no language in the contract that covers what happens if the settlement is reversed on appeal or if your payout is either reduced or increased. Presumably, the company is taking on the risk of any reduction, but you shouldn’t ever presume anything—it should always be in writing.
To fully protect yourself, you’d want the contract to specifically lay out what happens if an appeal changes the outcome of the back pay portion of the settlement.
Should You Take the Deal?
Every athlete has to make their own decision on this. For example, if you have a sick parent who needs the money for treatment, then I can understand why you might take the money now.
However, I personally wouldn’t take it unless I absolutely had to have it right now. Mulvaney agrees.
“I would not advise my clients to sign the deals. First, you’ve waited this long – what’s another few months after briefing is submitted for appeals to run their course? Not to mention, you’re selling your existing claim for pennies on the dollar. Understanding that financial circumstances are different for each person, entering into these types of agreements for little value in return on the claim makes little sense to me. I’m also concerned that athletes are selling their claims for the short money—you played, however, for your right to and earned the long money.
Berman says his firm is looking into this company and the contract they’re offering.
“We are reviewing this development to make sure no athletes are being taken advantage, of and that they have had a chance for a parent or advisor to help them make this decision.”
In no instance should you sign this contract without having your own attorney review it. You can find attorneys who work in the NIL space here.
