With all the recent news on signing bonuses and possible transfers in the world of collegiate basketball, this begs the question: what does the law have to say about it?

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A lot, at least according to Republic Act No. 10676 or the Student-Athletes Protection Act (SAPA).

 

Signing Bonuses: Legal?

 

If a student-athlete is given or promised an amount of money — say P750,000.00 — to play for a school, is that allowed? Are signing bonuses legal?

 

Probably not. The SAPA enumerates the allowable benefits and incentives that schools can grant deserving student-athletes. These are:

1. Tuition and other school fees, including books and learning materials,

2. Full board and lodging,

3. School and athletic uniforms, including supplies, equipment, and paraphernalia,

4. A reasonable regular monthly living allowance, the amount of which must be set and standardized by the relevant athletic school association,

5. Medical examinations, medical services, life and medical insurance, and

6. Other reasonable and similar benefits that would enhance the student-athlete’s academic and athletic performance.

 

A P750,000.00 signing bonus to play for a school arguably does not fall under the allowable benefits under the SAPA.

 

It is not a reasonable benefit that would enhance the student-athlete’s performance. The key word here is reasonable. A P750,000.00 signing bonus is at par or even more than the usual signing bonuses of executives of multinationals. It’s far from reasonable for student-athletes.

 

Yes, student-athletes can commercialize their own name, image, and likeness, but this pertains to student-athletes cashing in on their personal brands and popularity through endorsement deals, not through schools handing them money in exchange for a signed scholarship contract.

 

Of course, it can be argued that the “bonus” will be used for tuition, accommodations, and uniforms, but let’s be real. These bonuses are over and above set recruitment packages that already include tuition, accommodation, and uniforms.

 

Say the P750,000.00 was an upfront payment of monthly allowances for a year, will that make it legal? It will still not fall under reasonable regular or monthly living allowances allowed by the SAPA. The numbers won’t lie either. That’s P62,500 a month! That’s even higher than the average salary of first year associate in a Makati law firm.

 

Again, we hope athletic associations like the NCAA and the UAAP set the amount of these allowances; if they have already done so, then at least make it public for the sake of transparency and accountability.

 

Under the SAPA, schools shouldn’t even offer student-athletes or their immediate family members any benefits or incentives beyond what’s listed in the law.

 

Transfers and Residency Rules

 

The SAPA also limits the discretion of athletic associations in terms of setting maximum years for residency.

 

For student-athletes transferring from one college or university to another, athletic associations can only set a one-year residency period before a student-athlete can play for his or her new school. These apply to transfers by a student-athlete from one athletic association to another. So, the UAAP may validly set a one-year residency period for a transferee from, say, San Beda to the University of the Philippines.

 

For high school graduates enrolling in a college or university, the SAPA prohibits any residency requirement — even if the high school graduate moves to a different affiliated university. Hence, a Ateneo High School graduate can immediately play for University of Santo Tomas if he chooses to suit up for the Tigers instead of the Blue Eagles.

Schools can’t impose sanctions on its student-athletes who decide to transfer. The SAPA explicitly prohibits schools from refusing or delaying the release of grades and school records to possibly stifle student-athlete transfers. It also prohibits schools from requiring the payment of tuition and other fees covered by granted scholarships.

 

As an aside, the SAPA is silent on whether an athletic association may decrease the number of years a transferee-player is eligible to play.

 

Violations and Penalties

 

For violating the rules on incentives and transfers, schools, athletic associations, school officials, athletic directors, coaches, members of the coaching staff, administrators, and even alumni may be held liable under the law.

Complaints for the violation of the SAPA can be filed by student-athletes, his/her parents, member schools or even their alumni. So, theoretically, an alumnus of a school aggrieved by the loss of its star player because of a signing bonus offered by another school, may file a written complaint.

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In the same vein, a student whose transfer is being frustrated by the delayed release of her grades may likewise file a complaint. Complaints must be filed with the relevant athletic association (like the NCAA or UAAP), but if there is reason to believe that the athletic association will not act on the complaint, it can be filed directly with the DepEd or the CHED.

 

If held liable by the DepEd or CHED, schools face suspensions and fines ranging from P100,000.00 to P1,000,000.00. Athletic associations who knowingly permit or fail to prevent such violations face fines between P100,000.00 and P1,000,000.00.

 

There have been no news or public information on whether the DepEd or the CHED has sanctioned anybody since the SAPA was passed in 2015.

 

Mickey Ingles is a partner of ILC Law. This post has been previously published on Spin.ph and Batas Sportiva.

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