Teenage basketball stars are making big money before they even get to the NBA

Amateur athletes now have many options that allow them to not only chart a course to the pros, but to monetize that journey each step of the way.

Tyler Smith is 16 years old, 6-foot-9 and has the kind of basketball skills that make college coaches swoon. But the Houston-area athlete has given up his future NCAA eligibility — and his last two years of high school. Instead, he’s going pro. 

Smith and 23 of the brightest young players in the U.S. and abroad have signed to play in a new basketball league — Overtime Elite — which launched in March and is part of Overtime, a media company that first started in 2015 with an app that featured highlights of amateur basketball action. Each OTE player will earn $100,000 a year, train year-round at state-of-the art facilities, take classes on financial literacy and social activism and be coached by former University of Connecticut and NBA veteran Kevin Ollie. 

The league is part of a burgeoning world in which amateur athletes have myriad options available that allow them to not only chart a course to the pros, but to monetize that journey each step of the way. The traditional path of a teenage phenom trying to secure an athletic scholarship at a Division I powerhouse program and work toward the goal of playing professionally has given way to a new business model: earn money and build your brand early.  

“At the end of the day, the pros outweighed the cons,” said Chris Gaston, a Houston-based agent who founded Family First Sports, a NBA-focused agency, and who represents Smith. He said Smith and his mother thought about the deal for more than three months before making a decision. “Tyler’s goal is to be a professional basketball player. He figured this is the best route to get to the NBA.”

Even before a Supreme Court ruling in June established that the NCAA cannot prevent student-athletes from being compensated — a decades-old issue that had been lopsided in favor of colleges and universities fattening their coffers off the performances of their players — many young sports stars had begun skipping the college route altogether, choosing to instead earn a six-figure salary, sometimes at the same age a teenager is eligible to apply for a driver’s license. Some college athletes are already signing lucrative sponsorship deals.

Now, between alternative routes like Overtime Elite and the lucrative endorsement deals college players are attracting, young athletes have a growing number of choices to make money — and plenty of people who want to help them do so while taking a bit for themselves. The growing market has attracted some major backers. Amazon founder Jeff Bezos and Canadian rapper Drake have invested in Overtime Elite, which launched in March and bills itself as a direct path to the NBA, where players ages 16 to 19 are salaried employees. 

Overtime declined to make executives available for interviews.

While the market now offers young athletes far more options than before, some in the sports media industry warn that some of those choices are riskier than others. Steve Trax, the head of sports and entertainment for MAI Capital Management, warns about the tradeoffs.

“It’s important to think through the short-term wants, but consider the long-term needs, and not go chasing the almighty dollar ahead of a very structured process,” he said. 

“My advice to all young athletes and their families is they need to walk through that process very slowly,” Trax added. “And I strongly advise families to develop a strong team of advisers.”

It’s a distinct change from even just a few years ago. Since the early 2010s, a boom in social media content around amateur basketball has raised the profiles of some young players, including  Zion Williamson, whose high school highlights became an internet sensation. (After one season at Duke, Williamson was the NBA’s No. 1 draft pick in 2019 and now stars for the New Orleans Pelicans.)

Young basketball players no longer have to make it to the pros to capitalize off their athletic skills. Julian Newman first drew attention on social media as a pint-size fifth grader on his high school varsity team in Orlando, Florida. Now 20, Newman has 749,000 Instagram followers, a clothing line and a reality show. And he’s still working toward his dream of playing in the NBA, training in Las Vegas with his sights set on playing professionally either in Australia or the NBA’s G League.

“It’s easier to build a brand now. The world, it runs off the internet,” said Newman, who skipped the college route. “But,” he cautioned, “you still got to have it. Some people can make their own brand and it won’t do anything, because no one cares about that person. No disrespect to anybody. There are some great hoopers who don’t have a good following behind them, so their brand won’t do well. Some have to make it to the NBA and become an All-Star to have their brand be popular.”

The NBA has provided another option. The year-old Ignite program within the NBA’s G League allows high school graduates to sign a lucrative deal and train and develop for a year before turning 19, the age when prospects are draft-eligible. Ignite players give up their NCAA eligibility as a trade-off, but the year of intense training could bolster their draft value. After Ignite’s inaugural 2020-21 campaign ended, two of its players were among the first 10 selections of the ʼ21 NBA draft — Jalen Green at No. 2, and Jonathan Kuminga at No. 7. 

“Beauty is in the eye of the beholder,” said Gaston, the Houston sports agent. “The G League is not for everybody. Overtime is not for everybody. In college, you have to pick what route is best for you and your family. There’s no one-size-fits-all with this.” 

Dyson Daniels, a highly touted 18-year-old guard from Australia, said he chose Ignite over college not only for the rich basketball experience and development and the opportunity to be compensated, but also because Ignite fosters off-the-court growth of its players. 

“They’re helping us do things like build our brand,” Daniels said. “They have people here who specialize in that stuff. Having a big brand today is a big thing. I think I made the right decision.”

Gaston said the same of Overtime Elite and Smith.

“They’re going to be taking classes on financial literacy, social activism,” he said of the players. “They’re going to learn a lot of life lessons.” 

Even NBA Commissioner Adam Silver endorsed Overtime Elite this year. 

“I think it’s generally good for the community to have optionality, especially when very solid people, which appears to be the case, are backing it and behind it,” Silver said before the 2021 All-Star Game. 

But the decision to embrace these opportunities is not a simple one. Joining these leagues means forgoing NCAA eligibility, and in Overtime Elite’s case, high school eligibility, too, meaning players can’t get scholarships if they change their minds. Overtime Elite does guarantee $100,000 toward college tuition if a player decides not to pursue a pro career.

“College eligibility and preservation of eligibility is very important to a prospective professional basketball player,” said Jason Setchen, a Florida attorney who has represented numerous NCAA athletes. “And if it’s lost, it may be gone forever. Kids need to be cognizant of that.”

It’s a choice that Setchen worries some young athletes aren’t ready to make.

“Most kids that are 17 and looking at that kind of money in the short term, even at the expense of their eligibility, may not be mature enough to make an informed decision,” he said. “The collegiate-NCAA pathway at this point in time is still a lot more proven.”

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