Corporate & Securities Law

College Athlete Drives a Hard Bargain Over Letter of Intent

Seth Davis (Sports Illustrated) has an interesting column on the intersection of two issues I hold near and dear: contracts and college basketball. For those unfamiliar, college recruits in football, basketball and some other sports sign National Letters of Intent (NLI) committing themselves to spend at least one full year at the college. The NLI gives the school the option of allowing a player who wishes to leave to do so without penalty. The default, however, is that the school does not release the player. The student-athlete can still transfer of course, but must incur the penalty of sitting out a full year at his next school plus losing a year of eligibility. In these days of the coaching carousel, one reason that players commonly switch schools is because a coach is fired or leaves for greener pastures. However, Davis reports that the NLI explicitly states that a coaching change is not grounds for nullifying the agreement.

Which brings us to DeMarcus Cousins, a heavily recruited basketball prep star who wants to stay near home and play for University of Alabama-Birmingham (UAB). Here’s the contract twist. Cousins has choices further up the college basketball food chain and is going to UAB largely because of the coach, Mike Davis (formerly of Indiana University). As such, Cousins figured out that he wants some insurance that UAB will release him without penalty if Davis leaves and wants language representing as much in the NLI. Here’s another twist. Davis may have made a promise to Cousins to do exactly that:

Part of the reason Cousins’ situation is so sticky is that it appears Mike Davis made a promise on which he wasn’t prepared to deliver. Hughley told me that when Cousins committed to UAB last March, Davis assured them that the school would promise in writing that it would grant Cousins his release if Davis left. Either Davis foolishly made the deal without clearing it with his bosses, or his bosses have changed their minds, because though athletic director Brian Mackin is prepared to give Cousins a verbal promise, there does not appear to be any kind of written agreement forthcoming.

Assuming Davis has apparent or actual authority to make such a promise on behalf of UAB, this puts the school in a tough spot from a practical if not legal perspective. I’m guessing that UAB caves here. Cousins is a once-per-decade recruit for a mid-major program and has plenty of other options. I’m also not sure what precedential harm there is in including the language for him and playing hardball with subsequent recruits. Further, one might think that mid-majors would be net importers of players seeking releases from top programs under a rule that allowed top players to negotiate releases without having to sit out.  In the meantime, it looks like the early signing period has come and gone without an NLI from Cousins.

Full post as published by Truth on the Market on November 24, 2008 (boomark / email).