Athletics Veritas is a weekly series aimed at helping higher education executives, faculty, and other stakeholders stay tuned in on trending national issues impacting college athletics, especially NCAA Division I. Athletics Veritas is created by senior DI athletic administrators around the nation.
Term-In-Ology: Promise of Pay
As the NCAA membership and general public continue to digest the NCAA’s draft Name-Image-Likeness (NIL) proposal and its concurrent revamping of NCAA amateurism rules, let’s take a look at one short clause within the NCAA “amateur status” definition: “promise of pay.”
Per Division I Bylaw 12.1.2 (amateur status), an individual loses amateur status and thus shall not be eligible for intercollegiate competition in a particular sport if the individual:
Uses his or her athletics skill (directly or indirectly) for pay in any form in that sport;
Accepts a promise of pay even if such pay is to be received following completion of intercollegiate athletics participation;
Signs a contract or commitment of any kind to play professional athletics, regardless of its legal enforceability or any consideration received
Receives, directly or indirectly, a salary, reimbursement of expenses or any other form of financial assistance from a professional sports organization based on athletics skill or participation, except as permitted by NCAA rules and regulations;
Competes on any professional athletics team, even if no pay or remuneration for expenses was received, except as permitted;
After initial full-time collegiate enrollment, enters into a professional draft; or
Enters into an agreement with an agent.
Although the above “amateur status” rule will largely stay intact even if the NIL draft proposal is adopted in January, the promise of pay concept is a dynamic that raises concerns if it bleeds over to the new permissive NIL frontier. That is, there is potential for legitimate NIL transactions being sullied by impermissible, non-disclosed side-deals to provide student-athletes a financial windfall in exchange for nothing aside from their commitment to play and perform in their sport for their Division I school, which is antithetical to the amateur status principle.
For example, if the draft NIL proposal is adopted, a university booster that runs a popular local restaurant could execute an above-board, NIL endorsement deal at fair-market value (FMV) with a popular student-athlete currently enrolled at a Division I institution. On its face, there is nothing of concern. However, that same booster having closer access to the student-athlete in question presents fertile ground for malfeasance. The same booster could augment the legitimate NIL deal with the promise of pay purely because of the student-athlete’s past, present, or future athletic performance. Consternation remains high for the NCAA membership on this nuance.
Here’s how a troublesome scenario could play out. A booster makes promises of pay during a prospect’s recruitment, and once the prospect signs and enrolls, the booster uses the veil of a permissible NIL transaction with the student-athlete to actually fulfill those financial promises and, on top of the recruiting inducement, transfers additional cash beyond the FMV of the NIL deal.
Promises of pay by boosters and other third parties will be a flashpoint in and around NIL transactions with student-athletes -- not only when the promises of pay are actually made, but also when the promises of pay never materialize.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
