It's usually like an agreement with your main sponsor. A lot of guys do the contests to become higher up in their sponsor's bankroll (if that makes sense) and then usually it leads to them going on trips and entering less and less contests. Sam Hammer's a great example; he still does local and little WQS events, but he doesn't really do any major events. His agreement with Billabong is basically get shots in the magazines, and you can go pretty much wherever.
Thats basicly correct. In the begining all "free surfers" did contests it something all sponsored surfer due when coming up in the ranks untin they get to the level that they dont have to do contests anymore