CEO defends $800,000 NIL deal with college athlete: ‘We're going to be on everybody's minds'

John Ruiz and his company LifeWallet made national headlines in late April as they announced an $800,000 sponsorship deal with a University of Miami basketball player, Nijel Pack.

While paying college athletes for the use of their names, images and likenesses (NIL) has been legal in the NCAA for nearly a year now, the nature of LifeWallet’s deal isn't an industry standard. Rather than leaving the financials out of the announcement, Ruiz believes their inclusion helps bring more value to the deal.

“I made a business decision to announce the amount of money that he was going to get under this agreement because I thought it was a great marketing move,” Ruiz said on Yahoo Finance Live (video above). “We're all going to be gauged by that particular number. Every single household in the U.S. that watches college sports, particularly college basketball, is going to be talking about LifeWallet. They're going to be talking about Cigarette Racing (another company owned by Ruiz). That's great marketing because we are going to be on everybody's minds. And that's exactly why at this point in time LifeWallet is really taking over sort of the industry and the whole nation."

More than six million people have now interacted with the tweet announcing the terms of the contract (two years and $400,000 per year), according to Ruiz. LifeWallet sponsors more than 100 athletes at the University of Miami and has signed a few athletes from other Florida colleges. It's also a subsidiary of the larger parent company, MSP Recovery, which Ruiz founded.

That company, which provides tech-focused health-care products, has no true sports tie-in, but Ruiz has continuously racked up NCAA clients and said the company will continue to spend that way when its $33-billion SPAC deal with Lionheart Acquisition Corp II (LCAP) closes next week.

“I don't think there's anybody in college sports that really follows college sports that doesn't know what LifeWallet is and what LifeWallet does and what it's about,” Ruiz said. “I think it's been probably, like I said, the best marketing campaign I've ever done in my life.”

NCAA clamps down on NIL

LifeWallet’s slew of deal announcements comes as the NCAA is trying to restrict NIL activity. In recently issued NIL guidance, the organization specifically called out boosters, which it defined as “any third-party entity that promotes an athletics program, assists with recruiting or assists with providing benefits to recruits, enrolled student-athletes, or their family members.”

The guidance states the NCAA will investigate any improper payment activity from boosters being masked as an NIL deal. The move comes as the NIL landscape quickly matured to collectives of boosters gathering money to pay players.

However, Ruiz maintains that because he has a legitimate business, there’s no foul play and it’s not a collective since the students are being offered the funds after they’ve signed their commitment. Therefore, he argued, there’s no recruiting enticement and the business generates real value through marketing.

Ruiz hasn’t been contacted by the NCAA, but if he is eventually deemed a booster, LifeWallet’s NIL offerings could be investigated.

“I don't consider myself a booster even though I like the University of Miami," Ruiz said. "A booster is somebody who gives money for no other reason than they want to boost the athletics departments of the particular school.”

For now, with a legitimate business behind him, Ruiz might have the best formula for legal large-scale NIL deals in the rapidly changing market.

Josh is a producer for Yahoo Finance.

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