Why the college basketball scandal won't get fixed until the NCAA pays athletes
— -- It is an extraordinarily sad time in college sports. Ten people were arrested Tuesday and charged with fraud and corruption after a two-year FBI investigation. A Hall of Fame coach was, as the attorney for Louisville's Rick Pitino said, "essentially fired," as was one of the most respected athletic directors in the country, Tom Jurich. A high-ranking Adidas employee was charged in a bribery scheme, as were assistant basketball coaches at Arizona, Oklahoma State, USC and Auburn.
This is certainly not the end of this scandal, as its tentacles reach far and wide. This probe could extend to high-profile agents, other programs and others in the sports apparel industry and grassroots basketball industry.
Right now, as the sky seems to be falling in college basketball, some are suggesting that things will really change going forward. Grassroots basketball is dead. Agents will no longer be able to get their hooks into players. Coaches will not be able to pay players. Now, thanks to federal law enforcement officials, college sports will be clean and moral.
While this is horribly unpleasant and far from over, I don't see meaningful change coming to college sports. The reason? Money.
The same things were said about Wall Street after the 2008 financial crisis. Things were going to change, and no longer would the big banks be allowed to do whatever they wanted and put the world economy at risk with collateralized debt obligations and credit default swaps. Yet, years later, it is back to business as usual on Wall Street.
While this ugly scandal seems to be the NCAA's worst ever, it is not. We have seen big scandals before, and as long as we maintain the current corrupt system and rules, we will be here again. We have implemented rules after each scandal to make ourselves feel better, but they don't do any good. They can't do any good. The reason? Money.
Why do you suppose we don't see such scandals in Division II or Division III sports? Money. In Divisions II and III, the salaries, revenues and expenditures are in line with the stated missions of the institutions. In Division I, no reasonable person could claim the same. Division I football and basketball are multibillion-dollar industries, paying coaches and administrators multimillion-dollar salaries while generating billions from media-rights deals and hundreds of millions from apparel deals with Adidas, Nike and Under Armour. Let's not pretend that Ed McMahon knocked on the NCAA's door and surprised the organization with a check for billions of dollars. The NCAA and its members carefully, thoughtfully and purposefully built a multibillion-dollar industry. This was no accident. It was planned.
In the movie "Jurassic Park," actor Jeff Goldblum's character had a memorable line -- "Life finds a way." In my view, the same goes for money. In college sports, money will find a way. Money will always find a way, because the NCAA and its member institutions are addicted to money and will continue to chase it. That seems beyond reasonable dispute.
That is not to say that the NCAA's corrupt system and rules are the reason that rules and laws were broken, or to excuse rule-breaking and lawbreaking. There is no legitimate excuse to break the rules or break the law. Instead, we should endeavor to change the rules to make them fair, reasonable and moral. Right now, they are none of those things. The current NCAA system and rules are largely responsible for creating the underground black-market economy for players. There are contradictions everywhere, to the point of hypocrisy, and business relationships with third parties that strain the imagination.
The NCAA could act as The Masters and Augusta National Golf Club if it wished. The Masters does not allow commercialization of its product beyond its comfort level and has rules for its media partners. Augusta National could make far more money off that property if it wished, but it finds other things more important. Not the NCAA. If your decisions reveal your priorities, the NCAA's first priority is money.
Do you believe the shoe companies will go away based upon this scandal? No way. They are partners with the NCAA and its member institutions. NCAA institutions accept hundreds of millions of dollars annually to wear apparel and shoes and use the unpaid, amateur players as billboards. There is nothing inherently wrong with these apparel deals between a company and a school. But given the NCAA's amateurism rules, it sure does create a contradiction. There is no question that NCAA schools could buy the apparel they need, but instead they choose to accept the revenue and profit from the relationship while using the players to do it. There is no way that the NCAA will adopt rules limiting the commercial opportunities of its members or its partners.
Do you believe that the NCAA can stop the influence of grassroots basketball or the AAU scene? No way. There is nothing inherently wrong with players playing basketball at camps or in summer tournaments. Players will continue to play, and tournament operators will continue to make money off the players and college recruiters who come to watch the players. If the NCAA attempted to affect the grassroots culture, it would open itself up to legal action for anticompetitive practices. In addition, there is little chance that the NCAA can stop the flow of money in the grassroots scene. There are so many 501(c)(3) nonprofits out there through which money is funneled, and that will not stop even if the government was able to catch the dumb crooks.
Do you believe that the NCAA will stop the influence of agents? No way. Because of NCAA rules that disallow a player from having an agreement with an agent, the ethical agents are on the sideline while the unethical and lesser-qualified agents have full access and open-field running to unpaid, amateur players and prospects. Unintentionally, but predictably, the NCAA's amateurism rules have helped create the black-market economy for players.
The NCAA states that it protects players from being exploited commercially. Does that ring true to anyone? The NCAA uses the players as billboards for apparel deals and uses their names and likenesses to sell the product, and to sell media-rights deals. The NCAA continues benefiting from this multibillion-dollar business, while the players get only a scholarship, and the only ones exploiting the athletes are the NCAA and the member institutions. When you use a person to make money while at the same time limiting that person from making money, you exploit. Players are certainly not mistreated, but they are exploited.
Chris Spatola, a former college coach, Army veteran and point guard at West Point, has smartly analogized the current system of amateurism to Prohibition. Prohibition did not stop people from drinking; it just drove it underground and created a black-market economy. That is exactly what the NCAA is doing with players. These players are worth a ton of money, to schools, to agents and to shoe companies. And these players are worth far more than a scholarship. In fact, a scholarship is the LEAST they are worth. Schools do not have to offer scholarships, but do. They do not have to offer stipends, but do. If they didn't, they would be hurt in the marketplace, even though there is a unilaterally imposed wage cap on athletes.
When have you ever heard of a coach being steered to an agent? When have you ever heard of bribes to get a coach to accept a job? When have you ever heard of a bribe to get an athletic director to switch schools? You don't hear such things because those people are allowed to be paid in a free market. It is an aboveboard business, and it works in an orderly fashion. There are contracts with contract remedies. That pesky free market works incredibly well and efficiently for everyone else; it is foolish to assert that it would not work just as well for college athletes. After all, these schools know exactly whom to recruit and whom to play the most minutes in the games. They know whom to pay and how much.
But in the absence of meaningful change regarding amateurism, there will be no meaningful change at all. We will all shake our heads and our fingers at the current scandal, give our full-throated speeches, and the NCAA will say "threat to integrity" and "antithetical to what college sports is about" and act righteously indignant. Then, we will all go on to the next game, and the NCAA will go on to the next big contract.
Money will find a way. In NCAA sports, it always does.
