NCAA Sports Contracts and Amateurism


A sample policy on amateurism and the NCAA is as follows: As a member of the NCAA, State University requires that all of its student-athletes be amateurs in their sport. You are a professional if you:

  • Are paid (in any form) or accept the promise of pay for playing in an athletics contest;
  • Sign a contract or verbally commit with an agent or a professional sports organization;
  • Ask that your name be placed on a draft list (Note: in basketball, once you become a student-athlete at an NCAA school, you may enter a professional league’s draft one time without jeopardizing your eligibility provided you are not drafted by any team in that league and you declare your intention in writing to return to college within 30 days after the draft;
  • Use your athletics skill for pay in any form (for example, TV commercials, demonstrations);
  • Play on a professional athletics team; or
  • Participate on an amateur sports team and receive any salary, incentive payment, award, gratuity, educational expenses or expense allowance (other than playing apparel, equipment and actual and necessary travel, and room and board expenses).

Though the National Collegiate Athletic Association (NCAA) is considered a nonprofit organization, its billion-dollar television contract and its rules and policies affect the sports industry in numerous ways and often present a conflict between the concepts of amateurism and professionalism.

The NCAA was originally established to address safety issues involved in the sport of football. The organization has grown to become the largest amateur organization in the United States related to the regulation of athletes. Membership in the NCAA is divided into Division III, Division II and Division I, the largest division and the one that offers the most scholarships to athletes. Each sport has its own rules and limits the number of scholarships in a given sport. Sports such as football and basketball are characterized as “revenue” sports while soccer, gymnastics, track and field, and other sports are considered “non-revenue sports.”

Membership in the NCAA is entirely voluntary, and some colleges or universities have chosen not to become a member of this organization. However, more than 1,200 schools are now members. Sharing in revenues generated by the NCAA is similar to a shareholder distribution plan. This “sharing of the wealth” is driven by television contracts with the organization for post-season football bowl championships and the contract with network television for the NCAA Division I Men’s Basketball Tournament.

Recognizing that the professional sports industry and the minor leagues are now competitors in a sense for players, the NCAA has recently modified its rules regarding amateurism to allow a professional athlete to participate in a college or university sports program if the athlete has remaining eligibility, and the participation is in a different sport than the player’s professional sport. Thus, a 27-year-old football quarterback who played professionally as a minor league baseball player may still be able to compete as an amateur in football for a college or university. It will be interesting to see if the NCAA changes its position further on “amateurism” in the near future.

Evolution of Amateurism

An amateur athlete used to be defined as someone who participated purely for the love of the sport and did not expect compensation for athletic performance. For numerous years, the United States Olympic Committee (USOC) prevented professional athletes from participating in the Olympic Games just as the NCAA does not allow professional athletes to participate in college as amateurs within that particular sport. The USOC has modified its nonprofessional agenda, however, and actually endorses professionals to participate in its Olympic events. However, the NCAA continues to refuse to allow athletes to be paid for their services as athletes other than scholarships.

Other NCAA Contract Issues

Numerous rules and regulations surround the athlete that signs an NCAA approved letter of intent. Athletes agree to rules that regulate transferring to another institution, being randomly tested for performance-enhancing drugs, and earning a minimum number of credit hours in their studies. These and other rules are important aspects of the contractual relationship between the NCAA and the athlete. The NCAA and USOC have agreed to examine ways to ensure that talented amateur athletes who have remaining collegiate eligibility may actually earn a stipend from an Olympic national governing body such as United States Swimming and still retain amateur status.

Letter of Intent

Division I, Division II and NAIA[1] athletes are the beneficiaries of athletic scholarships (more specifically referred to as grants-in-aid). They sign an agreement with the college or university in the form of a letter of intent, which is a binding agreement between the athlete and an institution. This agreement provides that in exchange for the athlete’s services in their sport, they will have tuition, room and board, and books paid for by the institution. However, no financial compensation may be awarded to athletes in exchange for their athletic talents in that particular sport.

There are questions, however, as to the validity of such agreements if a letter of intent were challenged in court. It appears that such an agreement need not be signed as a prerequisite to participation in NCAA-governed sports, though the NCAA manual does refer to the letter of intent program. The National Letter of Intent Program is actually not administered by the NCAA but rather through the College Commissioners Association (CCA). The CCA has administered this program for 30 years and has no reported lawsuits against it. However, hundreds of appeals are filed each year with respect to letters of intent, particularly when prospective athletes sign to play with a college or university and the coach who recruited them is no longer employed at the college when the athlete later enrolls in school. He or she may desires to transfer to another school.

Many letters of intent are signed by high school seniors who may not have reached the age of 18. Therefore, the legal capacity of the minor might be taken into consideration if he or she desires to void this agreement

Health Club Contracts

Most states now regulate the terms of a health club contract in some form or another. Many states have limits on the length of health club contracts. Many states cap the length of a health club contract to no more than three years. Many states also allow the member to void a health club contract within three business days of signing the contract. Due to the extremely competitive nature of health club contracts and the temptation for fraud, health club regulations often are found within a particular state’s consumer protection laws and may include a mandatory warning on the contract in bold lettering such as:

YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.

