Forget Bribes, the Real NCAA Crime Is Exploiting Athletes

The FBI busted four college basketball coaches for “bribing” prospects with cash and endorsements. That's not illegal in a normal world where people are paid for their labor.


Photo Illustration by Elizabeth Brockway/The Daily Beast

Andy Schwarz was having trouble formulating his thoughts.

An antitrust economist with a subspecialty in sports economics, he’d spent the last couple of hours chewing over the news that ten individuals, including four men’s college basketball assistant coaches from prominent programs, representatives from apparel companies, business managers had been arrested on Monday, charged with bribery, fraud, and corruption.

According to investigators, money had been paid under the table to both coaches and the families of high school players in exchange for funneling those top recruits to both schools and the apparel companies, a black-market economy shot through with bag men, fixers and grifters that has operated alongside college sports for decades.

“It's hard for me to fathom that this is what got the Department of Justice outraged,” Schwarz, who consulted for the athlete plaintiffs in O’Bannon v. NCAA, a class action lawsuit challenging the NCAA’s rules barring athlete compensation, said when reached by phone. “It's the symptom, not the cause.”

The “cause” is amateurism, the bedrock of the NCAA’s rulebook and one that places strict limit on the amount of compensation that its workers, or “student-athletes,” receive. Now, despite the billions the NCAA scoops up in broadcast rights, no student-athlete gets a cut of that healthy pie, save for a scholarship. Meanwhile, the salaries paid to college coaches continues to dramatically escalate, making many of them the highest-paid employees in the state’ and the schools themselves dole out millions for Kubla Khan-esque facilities.

And yet, in a statement, Acting Manhattan U.S. Attorney Joon H. Kim came down firmly on the side of both the NCAA and amateurism itself. He hammered away at the defendants, who he says, see athletes as “little more than opportunities to enrich themselves,” though Kim somehow fails to notice that he’s come up with a fairly accurate description of the NCAA.

“The defendants’ alleged criminal conduct not only sullied the spirit of amateur athletics,” Kim’s  statement continues, waxing nostalgic for a realm of athletic purity that never existed to begin with, “but showed contempt for the thousands of players and coaches who follow the rules, and play the game the right way.”

Spirits may have been sullied, but while the 200-page charging documents clearly delineate all of the alleged secret meetings in hotel rooms, furtive negotiations, and attempts to conceal where the money was both coming from and going, it’s worth asking what the actual crime is here. Because according to the Southern District of New York, it’s not the exploitation of labor and a system that amounts to little more than indentured servitude.

The colleges themselves are seen as the injured party here, “but the idea that Louisville (or any of them) was harmed is laughable,” Schwarz said via a follow up message. (It has been speculated that Louisville is one of the unnamed schools who profited from the bribes. Local reporters have pointed to a quote from men’s basketball head coach Rick Pitino in which he expressed shock that a prized recruit who was cited by name in the charging documents and did receive $100,000 went to Louisville despite minimal effort to recruit him.)

But imagine, if you will, that the NCAA’s rules forbidding athletes from earning a reasonable salary were eliminated entirely, Schwarz posited. Then the alleged crimes would amount to nothing more than a standard business practice: corporate headhunting.

Beyond the covert nature of the alleged activity, what the coaches and various representatives were  doing was matching talent and employers, and receiving a commission for doing so, like, say, placing a highly touted hedge fund manager with a top firm. And were the NCAA treated like any other company, all of this would necessarily be done out in the open.

As long as the status-quo is kept in place, “it's the FBI and the Department of Justice trying to enforce NCAA rules against commerce—anti-competitive rules that treat commerce as if it is a crime,” said Schwarz.

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That sentiment was echoed by Joe Nocera, the author of Indentured: The Inside Story of the Rebellion Against the NCAA. At Business Insider, he plaintively asks why the FBI is serving as the law enforcement arm of the NCAA, and if, without amateurism, the federal government would consider it a crime at all. Nocera further noted that college coaches have been paid by shoe companies for years and agreed to marketing deals with various universities, all of which was seen as standard-brand deal-making and not criminal activity.

So in this case, if an assistant or two lined his pockets after getting talent to sign up and then encouraged said talent to deal with a shoe company, why should it be treated as anything more than “a payment for successful matchmaking?" wondered Schwarz.

Unfortunately, “the NCAA doesn't let schools directly recruit athletes with the normal tools of economics, like paying someone….” he continued. “As a result, it's a breeding ground for what people think of as scandalous conduct.”

Without the NCAA rules, then potentially a $100,000 payment to a high school kid’s family if he eventually wore Adidas would not be deemed a “bribe”, Schwarz speculated. Rather, in a world without amateurism it would be “a signing bonus, and that all comes from NCAA rules and propaganda.”

Make no mistake, today’s announcement is definitely being treated as a major scandal, and one whose tentacles may ensnare other schools, per Yahoo’s Dan Wetzel, once the NCAA starts sinking its teeth into the “treasure map,” as he described it, left by federal investigators,

Still, prick your average college sports fan and ask him or her to delineate what the actual wrongdoing is here, and the response they normally have is, "it's wrong to pay a college athlete."

But why? Schwarz asked. The most common answer—beyond the NCAA's groaning insistence that the presence of money will forevermore corrupt the athletes and their athletic programs, which, given today's news, scans as grimly ironic at best—is because the NCAA says it must be so.

Schwarz has a solution: He is the co-founder of the Historical Basketball League a proposed professional league that would allow both high school and college basketball players to get paid prior to and while attending Historically Black Colleges and Universities (HBCUs), schools that have been drained of athletic talent as the NCAA has grown into an economic powerhouse and de-facto cartel.

The HB League’s goal, as he told VICE Sports, is to create real alternative to the NCAA. HBCU’s would join up with the HB League, ditch the NCAA altogether, and students would  still be provided a path to a pro career. What’s more, they could continue to receive an education—and, considering the sham classes that dot major programs, possibly a better one—while earning a living, both from the schools themselves, and from sneaker companies and other corporate clients who wanted to market their name and game.

Though he’s amassed backers and potential corporate partners, the HB League is still just an idea, and no HBCUs have signed on. Today’s revelations, though, point to why Schwarz and his partners feel a viable HB League is so needed.

“We want to bring all this conduct not just out in the open, but have it be contractual,” he said.

Like Prohibition, removing the so-called illegal behavior would wipe away an entire class of criminals, meaning no more e stacks of cash stuffed in envelopes and handed over in a darkened alley, and no need for the Federal government to spend money and man-hours doing the NCAA’s dirty work.

After all, he said, “It's the price fixing that is the underlying foundational sin of college sports.”