Division I Amateurism

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Division I Amateurism

• 2009 Regional Rules Seminar
• Jobrina Perez
• Geoff Silver

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Overview

• Definition of Professional Athletics Team.
• Actual and necessary expenses.
• Contracts.
• Competition with professionals.
• Expenses from Outside Amateur Teams.
• Payment Based on Performance.
• Expenses from Sponsor other than Parent or
  Nonprofessional Sponsor of Event
• Training Expenses.

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• Definition of Professional Athletics Team.
• Actual necessary expenses.
• Contracts.
• Competition with professionals.

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Professional Athletics Team

• Definition
• A professional team is an organized team that
  declares itself to be a professional team or
  provides ANY of its players more than actual and
  necessary expenses.

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Professional Athletics TeamCase Study

• NCAA Bylaw 12.02.4-(a) provides exhaustive list
  of actual necessary expenses
• Meals and lodging directly tied to competition or
  practice held in preparation for competition.
• Apparel, equipment and supplies.
• Coaching and instruction.
• Health/medical insurance.
• Transportation related to practice or
  competition.
• Medical treatment and physical therapy.
• Facility usage.
• Entry fees.
• Other reasonable expenses.

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Actual Necessary ExpensesCase Study

• Anna, a womens volleyball prospect, participates
  on a club team in her hometown in Serbia.
• Pre-season training camp begins in August and the
  season runs from September through February.
• The club team provides Anna with year-round
  living expenses with the expectation that team
  members are training/practicing together for the
  next season.
• Professional athletics team?

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Actual Necessary ExpensesCase Study

• Yes, expenses exceed limitations set forth in
  Bylaw 12.02.4.
• Meals and lodging must be tied directly to
  competition and practice held in preparation for
  competition.
• Out-of-season expenses (i.e. pre-training camp)
  not considered actual necessary expenses under
  this legislation.
• Training expenses may only be provided by USOC or
  NGB or equivalent organization for other nations
  (Bylaw 12.1.2.4.5).

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Actual Necessary ExpensesCase Study

• Henry, a mens basketball prospect from Spain,
  receives a 2,000 monthly stipend and an
  apartment from his club team.
• Henry informed the NCAA Eligibility Center that
  300 of the 2,000 monthly stipend was spent on
  transportation expenses.
• These transportation expenses included travel to
  practice, the home competition site and travel
  for personal reasons (e.g. grocery store, weekend
  trips).
• Permissible transportation expenses or
  professional team issue?

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Actual Necessary ExpensesCase Study

• Permissible transportation expenses limited to
  expenses to and from practice, competition and
  travel to training/practice site at start of
  season and travel home at end of season.
• Transportation expenses for personal reasons may
  not be considered in analysis.

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Actual Necessary ExpensesCase Study

• Henry has also asserted the following as monthly
  actual necessary expenses
• Cellular phone charges (50)
• Haircuts (20)
• Laundry (20)
• Clothing expenses - non-athletic apparel(100)
• Entertainment (e.g. movies, restaurants (150).
• Permissible expenses under 12.02.4-(a)?

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Actual Necessary ExpensesCase Study

• Henrys expenses could only be considered under
  the other reasonable expenses category of Bylaw
  12.02.4-(a).
• Other reasonable expenses category is not
  intended to be a catch-all provision to account
  for expenses not specifically identified in Bylaw
  12.02.4-(a).

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Actual Necessary ExpensesCase Study

• Proposal No. 2002-49 added other reasonable
  expenses incidental to participation language to
  Bylaw 12.02.4-(a).
• Prior to the adoption of Proposal No. 2002-49,
  any team that provided an expense not listed as
  an actual and necessary expense under the
  definition of a professional team was considered
  a professional team.
• The intent of the Proposal No. 2002-49 was to
  clarify that only teams providing substantial
  funding to its team members, not merely
  reasonable expense money, should be classified as
  professional.

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Actual Necessary ExpensesCase Study

• Proposal No. 2004-150 removed incidental to
  participation language.
• Prior to Proposal No. 2004-150, confusion arose
  as to whether reasonable expenses unrelated to
  participation would be appropriate under the
  legislation.
• This amendment clarified the definition of actual
  and necessary expenses and allowed interpretive
  flexibility to permit a less bureaucratic
  application of the rule.

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Actual Necessary ExpensesCase Study

• Therefore, only a limited amount of Henrys
  expenses (e.g. laundry expenses) could be
  considered actual necessary expenses.
• Based on the legislative intent, Henrys
  expenses, in totality, could not all be accounted
  for under the other reasonable expenses
  category.

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Contracts Case Study

• Katie signs a contract with a European club
  basketball team.
• Under the contract, Katie will receive 1,500 per
  month and an apartment.
• The contract provides that Katie shall
  participate for the club team and take part in
  any team promotional functions/appearances,
  including youth clinics and other community
  activities.

