NFLPA Financial Advisors

NCAA Presentation
Las Vegas, Nevada

Marcus M. Wilson
Assistant Director of Agent, Gambling
and Amateurism Activities

May 7, 2009
 What does AGA do?

The agent, gambling and amateurism activities staff duties

include investigation of potential rules violations with respect
to agent, gambling and postenrollment amateurism
legislation, and providing education and creating awareness
regarding NCAA legislation on agents, gambling and
postenrollment amateurism issues to student-athletes,
athletics administrators and other relevant parties.
 NCAA Legislation

NCAA 2.9: The Principle of Amateurism

“…Student participation in intercollegiate athletics is an

avocation and student-athletes 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 S-A:
• 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;
 What is an Amateur?

Continued:
• 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 - Agreements

NCAA Bylaw 12.3.1

“Student-athlete is ineligible if he/she has an oral or written

agreement with an agent.”
NCAA Agent Legislation - Agreements

NCAA Bylaw 12.3.1.1

It is not permissible for a student-athlete or prospective student-

athlete to enter into an agreement for future representation,
even if the representation will occur after eligibility has
expired.
 NCAA Agent Legislation - Benefits

NCAA Bylaw 12.3.1.2

A student-athlete or prospective student-athlete (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 – Advisors
and Financial Advisors
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.
Note: On February 12, 2009, in a case entitled Oliver v. NCAA, an Ohio trial court judge
held that Bylaw 12.3.2.1 was invalid under Ohio law and as a result a student-athlete
was not ineligible if an attorney is present during discussions of a contract offer with
a professional team. The NCAA intends to appeal the decision in the Oliver case.
 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

However, 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 application of
NCAA legislation if he or she acts as an agent.”
 Procedure: Investigation and
Reinstatement

• How does the enforcement and student-athlete

reinstatement process work?

• Where does the Enforcement staff get its information?

• How does the NCAA work with the NFLPA and its Financial
Advisors program?
NCAA Student-Athlete Reinstatement
Directive
Divisions I and II
• Agent violations are considered more serious than general extra-
benefit violations of Bylaws 16 (Awards, Benefits and Expenses for
Enrolled Student-Athletes) or 12.1.1.1.6 (Preferential Treatment,
Benefits or Services); therefore, the monetary guidelines should be
more stringent than the extra-benefit 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 student-athlete’s awareness of the person’s agent status; and
• The student-athlete’s involvement in obtaining the benefit.
(December 2000)
DISABILITY INSURANCE
 Disability Insurance

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.
 Disability Insurance
Continued:
• 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 Policies

Catastrophic Injury Insurance Program.

The NCAA sponsors this program for student-athletes that

are catastrophically injured while participating in a covered
intercollegiate athletics activity.
 NCAA Disability Insurance Policies
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.
 Scenario #1

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.
 Scenario #1
Continued:
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.
Question: Is the conduct of the advisor permissible under NCAA rules?
 Scenario #1

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.
 Scenario #2

QUESTION:
Can a financial advisor or agent provide information
to a student-athlete regarding lending institutions
that may be interested in providing financing for
insurance against a disabling injury that would
prevent the student-athlete from pursuing a chosen
career?
 Scenario #2

ANSWER:
Yes. An agent, attorney or financial advisor may
provide information to the student-athlete, but the
agent attorney or financial advisor cannot be
involved in any way in making the arrangements to
secure a loan or negotiating the terms of the
financing.
 Scenario #3
During the summer session and prior to his initial full-time enrollment at the
NCAA college, Brandon, a football student-athlete 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.
Question: Are the actions of the financial advisor in assisting Brandon
with securing a loan for disability insurance permissible pursuant to
NCAA legislation?
 Scenario #3

ANSWER:
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
deferred-payment 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.
 Scenario #4

QUESTION:
Can a certified financial advisor who also is a loan
officer at an established, accredited commercial
lending institution be involved in providing a loan to a
student-athlete for the purpose of financing disability
insurance?
 Scenario #4

ANSWER:
Yes. It is a permissible for a certified financial advisor who
acts in a capacity as a loan officer at the accredited
commercial lending institution to provide a loan, as long as
the terms are commensurate with the going rate in the
industry.
However, a financial advisor who also is a loan officer
cannot assist the student-athlete in negotiating better terms
or provide the loan on any below-market basis.
QUESTIONS?
 NCAA Resources

Agent Information Brochure Disability Insurance Brochure

 NCAA Resources

AGA Educational Documents NCAA Web site

 Contact

Marcus M. Wilson
NCAA Agent, Gambling and Amateurism
Activities

P.O. Box 6222

Indianapolis, Indiana 46206
317/917-6222

mwilson@ncaa.org