In late September, three related federal cases were filed in the Southern District of New York stemming from a yearslong investigation into the underbelly of collegiate athletics recruiting.
So far, 10 individuals have been charged, and indications are that more indictments could follow. The cases may be narrowly focused on the bad acts of a few individuals, but the potential impact is far more wide-reaching. The NCAA’s system of amateurism is in the crosshairs.
One of the cases involves multiple counts of bribery and fraud against three assistant college basketball coaches and two other individuals.
The coaches, Lamont Evans of Oklahoma State, Emanuel Richardson of Arizona and Tony Bland of USC, are accused of taking bribes from sports marketing executive Christian Dawkins and investment adviser Munish Sood in order to direct players to their respective businesses once they reach the NBA.
A similar case involves another assistant coach, Chuck Person of Auburn, who is accused of taking bribes to direct players to a clothing service executive named Rashan Michel.
Perhaps the most publicized case, however, has ensnarled Adidas director of global marketing, James Gatto, among others, and the University of Louisville.
The allegations contend that Gatto and other Adidas executives channeled cash payments to families of prospective student-athletes in order to induce them to attend Adidas schools. Louisville, of course, is sponsored by Adidas.
While not specifically named in the complaint, the specific allegations relate to Brian Bowen, a top recruit for the 2017-2018 school year, who committed to Louisville in the spring.
It is alleged that executives arranged to pay Bowen’s family $100,000 in exchange for Bowen’s commitment to Louisville. The charges include claims of wire fraud and money laundering related to concealed bribe payments, which rendered the receiving party ineligible to compete in NCAA athletics.
The fallout at Louisville has been the most immediate. Bowen has been suspended indefinitely, and the scandal has cost Louisville basketball coach Rick Pitino and athletic director Tom Jurich their jobs.
Pitino has already gone on the offensive, claiming that he had no knowledge of the scheme, despite reports that he was “Coach-2” identified in the complaint and that he had direct contact with Gatto regarding payments to Bowen.
Pitino has already sued Adidas for reputational damage and emotional distress and will almost assuredly challenge Louisville for terminating his contract. He stands to gain upwards of $44 million if the termination was not for cause.
The scope and fallout of the investigation remains to be seen, but it is worth pondering whether the indictments would have even occurred if the NCAA’s much-maligned amateurism rules did not exist.
Some of the crimes alleged, such as wire fraud and money laundering, would be deemed illegal no matter the context. However, if the NCAA system did not necessitate concealment of payments, it is likely that the transactions alleged would have taken place above board.
The NCAA rules prohibit athlete compensation, including payment from shoes companies such as Adidas. At the same time, however, college coaches have received million-dollar endorsement deals from shoe companies for decades. Schools also have agreements with apparel companies, with UCLA’s 15-year, $280 million contract with Under Armour being the largest among public universities.
None of the brand-to-coach or brand-to-school contracts are considered bribes, but because of NCAA bylaws, the $100,000 offered to Bowen’s family to attend Louisville was. The alleged wrong boils down to paying the student-athlete.
The question then becomes: If the NCAA bylaws did not exist, would there even be a crime?
In a free market system, the alleged payment by Adidas would be akin to a corporate signing bonus. Student-athletes would be able to market themselves and obtain the best deal as dictated by the market.
The payment could be legitimized and would not require cash payments or laundering money. A free market would also foster the inherent benefit of weeding out unscrupulous actors through transparency and regulation.
It’s fair to question whether a free market system would cause the NCAA’s system to crumble, but also whether that would be a bad thing is also to be considered. Opponents of student-athlete compensation argue that they already receive significant benefits in the form of education and other enrichments.
They also contend that a free market system would not be viable except for a select few athletic departments that operate at a surplus.
That last argument, however, is undermined by the recent indictments. The payers are not the schools themselves, but rather, their corporate partners. It is unlikely that student-athlete payments would ever come from institutions general coffers anyway.
In a news conference after the indictments were announced, acting U.S. Attorney Joon H. Kim made spirited remarks painting a picture of amateurism under siege and higher learning institutions as the victims.
Indeed, if the allegations prove true, amateurism rules have been brazenly disregarded, arguably by a small group of rogue actors.
At the same time, though, the NCAA’s amateurism strictures are really the basis for the claims in the first place. Some, including Joe Nocera, author of the book “Indentured: The Inside Story of the Rebellion Against the NCAA,” have argued that the FBI is doing nothing more than enforcing the NCAA’s rules, which the athletic organization have been unable to police on their own.
As the investigation broadens and the cases unfold, the impact of these indictments could result in an array of outcomes. It is certainly possible that the cases will lead to a cleaned up system, and the preservation of amateurism.
However, the cases, which are posited as a fight to preserve amateurism at the collegiate level, could actually have the opposite impact. If the cases do not result in settlement, the impending discovery and trials could expose the pervasiveness of the problem. If tried and no wrongdoing is found, there would be little to dissuade similar conduct in the future.
This could potentially provide further ammunition for plaintiffs and lawyers who are already challenging the NCAA’s bylaws on antitrust grounds.
If it can be proven that there is a lucrative “black market” for NCAA athletics in addition to the billion-dollar industry that already exists, the system as we know it could be changed forever.