- The NCAA and its schools enabled the mess that the basketball and football player markets have become. As more light is shed on the black market, the developing scandal could be a chance to enact sweeping changes.
NCAA president Mark Emmert called the revelations contained in three federal indictments “deeply disturbing.”
The University of Arizona—yes, the entire university (at least according to a statement)—was “appalled” to learn what the FBI has accused one of its assistant basketball coaches of doing.
Louisville basketball coach Rick Pitino said the details “came as a complete shock to me” and blamed “a few bad actors” when one indictment detailed a scheme for the Cardinals to pay $100,000 for a player who is now a freshman at Louisville.
For the next few months, the sanctimony will tumble from the email blasts of NCAA administrators expected to clean up this mess, university athletic directors caught in the middle and head coaches desperately clinging to their jobs. All will say they are disturbed, appalled and shocked by a system they have known about for years.
They are the ones, in fact, who enabled this system and profited from it. What’s interesting is they didn’t necessarily do this out of greed. Back in the middle of the last century, when the NCAA began creating and enforcing the rules that turned the college football and basketball economies into what they are today, the leaders of college sports wanted to create a level playing field. It was a noble idea that any freshman-level economics professor would have explained was an impossible fantasy from the start, but college sports wasn’t a multibillion-dollar business then. No one was getting rich. Trying to create parity by limiting athlete compensation to first tuition and then tuition, room and board didn’t really harm anyone in a meaningful way.
Then a funny thing happened. Television companies began to pay bigger and bigger money for big-time college football and basketball. Suddenly, the schools decided they could make more money without the NCAA controlling their TV rights, and they took their own member organization all the way to the Supreme Court in the early ’80s to win the right to sell their games to the highest bidder. This begat ever larger conference contracts with networks, which begat conference networks that pulled in cash for the schools one cable subscriber at a time. The NCAA, meanwhile, cashed in on the massive popularity of its men’s basketball tournament, selling its broadcast rights to CBS and Turner for billions. Money poured into the system, but the rules stayed the same. (Except for that one time when a federal judge commanded the schools to allow for a little bit more.) The best football and basketball players became quite valuable to the marketplace, but their compensation remained arbitrarily capped by a group of colluding competitors. If at this point someone had asked that 100-level Econ professor what would happen next, the answer would have come quickly.
A black market would emerge.
This isn’t unique to college sports, of course. Markets seek equilibrium between supply and demand. Any time some governing body engages in price-fixing, a shadow market forms to correct the imbalance. That’s what happened in college basketball. Since more money couldn’t go to the people with the actual playing talent, it had to go somewhere. And all manner of people—including some of the ones named in those indictments unsealed Tuesday—rushed in to fill the void. The NCAA’s rules, created for the entirely noble purpose of leveling the playing field, had the entirely unintended effect of enabling a generation of pimps.
Let’s look at the case of Auburn assistant Chuck Person. Person, a former Auburn and Indiana Pacers star, stands accused of taking bribes from an agent to steer a player to that agent. If Person is guilty of this, he is a pimp. There simply is no other word for it.
The NCAA’s rules—which are made by the schools—incentivize this behavior, and it typically only gets worse the more rules the schools make. The only way to improve the system is a massive overhaul that many of the current leaders of college sports lack the imagination to undertake. But if they are willing to try, they might be able to remedy several problems currently plaguing them.
At the end of a press conference Tuesday, Joon Kim gave out a phone number. Kim, the acting U.S. attorney for the Southern District of New York, wants coaches to snitch on one another. Has a rival been pimping players to agents? Call away. Has a shoe company funneled money to ensure a player suits up at a college that wears that company’s kicks and uniforms? Dial now.
It could get even more interesting if Kim and the FBI turn their attention to football, which is much bigger and much more lucrative than basketball. The difference is football might not be nearly as sexy. Agents aren’t as interested in high schoolers as they are in basketball because the NFL’s three-year rule gives them time to evaluate and zero in on the best prospects once they reach college. So rather than agents and executives of global conglomerates, the pimps in football are an army of small-time hustlers—sometimes parents, sometimes high school or seven-on-seven coaches, oftentimes simple hangers-on—who pimp the players to schools for pennies on the dollar relative to the players’ actual market value. The schools have tried to create rules to stop this, with mixed results.
