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Monday, August 13, 2012
 
Why Missy Franklin retains her NCAA eligibility: The Operation Gold Exception

Over the past several weeks there has been a considerable amount of attention given to the United States Olympic Committee’s “Operation Gold” program. This program was created to provide additional incentive for our Olympic athletes by granting awards -- $25,000 to gold medal award winners, $15,000 to silver medalists and $10,000 for those who earn bronze medals. There is nothing unique about the efforts by the United States as a slew of other countries provide similar, if not larger,financial rewards for their athletes.

What is unique in this country is the NCAA, its self-created definition of “amateurism,” "initial eligibility," and its relationship to the Operation Gold program. Article 12 in the2011-12 NCAA’s Division 1 Manual defines the scope of amateurism and this is where one can find a unique exception for Olympic athletes. In Article 12.1.2 the NCAA defines a multitude of ways in which an individual can lose amateur status—including using their skill for pay, signing a professional contract,entering into a professional draft (a few exceptions), or signing with an agent.

Furthermore, the prohibited forms of pay are outlined, ad nauseum, in Article 12.1.2.1 which includes payment for performance. Specifically, Bylaw 12.1.2.1.5 “Payment Based on Performance” defines the following type of payment as a trigger for losing one’s amateur status:

“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.”
However, tucked into page 64 of this 426 page manual are two rules that are now critically important to a slew of Olympic athletes as they carve out exceptions. Specifically, 12.1.2.1.4.3.2 “Expenses/Benefits Related to Olympic Games” holds that:

“It is permissible for members of an Olympic team to receive all nonmonetary benefits and awards provided to members of an Olympic team beyond actual and necessary expenses, including entertainment, equipment, clothing, long distance telephone service, Internet access, and any other item or service for which it can be demonstrated that the same benefit is available to all members of that nation’s Olympic team or the specific sport Olympic team in question.”
Additionally, 12.1.2.1.4.3.3 “Operation Gold Grant” holds that:

“An individual(prospective student-athlete or student-athlete) may accept funds that are administered by the U.S. Olympic Committee pursuant to its Operation Gold program.”
The end result? Olympic athletes who received a significant amount of money from Operation Gold are allowed, under NCAA rules,to maintain their college eligibility.

Note, however,that in 2004 the courts, in the case of Bloom v. National Collegiate Athletic Ass'n, 93 P.3d 621 (Colo.App. 2004), made it very clearly that an individual’s NCAA amateurism status would be lost if they entered into any endorsement or marketing deals. [Bloom was a college football player at the University of Colorado and also an Olympic skier. Bloom was paid to participate in endorsements in connection with his professional skiing career and the NCAA subsequently held Bloom to be ineligible for the final two years of his college football career. The courts upheld the determination, finding it impossible to determine which endorsement and media activities were, in fact, unrelated to his athletic ability or prestige as Bloom contended.]
Thus, USA swimming star Missy Franklin will take home $100,000 for each individual gold ($25,000 from the US Olympic Committee and $75,000 from USA Swimming) in the 100- and 200-meter backstroke events. And, per NCAA rules, these payments are allowed and do not cause her to lose her amateur status. Surprisingly, and in my mind this speaks to the arbitrary nature of some of the NCAA’s rules, Franklin is not allowed to receive a $50,000 bonus from USA Swimming for setting the world record in the 200-meter backstroke. Nor could she receive a free pair of shoes from Nike or a cup of coffee from a college coach recruiting her.

Got it?

[Editor’s note:Missy, Boston College has a wonderful swimming team……]





9 Comments:

Great post, Warren. Additionally, the NCAA provides an exception for the full-time enrollment requirement for Olympic participation (and other competitions detailed below). We see this come up in the Yeo case that I discuss in an article I drafted for UVA back in 2005 on disappointment lawsuits ("Splinters from the Bench"...http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1324880).

