How the FBI’s corruption inquiry is undressing the myth of amateurism

which price-fix the cost of a college athlete at the level of an athletic scholarship, its unclear if the FBI would have a case against these coaches at all

Jack Moore: By criminalizing violations in college sports, the US Department of Justice will make it so that it is not just the NCAA who runs the market but the state as well

A bombshell was dropped on the college basketball world this week as an FBI probe into the seedy underbelly of the sport has resulted in the arrest of 10 men, including four high-level assistant coaches under charges of bribery conspiracy, solicitation of bribes, honest services fraud conspiracy, honest service fraud, conspiracy to commit wire fraud and Travel Act conspiracy.

That laundry list of charges is impressive, but for those with any experience in how the world of college sports really works, it should come as no surprise. Under-the-table cash contributions to entice players to come play college sports has been a reality of the game ever since its inception. It was true in the 1980s, when Southern Methodist University earned the NCAAs death penalty because it failed to properly cover up its payments to 21 different athletes. It was true in the 1940s, when American University officials blew the whistle on postwar attempts to recruit players to college football squads with bribes. It was even true in the first decade of the 1900s, the earliest period of the organization that would become todays NCAA, when McClures magazine broke the news that Ivy League schools were fielding teams of phantom students, and that Yale coach Walter Camp had a $100,000 slush fund from the school.

That basketball programs like Rick Pitinos Louisville got caught making under-the-table payments isnt the real news here. No, the real news is that the FBI has decided to make it their problem. And if you read the legal complaint filed in New York against the coaches, it becomes clear what the FBI sees as the real problem and who they see as the real victim. Its not the players, the young men who are being exploited for massive profit by coaches and the schools who employ them.

Indeed, when you take a close look at the language used in the complaint, its clear that the real crime here isnt that coaches and shoe companies like Nike and Adidas are using college athletes as pawns to improve their brands and their bottom lines. The actual illegality here is that the schools, not the players, are being defrauded. From the complaint:

[Chuck] PERSON and [Rashan] MICHEL, and others known and unknown, participated in a scheme to defraud by telephone, email and wire transfer of funds, among other means and methods, University-1 by facilitating and concealing bribe payments to student-athletes at University-1 and/or their families, thereby causing University-1 to continue to provide athletic scholarships to student-athletes who, in truth and in fact, were ineligible to compete as a result of the bribe payments.

These charges do not criminalize the act of manipulating young men for the purposes of generating profit. Rather, the criminal act is the provision of these players with athletic scholarships. Remarkably, this means that without the NCAAs arcane and monopolistic amateurism rules, which price-fix the cost of a college athlete at the level of an athletic scholarship, its unclear if the FBI would have a case against these coaches at all.

In a way, the schools are the victim, US attorney Joon Kim told reporters after the arrests were announced. Its a remarkable stance to take when you consider the reams of money schools have made off of this exact scheme for years. According to the USA Today, 28 different schools, ranging from Virginia University to Texas A&M, made over $100m in revenue off college sports in the last year. College football and basketball coaches are the highest paid state employees in 39 of 50 states. Nine different schools have an athletic department with at least $200m in public debt, according to Bloomberg, as they spend money hand-over-fist to build facilities and vie for the favor of top athletic prospects.

By following this legal logic, the FBI and the DoJ are not just making the schools into victims. They are putting a state backing behind the NCAAs amateurism rules. To do so is taking a definitive stance that the players should not be paid, that amateurism is not just an NCAA rule but, effectively, the law of the land. And to those who would simply say, Well, its the rules, legal authorities have come down on the other side of the issue in the past. As Stanford economist Andy Schwarz noted on Twitter, when Congress considered making NCAA violations criminal, the Federal Trade Commission opposed the action, citing antitrust rules. Furthermore, their brief read, although there is clearly no room in any transaction for the false or misleading statements the proposed legislation would prohibit, some conduct addressed in the legislation is acceptable in many other markets. It is problematic here only because of the NCAA rules.

There is no way to look at the FBIs approach to this case and see it as a push for justice. Any push for justice would not see the schools and the institutions raking in stacks of money off of amateurism as the victims. These under-the-table payments and bribes, the treatment of players as pawns in the moneymaking schemes of coaches, universities and apparel companies would not exist if the NCAA was not a price-fixing cartel. But the FBI doesnt see the cartel as the problem. In fact, it is enforcing the cartels rules for it.

The idea of cleaning up college sports is a noble one. It is an industry that exploits the professional athletic dreams of young men across the country, many of whom see the NCAA and the pipeline to the professional leagues as their way out of dead-end poverty. But you cant even begin to solve the problem until you identify who is predator and who is prey. The fact that Attorney Kim and the FBI see the schools, the ones perpetrating the system that caused the actions of the coaches in the first place, and force young athletes to go under the table to receive any sort of remuneration for their hard work, will only push us further away from solving the real problems of college athletics.

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