Nick is to withdraw from contest (7)
I believe the answer is:
scratch
'nick' is the definition.
(I've seen this before)
I don't understand how the remainder of the clue works.
Can you help me to learn more?
(Other definitions for scratch that I've seen before include "haphazard a team?" , "cancel > test > money" , "Slight cut" , "Receiving no allowance < , ready" , "Pull out of match" .)