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Contracts Case Study

• The contract does not specify that any amount of
  the 1,500 stipend is for her off-court
  obligations.
• Katie is not able to account for 1,500 in
  monthly expenses under a 12.02.4-(a) analysis.
• As a result, Katie has asserted that 500 of her
  monthly stipend should be considered employment
  earnings and excluded from a 12.02.4-(a)analysis.
  
• Is Katie correct?

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Contracts Case Study

• No, Katie has jeopardized her eligibility.
• The contract does not specify that a portion of
  compensation is for off-court obligations.
• Contract must clearly distinguish compensation
  for participation on team vs. compensation for
  employment responsibilities.
• Example a contract states that player will
  receive X for teaching physical education
  classes at educational institution associated
  with club team and X for participation on club
  team.

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Competition with Professionals

• Alex is a member of an amateur club soccer team
  in Spain.
• Alexs club also sponsors a professional team.
• Alex receives no more than actual necessary
  expenses from the club.
• During the course of the season, a member of the
  clubs professional team competed with Alex on
  his amateur team for two contests as part of a
  rehabilitation assignment.
• Has Alex jeopardized his amateur status?

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Competition with Professionals

• Yes, Alex has jeopardized his amateur status.
• Individual playing down professionalized the
  amateur team.
• Exception may participate on a team with a
  professional if the professional is not being
  paid by the team to be a member of that team.

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• Expenses from Outside Amateur Teams

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Expenses from Outside Amateur Team/Organization
Case Study

• Sophia, a gymnastics prospect, has been invited
  to participate in the Future Olympians Camp, a
  one-week training camp for elite gymnasts
  conducted by a world-renowned coach.
• The camp will emphasize mental and physical
  training techniques and will not include any
  competition.

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Expenses from Outside Amateur Team/Organization
Case Study

• Future Olympians has offered to pay all of
  Sophias expenses associated with the camp (e.g.
  travel, room and board).
• Permissible for Future Olympians to provide
  Sophias expenses?

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Expenses from Outside Amateur Team/Organization
Case Study

• No, in order to provide expenses, Future
  Olympians must conduct organized competition for
  the participants receiving expenses.
• November 22, 1989 staff interpretation, Item Ref.
  f

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Expenses from Outside Amateur Team/Organization
Case Study

• Expenses received from an outside amateur sports
  team or organization may not exceed actual and
  necessary travel, room and board expenses, and
  apparel and equipment for competition and
  practice held in preparation for such
  competition.

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Expenses from Outside Amateur Team/Organization
Case Study

• Questions to Ask
• Are the expenses limited to travel, room and
  board, apparel and equipment?
• Are the expenses tied directly to competition or
  practice in preparation for competition?

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• Payment Based on Performance
• Pre-enrollment prize money
• Post-enrollment prize money

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Payment Based on Performance

• Impermissible to receive any payment, including
  actual and necessary expenses
• Conditioned on the individual's or team's place
  finish or performance, or
• Given on an incentive basis, or
• Receipt of expenses in excess of the same
  reasonable amount for permissible expenses given
  to all individuals or team members involved in
  the competition. 

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Prize Money Pre-enrollment

• Prior to collegiate enrollment, an individual may
  accept prize money based on place finish or
  performance in an open athletics event (an event
  that is not invitation only).
•  
• Such prize money may not exceed actual and
  necessary expenses, and
• May be provided only by the sponsor of the open
  event.

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Payment Based on PerformanceCase Study

• Mia, a prospect, participated on the Jayhawk
  Soccer Team, an amateur team, during the summer
  of 2008.
• Mia signed a contract that included a bonus of
  20 for each win and 10 for each draw.
• The Jayhawks won four games in 2008 and Mia
  received bonuses totaling 80 from the team.  

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Prize Money Pre-enrollmentCase Study

• Has Mia jeopardized her amateur status in her
  sport by accepting the bonus money?
• Yes.
• Accepted payment based on teams performance.
• Bonus received from team, an impermissible
  source.
• Doesnt meet pre-enrollment exception to payment
  based on performance.
• Facts specify this is amateur team, so no
  professional contract issues.

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Prize Money Pre-enrollmentCase Study

• Prince, a prospect, participated in open tennis
  tournament during winter break sponsored by The
  Racket, a nonprofessional organization, in which
  prize money was awarded based on place finish.
• Prince qualified for 300 cash based on his place
  finish in the event. 
• Princes actual and necessary expenses were
  1,000.
• The Racket allowed Prince to keep the 300 to
  offset some of his actual and necessary expenses.

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Prize Money Pre-enrollmentCase Study

• Has Prince jeopardized his amateur status in his
  sport by accepting prize money?
• No.
• Accepted pay prior to collegiate enrollment.
• Did not exceed actual and necessary expenses.
• Provided by nonprofessional sponsor of open
  event.

