Sport and Society – College Hoops Corruption

Editor’s Note: “Sport in American History” is excited to cross-post Richard C. Crepeau’s “Sport and Society” column. This post was originally published on October 25, 2018. A full archive of his Crepeau’s columns can be found by clicking here.

If you want to keep up with intercollegiate athletics these days, it would be wise, to keep your eyes on the nation’s courtrooms. This week in a federal court in New York three defendants were found guilty on federal charges of wire fraud and conspiracy to commit wire fraud. The three defendants funneled payments to individuals in order to induce teenage basketball players to attend universities that had contracts with particular apparel companies. Once signed by the university, the student-athlete would be signed to a shoe contract, a financial planner, and an agent.  Two of those found guilty had worked for Adidas, and one was a freelance agent.

There are two more trials in the pipeline resulting from a probe conducted by the FBI. Initial indictments were handed down in September of last year and almost immediately produced fallout at the University of Louisville where the head basketball coach and athletic director were dismissed.

In February of this year, documents surrounding this case made their way to the public via Yahoo Sports, and FBI recordings have now been released. What they show is just how widely this pool of money flowed and the extent of the sums of money involved. Even by the low expectations we have come to hold about the levels and extent of corruption in intercollegiate athletics, these revelations were nearly shocking.

The documents implicated a large number of major basketball powers, including Duke, North Carolina, Texas, Kentucky, Kansas, and a host of others. As many as twenty-five players may be involved across thirty different Division I basketball programs. Documents indicate that an employee of ASM Sports, founded by sports agent Andy Miller, provided loans to players ranging from $150,000 to a few hundred, depending on the market price. In the case just concluded, the source of the money was traced to an Adidas employee.

In this process, not just in this one case, the money trail flowed from apparel companies to assistant coaches and agents, and ultimately to members of the families of highly desired basketball players. The object was to influence the players on their choice of college, one that had a contract with that company. Sometimes the process resulted in the desired outcome, although glitches in the process can occur when more than one apparel company and more than one college is seeking to recruit the same player.

So what can be learned from these revelations? Clearly the world of college basketball is corrupt, but we knew that. Parents, relatives, close friends, and others have no problem in taking money from those willing to give it. In some cases, even the players themselves receive some of these rewards.

At the nexus of the system is a coterie of coaches, assistant coaches, agents, and would be agents. Star players are needed for coaches to build a winning reputation and their own personal financial well-being. The assistant coaches have the same motivation, as assistant coaches build their own reputations on being great recruiters, a pathway to advancement in the coaching profession. Good assistant coaches also give head coaches “deniability” in this process.

In many ways, there is nothing particularly new here. Inducements have always been a part of the recruiting process, and there have always been those who have funneled money and other perks through the system. Early examples of this consisted of hiring the father of a recruit as an assistant coach or to some other position in the university athletic bureaucracy. The alumni and boosters were always tapped as significant figures in passing under-the-table rewards to recruits. Perks have dotted the landscape for decades.

What is new in all of this is the size and scale of the rewards system and the intensity of the competition for players. In large part, although not entirely, this has been driven by the arrival of the big athletic apparel companies on campus, bringing with them very large sums of money and merchandise. Nike, Adidas, and Under Armour have spared no expense in what has become a deadly economic competition in a multi-million dollar marketplace.

The industry leader, indeed the pioneer, in this new world was Phil Knight and Nike. The power of Nike in the marketplace and across the world of sport is daunting. The company has come to dwarf teams and leagues, and now universities and conferences. Today, the Nike Swoosh is ubiquitous in sport.

Knight started by becoming a major donor to his alma mater and especially to the athletic program at the University of Oregon. Because he transformed athletics on campus he found himself in a position to exert controlling power on athletic policy and, subsequently, on policy all across the campus with input on all matters of interest to him.

The success of the Nike model led others to move in the same direction, with Adidas, Under Armour, and lesser players descending onto campuses. This money and merchandise has transformed universities into marketing agencies for apparel companies.

As for the universities, they are receptive to this money due in part to the insatiable appetite of athletic departments for revenue. Once the revenue is taken, control of the university easily slips to those outside the institution.

This is a large part of what produced the trial and convictions in New York. And there are more to come.

Does any of this matter to anyone? Well, sorry to say, probably not, except for a few people who are not mesmerized by the American sporting spectacle, and a few people who think that universities are public institutions and not the agents for American entrepreneurs and private interest. The only thing new in all of this is scale.

On Sport and Society this is Dick Crepeau reminding you that you don’t need to be a good sport to be a bad loser.

Copyright 2018 by Richard C. Crepeau

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