NFLPA Financial Advisors Presentation

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					NFLPA Financial Advisors NCAA Presentation Miami, Florida

NCAA Legislation
NCAA 2.9: The Principle of Amateurism
“…Student participation in intercollegiate athletics is an avocation and studentathletes should be protected from exploitation by professional and commercial enterprises.”

What is an Amateur?
NCAA Bylaw 12.1.1: Amateur Status
A student-athlete loses his/her amateur status if the SA:

Uses his or her athletics skill for pay in any form;
Accepts a promise of pay (for now or in future);

Signs a contract or commitment to play professional athletics;
Receives compensation from a professional sports organization based on athletics talent;

What is an Amateur?
Competes on a professional team; Enters into a draft and is drafted subsequent to collegiate enrollment; or
Enters into an agreement with an agent (oral or written).

NCAA Agent Legislation
NCAA Bylaw 12.3.1
“Student-athlete is ineligible if he/she has an oral or written agreement with an agent.”

NCAA Agent Legislation
NCAA Bylaw
It is not permissible for a student-athlete or prospective student-athlete to be represented by an agent in the future, regardless of whether the agreement is now or in the future.

NCAA Agent Legislation
NCAA Bylaw
A prospective student-athlete or studentathlete (including friends or relatives) cannot accept any benefits from an agent, financial advisor, runner, or any other person associated with an agency business, regardless of the value of the benefit or whether it is used.

NCAA Agent Legislation
NCAA Bylaw 12.3.2
Securing advice from a lawyer concerning a proposed professional sports contract shall not be considered contracting for representation by an agent under this rule, unless the lawyer also represents the individual in negotiations for such a contract.
A similar analysis can be made for the financial advisor. As long as their activities do not include marketing the individual, then the advisor would not be considered an agent.

NCAA Financial Advisors Interpretation
The NCAA Sports Liaison Committee recommended that the Council sponsor legislation for the 1996 convention that would prohibit student-athletes from making agreements with financial advisors. It was noted that a financial advisor who acts as an agent could be treated as an agent for purposes of applying NCAA legislation.

NCAA Financial Advisors Interpretation
It was voted.
“That the Council issue an official interpretation, rather than sponsor legislation, to confirm the fact that a financial advisor can be treated as an agent for purpose of the application of NCAA legislation if he or she acts as an agent.”

NCAA Student-Athlete Reinstatement Directive
Divisions I and II.
Committees noted that agent violations are considered more serious than general extra-benefit violations of Bylaws 16 (Awards, Benefits and Expenses for Enrolled Student-Athletes) or (Preferential Treatment, Benefits or Services); therefore, the monetary guidelines should be more stringent than the extrabenefit guidelines.
Committees directed the staff to impose a minimum 10 percent withholding condition for any type of impermissible benefit received by a student-athlete from an agent. (December 2000)

NCAA Student-Athlete Reinstatement Directive
Division I. In regard to agent violations, the committee affirmed that the staff should consider the following issues: the value of the benefit received by the student-athlete, the studentathlete’s awareness of the person’s agent status and the student-athlete’s involvement in obtaining the benefit. (December 2000)

NCAA Disability Insurance Policy
1. NCAA Bylaw
An individual may borrow against his/her future
earnings potential from an established, accredited, commercial lending institution, exclusively for the purpose of purchasing insurance (with no cash surrender value) against a disabling injury/illness that would prevent the individual from pursuing a chosen

career, provided a third party (including a member institution’s athletics department staff members, pro sports counseling panel, or boosters) is not involved in arranging for securing the loan.

NCAA Disability Insurance Policy
The student-athlete shall report all transactions and file copies of any loan documents associated with disability insurance with the member institution, regardless of the source of the collateral for the loan. The student-athlete also shall file copies of the insurance policy with the member institution, regardless of whether a loan is secured to purchase the insurance policy.

NCAA Disability Insurance Policy
2. Catastrophic Injury Insurance Program.
The NCAA sponsors this program for studentathletes that are catastrophically injured while participating in a covered intercollegiate athletics activity.

NCAA Disability Insurance Policy
3. Exceptional Student-Athlete Disability Insurance.
Exceptional student-athletes in the sport of football, men’s and women’s basketball, baseball, and men’s ice hockey.

Allows qualifying student-athletes to purchase disability insurance contracts with pre-approved financing. Provides the student-athlete with the opportunity to protect against future loss of earnings as a professional athlete due to a disabling injury that occurs during the collegiate career.