One part of the Individual Associated With a Prospect rule now in effect in basketball and football is legitimately brilliant. The schools can’t make a rule that creates an across-the-board ban of the hiring of a recruit’s parent, high school coach or handler. They already got waxed in federal court when they tried to restrict the earnings of certain coaches, so banning people entirely was a non-starter. So they made a rule that such a person still could be hired as long as it was to a (limited, precious) on-field/court assistant role. College football coaches howled that they would no longer be able to nurture talented up-and-coming coaches. But they can. If they believe the person has so much promise, let them coach the offensive line or the secondary.
Another part of the rule, however, did more pimp-enabling. Previously, football programs would pay high school coaches to work their summer camps. They can’t do that anymore if they want to sign one of that coach’s players in a two-year period. Did schools use the camp roles to reward coaches who might funnel them recruits? Sure. But at least those coaches were beholden to the high schools and municipalities that employed them. They had a powerful incentive to not sell their players or sell access to their players. Now? Programs will slip cash to random handlers who are beholden to no one and looking to make a quick buck off the best athletes in their communities. Those people will deliver the athletes to camps. It’s not nearly as juicy as a giant shoe company bankrolling a recruitment, but it’s all part of the same problem. The money isn’t going to the people it should go to, so it’s going to find a way to go somewhere.
The fairest, most equitable solution would be to create a system that gets the money in the hands of the people with the actual skills the market values. I suggested such a system six years ago, but it remains too radical for most of the people who run college sports. For some reason, these people abhor the idea of letting the performers the market values most receive the most compensation even though that conceit governs nearly every industry in this country. They’re against capitalism for the players, but they support it wholeheartedly for themselves.
Unfortunately, that double standard is how they went from wannabe field-levelers to pimp-enablers. But since the vast majority of the people who run college sports would rather not enable people who prey on young athletes, perhaps they’ll consider a more modest proposal. I only suggested this one five years ago.
Let the players have agents. This may sound radical, but officials in several conferences have kicked around this possibility for years. College baseball players already are allowed have them. (Though the NCAA calls them “advisors.”) Simply extend that courtesy to all athletes. Chances are the agents would mostly want to sign football and basketball players, since that’s where the bulk of the money is.
This wouldn’t change much for coaches, who already deal with the equivalent of an agent for nearly every player on their rosters. It may be Mom, Dad, a coach or, as Ohio State coach Urban Meyer calls it, “a third-uncle,” but there is already someone representing the interests of each player in the coach’s ear. An agent might do the same thing, but an agent might also understand why little Johnny isn’t getting playing time and avoid haranguing the coach.
The most important reason why the schools should consider allowing agents is that it finally would give the schools some power over them. Charge them to apply to an NCAA agent registry. Give them a strict set of rules to follow. In my original column, I suggested letting them loan players money as long as the loans were done in a transparent manner and logged with the NCAA. If the schools aren’t comfortable with that, ban payments from agents to players. (The money is supposed to flow the other direction in that arrangement anyway.) No matter what rules the schools settle on for the agents, they could enforce them harshly and ensure compliance. Any agent who runs afoul would be kicked off the registry. Also, the schools could help the NCAA overcome its lack of subpoena power by requiring registered agents to submit to investigations if they want to remain on the registry. No player would risk his eligibility by dealing with an agent who wasn’t certified by the NCAA. Losing that certification would be professional suicide for an agent. That would offer a powerful incentive for the agent to follow the schools’ rules.
The current system puts agents who don’t want to break the NCAA’s rules and various state laws—yes, Virginia, there are some agents who play by the rules—at a competitive disadvantage. Bringing this process into the light would only help connect the players with people more willing to do business in a more professional manner.
Perhaps this is all too much with the news of the FBI/DOJ investigation so fresh. Perhaps it will take more charges for more coaches, more agents and more apparel company executives to spur meaningful change. But this is going to have a long tail. It’s probably going to get much, much worse. So maybe now it’s time to start seeking solutions to ensure college sports stays out of the FBI’s crosshairs in the future.
Sanctimonious statements won’t fix anything. This investigation will shine a light on the shadow market. Once it gets completely illuminated, it’s time to consider some new rules that dismantle rather than enable it.