The compliance corner answers questions concerning the governance of intercollegiate athletics and its impact on our athletics department. Have a question? Please send it to inside@hokiesports.com and we’ll answer it in upcoming issues.
Now, here are a couple of questions that we’ve received from Tech alums and fans over the past few months, with responses from Tim Parker, Associate AD for Compliance:
Q: I know that David Wilson decided to give up his senior season and make himself available for the NFL Draft, but if he had decided to come back, couldn’t he have gotten insurance to protect himself in the event of injury? Thanks, Scotty in Fredericksburg, Va.
TP: “Yes, David could have taken out a policy through the NCAA’s Exceptional Student-Athlete Disability Insurance Program to protect himself and his potential future earnings against the possibility of a career-ending injury. In fact, David had already completed the paperwork, applied, and secured a $3 million policy, had he remained. Many star collegiate football and men’s basketball players use this program, and it makes sense.
“The program offers up to $5 million in insurance coverage, and access to low-interest loans to pay the premiums. The amount of coverage a student-athlete can purchase depends on his draft projection. Only student-athletes with remaining college eligibility who are expected to be taken in the first three rounds in football or hockey, and the first round in basketball or baseball qualify for the program. A top-10 pick may qualify for as large as a $5 million policy; a projected third-round NFL pick, meanwhile, might get $500,000 in coverage.
“Premiums for such policies are costly – $20,000 to $30,000 a year for the high-end coverage, $5,000 to $8,000 on the low end. To pay for it, the NCAA offers a loan program at 1.5 percent above prime, although balances must be repaid regardless of when, or whether, a player gets drafted. In many cases, a prospective draftee will simply ask – during the process of interviewing agents – that his agent repay the cost of the premium, as part of the agent-player agreement.
“It is important to remember that the insurance only pays out in the case of a career-ending injury. If a student-athlete hurts himself and comes back, but isn’t the same player he was before, then he wouldn’t receive the insurance payout. So for underclassmen projected as high draftees, there are many considerations when it comes to the purchase of disability insurance.”
Q: A head coach pays a staff member out of his own pocket and the NCAA deems that a secondary violation?? The NCAA regulates supplemental pay for staff members? Seems like a form of communism to me. I thought Mark Richt’s gesture was nice myself. Thanks, Brent in Blacksburg.
TP: “For those who don’t know, the Georgia football coach paid money out of his own pocket to assistant coaches and certain other staff members because a campus-wide spending freeze prevented the athletics department from increasing those individuals’ salaries.
“And while his intentions may have been admirable, Richt violated NCAA Bylaw 11.3.2.2, which prohibits an outside source from paying or regularly supplementing an athletics department staff member’s annual salary and from arranging to supplement that salary for unspecified achievement. It would be permissible for an outside source to donate funds to the institution to be used as determined by the institution, and it would be permissible for the institution, at its sole discretion, to use such funds to pay or supplement a staff member’s salary. But it’s not permissible for a head coach to supplement the staff member’s salary directly.
“Richt's sanctions from the NCAA weren't too severe – Georgia was instructed to issue him a letter of admonishment, and he must receive some additional rules education from the compliance staff.”