 


[1] National Association of Intercollegiate Athletics

A sample policy on amateurism and the NCAA is as follows: As a member of the NCAA, State University requires that all of its student-athletes be amateurs in their sport. You are a professional if you:

  • Are paid (in any form) or accept the promise of pay for playing in an athletics contest;
  • Sign a contract or verbally commit with an agent or a professional sports organization;
  • Ask that your name be placed on a draft list (Note: in basketball, once you become a student-athlete at an NCAA school, you may enter a professional league’s draft one time without jeopardizing your eligibility provided you are not drafted by any team in that league and you declare your intention in writing to return to college within 30 days after the draft;
  • Use your athletics skill for pay in any form (for example, TV commercials, demonstrations);
  • Play on a professional athletics team; or
  • Participate on an amateur sports team and receive any salary, incentive payment, award, gratuity, educational expenses or expense allowance (other than playing apparel, equipment and actual and necessary travel, and room and board expenses).

Though the National Collegiate Athletic Association (NCAA) is considered a nonprofit organization, its billion-dollar television contract and its rules and policies affect the sports industry in numerous ways and often present a conflict between the concepts of amateurism and professionalism.

The NCAA was originally established to address safety issues involved in the sport of football. The organization has grown to become the largest amateur organization in the United States related to the regulation of athletes. Membership in the NCAA is Divided into Division III, Division II and Division I, the largest division and the one that offers the most scholarships to athletes. Each sport has its own rules and limits the number of scholarships in a given sport. Sports such as football and basketball are characterized as “revenue” sports while soccer, gymnastics, track and field, and other sports are considered “non-revenue sports.”

Membership in the NCAA is entirely voluntary, and some colleges or universities have chosen not to become a member of this organization. However, more than 1,200 schools are now members. Sharing in revenues generated by the NCAA is similar to a shareholder distribution plan. This “sharing of the wealth” is driven by television contracts with the organization for post-season football bowl championships and the contract with network television for the NCAA Division I Men’s Basketball Tournament.

Recognizing that the professional sports industry and the minor leagues are now competitors in a sense for players, the NCAA has recently modified its rules regarding amateurism to allow a professional athlete to participate in a college or university sports program if the athlete has remaining eligibility, and the participation is in a different sport than the player’s professional sport. Thus, a 27-year-old football quarterback who played professionally as a minor league baseball player may still be able to compete as an amateur in football for a college or university. It will be interesting to see if the NCAA changes its position further on “amateurism” in the near future.

Evolution of Amateurism

An amateur athlete used to be defined as someone who participated purely for the love of the sport and did not expect compensation for athletic performance. For numerous years, the United States Olympic Committee (USOC) prevented professional athletes from participating in the Olympic Games just as the NCAA does not allow professional athletes to participate in college as amateurs within that particular sport. The USOC has modified its nonprofessional agenda, however, and actually endorses professionals to participate in its Olympic events. However, the NCAA continues to refuse to allow athletes to be paid for their services as athletes other than scholarships.

Other NCAA Contract Issues

Numerous rules and regulations surround the athlete that signs an NCAA approved letter of intent. Athletes agree to rules that regulate transferring to another institution, being randomly tested for performance-enhancing drugs, and earning a minimum number of credit hours in their studies. These and other rules are important aspects of the contractual relationship between the NCAA and the athlete. The NCAA and USOC have agreed to examine ways to ensure that talented amateur athletes who have remaining collegiate eligibility may actually earn a stipend from an Olympic national governing body such as United States Swimming and still retain amateur status.

Letter of Intent

Division I, Division II and NAIA[1] athletes are the beneficiaries of athletic scholarships (more specifically referred to as grants-in-aid). They sign an agreement with the college or university in the form of a letter of intent, which is a binding agreement between the athlete and an institution. This agreement provides that in exchange for the athlete’s services in their sport, they will have tuition, room and board, and books paid for by the institution. However, no financial compensation may be awarded to athletes in exchange for their athletic talents in that particular sport.

There are questions, however, as to the validity of such agreements if a letter of intent were challenged in court. It appears that such an agreement need not be signed as a prerequisite to participation in NCAA-governed sports, though the NCAA manual does refer to the letter of intent program. The National Letter of Intent Program is actually not administered by the NCAA but rather through the College Commissioners Association (CCA). The CCA has administered this program for 30 years and has no reported lawsuits against it. However, hundreds of appeals are filed each year with respect to letters of intent, particularly when prospective athletes sign to play with a college or university and the coach who recruited them is no longer employed at the college when the athlete later enrolls in school. He or she may desires to transfer to another school.

Many letters of intent are signed by high school seniors who may not have reached the age of 18. Therefore, the legal capacity of the minor might be taken into consideration if he or she desires to void this agreement

Health Club Contracts

Most states now regulate the terms of a health club contract in some form or another. Many states have limits on the length of health club contracts. Many states cap the length of a health club contract to no more than three years. Many states also allow the member to void a health club contract within three business days of signing the contract. Due to the extremely competitive nature of health club contracts and the temptation for fraud, health club regulations often are found within a particular state’s consumer protection laws and may include a mandatory warning on the contract in bold lettering such as:

YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.

 


[1] National Association of Intercollegiate Athletics