• Campus registration.

• • •

Providing information regarding other financial advisors. Case specific. ASK QUESTIONS!

John an enrolled men’s baseball student-athlete was

drafted by a professional baseball team. Prior to the Major League Baseball (MLB) Draft, John’s NCAA college sent out letters to all MLB teams which had expressed interest in drafting John. The letter stated that all contact with John should be made via John’s uncle (John’s legal guardian) or the college baseball coach. In accordance with NCAA rules, John and his uncle secured the services of an advisor. John’s uncle made it clear that the advisor was not to contact any professional
sports teams on John’s behalf.

Prior to the MLB Draft, the advisor contacted five professional sports teams on John’s behalf and did the following:

Asked whether or not John would be drafted;
Asked if they would pick John in the MLB Draft if were available to them; and

Was told by MLB team representatives that John would go higher in the MLB Draft than their picks. John’s uncle had directly contacted two MLB teams that were in a position to pick John. John’s uncle was unaware of the advisor’s team contacts and did not use this information to facilitate his contacts. Is the conduct of the advisor permissible under NCAA rules?


No. The NCAA college determined that the actions of the advisor were contrary to NCAA legislation and that an NCAA violation occurred.

NCAA legislation permits a student-athlete to seek legal or financial advice from an individual provided the individual does not have any direct contact with professional sports teams on behalf of a prospective or enrolled student-athlete.
In this scenario, the conduct of the advisor violated NCAA rules when the advisor contacted directly the professional sports teams on John’s behalf.

NCAA Legislation defines a prospective studentathlete as:
“…a student who has started classes for the ninth

grade. In addition, a student who has not started classes for the ninth grade becomes a prospective student-athlete if the institution provides such an individual (or the individual's relatives or friends)
any financial assistance or other benefits that the

institution does not provide to prospective students generally.

NCAA Legislation Continued . . .
An individual remains a prospective student-athlete until one of the following occurs (whichever is earlier)”:

(a) The individual officially registers and enrolls in a minimum full-time program of studies and attends classes in any term of a four-year collegiate institution's regular academic year (excluding summer); or
(b) The individual participates in a regular squad practice or competition at a four-year collegiate institution that occurs before the beginning of any term; or (c) The individual officially registers and enrolls and attends classes during the summer prior to initial enrollment and receives institutional athletics aid.

Evan, a prospective baseball student-athlete, prior to enrolling at an NCAA school did not receive NCAA rules education. Evan was drafted in the first round of the Major League Baseball (MLB) Draft. Evan secured an advisor and did the following:
1)Entered into an agreement to have the advisor represent him.

2)Participated in several baseball tryouts arranged by the advisor.
3)Signed a professional baseball team contract and received benefits from the MLB team. 4)Was evaluated by the MLB team physician and was not given medical clearance to compete; the MLB contract was rescinded. 5)Decided to enroll at an NCAA college and pursue playing collegiate baseball.

Are there any NCAA violations?


Yes. Evan compromised his amateur status by engaging in the following:
a) Signing an MLB professional contract; b) Entering into an agreement with the advisor to represent him; and


Receiving benefits from a professional MLB team.

During the summer session and prior to his initial full-time enrollment at the NCAA college, Brandon, a football studentathlete failed to inform his NCAA college that he had obtained a disability insurance policy, and the institution failed to obtain

appropriate records of such policy. Brandon obtained an unsecured loan in order to execute the insurance policy on a deferred-payment basis and based primarily upon his future earnings as a potential professional
athlete. Brandon obtained the loan from a financial advisor, who informed him that it was permissible under NCAA legislation to execute

the insurance policy.

Are the actions of the financial advisor in assisting Brandon with securing a loan for disability insurance permissible pursuant to NCAA legislation?

No. It is a violation for the financial advisor to have assisted Brandon in obtaining an unsecured loan in order to execute the insurance policy on a deferredpayment basis and based primarily on Brandon’s future earnings as a potential prospective professional athlete. Additionally, Brandon failed to notify his NCAA college about the loan and insurance policy and the NCAA college was unable to verify that the loan had been executed through an established, accredited commercial lending source prior to the policy being issued to Brandon.

Deana Garner, Angie Cretors & John Shukie NCAA Agent, Gambling and Amateurism Activities PO Box 6222 Indianapolis, IN 46206 317/917-6222

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