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Prize Money Post-enrollmentCase Study

• What if Prince was a current student-athlete
  instead of a prospect?

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Proposal 2008-13-B

• In individual sports, may accept prize money
  based on place finish or performance in an open
  athletics event (an event that is not invitation
  only).
• Such prize money may not exceed actual and
  necessary expenses
• May be provided only by the sponsor of the open
  event and
• For competition held outside institution's
  playing season and during summer vacation period.

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Prize Money Post-enrollmentCase Study

• What if Prince was a current student-athlete
  instead of a prospect?
• Yes.
• Exception only applies during summer vacation
  period and outside playing season.
• Proposal 2008-13-b.
• Effective immediately.

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• Expenses from Sponsor other than Parent or
  Nonprofessional Sponsor of Event.

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Expenses from Sponsor other than Parent or
Nonprofessional Sponsor of Event

• Prohibits the receipt of expenses to participate
  in athletics competition (while not representing
  an educational institution) from
• A sponsor other than an individual upon whom the
  athlete is naturally or legally dependent, or
• Nonprofessional organization that is sponsoring
  the competition.

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Expenses from Sponsor other than Parent or
Nonprofessional Sponsor of Event

• Fundraising Issues
• Was the money raised placed into the teams
  general fund?
• Was the money raised designated specifically for
  one individuals use?
• Is the individual permitted to participate even
  if he or she does not raise the minimum amount?

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Expenses from Sponsor other than Parent or
Nonprofessional Sponsor of EventCase Study

• Sammy participated in two overseas baseball
  tournaments.
• Sammy raised money from friends and various
  businesses in the community for his expenses.
• Sammy raised a total of 2,000 to assist with
  travel to the tournament.
• Sammys actual and necessary expenses were 3,500.

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Expenses from Sponsor other than Parent or
Nonprofessional Sponsor of EventCase Study

• Did Sammy jeopardize his amateur status by
  accepting the funds raised?
• Yes.
• Sammy received money from sponsors other than his
  parents or amateur sponsor of the event.
• Funds raised were solicited on behalf of and
  earmarked for Sammy .
• Even though his expenses exceeded the fundraised
  dollars.

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Expenses from Sponsor other than Parent or
Nonprofessional Sponsor of EventCase Study

• What if Sammy didnt use the money he raised for
  his individual expenses?
• Money raised placed in a general fund for entire
  baseball team to use
• Rather than earmarked for a specific athlete's
  expenses.
• Entire team able to participate, regardless of
  amount raised.
• May 3, 2007 and January 2, 2008 educational
  columns.

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• Training Expenses

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Training Expenses

• An individual may receive actual and necessary
  expenses to cover
• Developmental training, coaching, facility usage,
  equipment, apparel, supplies, comprehensive
  health insurance, travel, room and board
• Expenses must be approved and provided directly
  by the USOC or appropriate NGB in the sport (or
  international equivalent organization of that
  nation).  
• May include grants (not prize money), based on
  individuals performance in a specific event(s).

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Training ExpensesCase Study

• Prior to initial-collegiate enrollment, Josie
  accepted 5,000 from Ontario government as part
  of "Quest for Gold" funding program.
• Josie used to assist with actual and necessary
  training expenses in conjunction with efforts to
  make Canadian National Junior Lacrosse team.
• Josies training expenses during the year were
  10,000.

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Training ExpensesCase Study

• Did Josie jeopardize her amateur status by
  accepting the training expenses from Quest for
  Gold?
• Yes.
• Organization not appropriate source under NCAA
  legislation to provide training expenses.
• Even though her expenses exceeded the funds
  provided by the program.

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Training ExpensesCase Study

• Annie is track field student-athlete from
  Brazil.
• Brazilian Track and Field Association (NGB)
  established Run Strong program that provides
  financial assistance to young up and coming
  athletes.
• Annie received assistance from Run Strong Program.

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Training ExpensesCase Study

• Annie received the following expenses through the
  Run Strong
• Access to appropriate training facilities
• Coaching
• Accident and illness insurance
• Room and board costs and
• Adequate pocket money.

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Training ExpensesCase Study

• Did Annie jeopardize her amateur status by
  accepting expenses through Run Strong Program?
• Yes.
• Bylaw 12.1.2.4.5 is exhaustive list of expenses.
• Adequate pocket money would be problematic
• Even though expenses were from permissible source.

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Summary

• Definition of Professional Athletics Team.
• Permissible expenses.
• Contracts.
• Competition with professionals.
• Expenses from Outside Amateur Teams.
• Payment Based on Performance.
• Expenses from Sponsor other than Parent or
  Nonprofessional Sponsor of Event
• Training Expenses.

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• Questions?