14.1.8.3.3 Olympic Games, Pan American Games, World Championships, World Cup, World
University Games or World Youth Championships—Competition.

The Progress-Toward-Degree Waivers Committee (see Bylaw 21.7.5.1.3.2) may waive the minimum full-time enrollment requirement for any participant in the Olympic Games, Pan American Games, World Championships, World Cup, World University Games or World Youth Championships (including junior levels of such events) who, because of such participation, may lose eligibility for practice and competition in any sports.

Blogger Tim Epstein -- 8/14/2012 10:38 AM  


Thanks Tim. Fascinating stuff; lots of chatter on this topic. And some are asking about the comparison to Enes Katner as well....

Blogger Warren K. Zola -- 8/14/2012 10:52 AM  


Thanks, Warren. To be clear as to my client, Enes, he never received cash payments that could not be reconciled with NCAA-permissible expenses ("actual and necessary") despite reports to the contrary. Fenerbahce actually owed the Kanters money for reimbursement of permissible expenses over the three years that Enes played with the Turkish club. The NCAA produced an overage in money based on the following:

1) The NCAA would not look at monies owed versus received over Enes' three years with Fenerbahce. The NCAA would only look at each individual year, so if Fenerbahce owed the Kanters $50K in food/housing, etc., from the first year, that was not looked in totality with the third year where reimbursement from the prior two years was considered. In other words, Enes was only found to have an overage in his final year with Fenerbahce. The Club owed the Kanters money from years one and two.

2) The NCAA used the national statistics for Turkey on valuation of the expenses. I used an Economist Intelligence Unit Report and Numbeo to get cost of living in the Kadikoy District in Istanbul. National statistics takes into account sheep herders on the border with Iraq. So, obviously, the NCAA's numbers were severely deflated.

3) The NCAA did not allow us to claim educational expenses since Fenerbahce gave money to Dr. Kanter to pay for tutors, etc. The NCAA only allows expenses on education if the club pays the educational provider directly.

4) The NCAA would only allow expenses to be claimed for the basketball season itself, no preseason/training.

Thus, the unfortunate case of Enes, son of a RN and a university dean/professor, who just wanted to play college ball in the US.

Blogger Tim Epstein -- 8/14/2012 12:11 PM  


Great post, Warren. Isn't all of this consistent with the purpose and intent of the Amateur Sports Act? The NCAA cannot stand in the way of the USOC's exclusive authority to administer the Olympic program.

Blogger Dionne Koller -- 8/14/2012 2:14 PM  


Thanks Dionne. Unfortunately, I truly have lost any sense of predicting what rulings emanate from the NCAA. Every time they do something reasonable, it's of great relief but still a surprise.

Blogger Warren K. Zola -- 8/14/2012 10:38 PM  


Dionne - certainly the NCAA should respect the authority of the USOC to administer the Olympic program. However, the NCAA is well within its rights to tell potential student-athletes (PSAs) and current student-athletes (SAs) that they cannot accept any monies based on performance, Olympics or not. The NCAA consciously and voluntarily carved out this exception.

Blogger Tim Epstein -- 8/15/2012 10:59 AM  


Jeremy Bloom = can't take endorsement income, turned pro and gave up college football.

Tom Zbikowski = could take prize money for boxing match at MSG, remained eligible in football.

Missy Franklin = can take prize money from USOC for medals, but not her NGG, US Swimming

I want to hear someone explain the logic behind this reasoning once and for all.

Anonymous Anonymous -- 8/16/2012 7:58 AM  


I know it has been awhile but I have a random question...Sam Green is a 9 year old football player who was recently on the cover of a Wheaties box. Is she never allowed to play in the NCAA because of this?

Blogger MIRK -- 9/22/2013 6:25 PM  


I know it has been awhile but I have a random question...Sam Green is a 9 year old football player who was recently on the cover of a Wheaties box. Is she never allowed to play in the NCAA because of this?

Blogger MIRK -- 9/22/2013 6:26 PM  


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