SHEDDING LIGHT ON ISSUES IN SPORTS BUSINESS ONE POST AT A TIME.

The NCAA and athletic departments/universities around the US are finding it harder to enforce somewhat vague compliance rules. State lawmakers will play an increasingly important role in "policing" agent activity with regards to student-athletes.

In an Associated Press article written by Michael Marot, titled “Agents’ panel not taking anything ‘off the table,’” and published 27 October 2010 on the NFL News online news service available through the mobile Android application dubbed “NFL News,” agents and student-athletes are increasingly targeted over time in a recent probe by the NCAA.  The collegiate athletics sanctioning body commenced an investigation of ever-increasing thoroughness after Reggie Bush was accused of accepting consideration from agents while a student-athlete at the University of Southern California.  More recently, six University of North Carolina student-athletes were suspended from athletic events after allegations were leveled at the latter and coaches who broke NCAA rules by engaging agents and accepting consideration for contact with players and coaches on the football team.

Josh Luchs: the agent industry's Jose Canseco.

Serious issues underline the fact that student-athletes are keeping relationships with agents and coaches – as in UNC’s case – are facilitating the process.  According to Marot’s article, since the late 1980s, student-athletes like Ohio State superstar and prospective Pro Football Hall of Fame wide receiver Chris Carter have either accepted consideration from agents or simply contacted them before their eligibility expires.  It is an old problem that lingers in the student-athlete’s former athletic department (i.e. Reggie Bush sunk USC’s athletic department and football program, though he and the offending agents were the only parties in breach of NCAA rules) and disappears from the athlete’s life upon departure from the university/team.  Therefore, the NCAA has enlisted the help of former agent/whistleblower Josh Luchs in its determined and focused effort to decrease the frequency of such infractions.  By punishing student-athletes who are drafted by the NFL and any agents who violate NCAA and state rules and laws, the sanctioning body hopes to deter engagement in said activities, which affect the university and uninvolved/innocent student-athletes who remain at their institutions in the long run and follow the rules.  In a statement by the NFLPA – a prime stakeholder in the student-athlete/agent controversy – mentioned in Marot’s article, however, the professional players’ union refused to levy penalties on players who violated NCAA rules in spite of any of the probe’s findings.

The NCAA’s investigation extends beyond the USC and UNC football teams.  Currently, student-athletes at the University of Georgia, University of Alabama (defending BCS national champions), and the University of South Carolina have been implicated in the league’s investigation.  The problem of agent/player relationships resulting in an exchange of consideration before the end of the student-athlete’s college playing career is more insidious than originally thought.  Clearly, student-athletes – specifically college football players – are lured by financial gain to break NCAA rules.

It would be interesting to see the results of a decision by the NCAA to share its revenue with student-athletes in a holistic attempt to prevent unethical behavior by the latter and agents.  Since over 90% of college athletic departments operate at a loss, revenue sharing would be accomplished through the NCAA and not on a per-school basis.  Universities with athletic departments sanctioned by the NCAA ought to be audited to ensure that financial statements accurately represent curtailed profits.  In such a case that the statistic is true, then the NCAA ought to create escrow accounts for student-athletes that may be either withdrawn upon graduation to assist with transition to a life outside of professional sports, or give the former student-athlete a head start on a retirement fund.  After all, the NCAA’s assets reach well beyond seven, eight, or even nine figures per year, yet it does not incur the same costs that significantly decrease professional leagues’ retained earnings at the end of the year: player salaries.

All in all, the process has only just begun.

Cam Suarez-Bitar.

For more on the topic of student-athletes and revenue sharing, you can read a related article at http://csbcomsportsbiz.com/2010/08/03/should-college-athletes-be-paid/

The fact that student-athletes are willing to accept money from agents or boosters acting unethically may signal a growing demand for revenue sharing between the NCAA and college student-athletes. After all, without the student-athletes, would athletic departments, universities, or the NCAA (i.e. Bowl Championship Series) have a product to market? Depending on your answer, it follows to ask what would constitute fair compensation for the full-time student-athletes who make college football the prime time spectacle the nation follows and marketers exploit. It is a challenging conundrum, to say the least.