The NCAA and Its Money-Hungry Wall Street Attitude

I originally wrote this piece before the recent events came about at Ohio State (Jim Tressel’s resignation as well as the Terrelle Pryor investigation which has led him to leave Ohio State) and at USC (Reggie Bush’s ineligibility ruling that strips the program of their 2004 National Championship).  I will give credit where credit is due, the NCAA has done a very good job investigating the Ohio State case as of late, however, since the information has become more public it appears that most of the problems at Ohio State could have been easily found and fixed long before this season.  The fact remains, the NCAA still has major underlying issues with the structure of its compliance department, and the environment it has created within college sports.  With that being said, I hope you enjoy the post. – Andrew

If you pay attention to collegiate sports these days, one glaringly obvious shift has begun to occur: The NCAA has become the Wall Street of the sporting world.  It is not a claim that is made lightly,  not after the irreparable harm that Wall Street has caused our economy, our country and its citizens over the last several years.  As a former NCAA Div. I basketball player, I got to see the way NCAA compliance really works.  Ever since then, I have watched closely as the inconsistencies and hypocrisy grew with every infraction the NCAA ruled upon. The parallels to Wall Street are becoming eerily familiar… here is how.

Administrations and coaches are putting their self-interests (money and power) above their student-athletes interests almost every day at every program.  It’s a classic example of how the actions of a governing body (the NCAA) has set an example for its institutions to follow that is unethical and often times illegal.  Only in the NCAA’s case, they are the “be all, end all”.  The NCAA has the resources and power to act in any way they seem fit.  They are constantly sweeping corrupt and unethical behavior under the rug (ultimately encouraging it by turning a blind eye) without any controls in place to stop them from doing so.  How are they able to do this?  The NCAA is run and regulated by the same people who are allowing the unethical behavior to exist in the first place.  The people who make the rules, are the people who are breaking the rules (or are allowing rules to be broken underneath them).

The similarities between the NCAA and Wall Street are staggering.  Wall Street was able to run free for years and years because the people who were supposed to be regulating and enforcing compliance were the same people who previously had been a part of Wall Street.  The SEC and the U.S. Government, meanwhile, encouraged the behavior to happen by deregulating and turning a blind eye (mostly because their own pockets were getting fatter as they did so).  It’s no different with the NCAA.  The President’s of the institutions are the ones who run it and make the rules.  The compliance committee is made up of people who inherently are going to be self-serving when it comes to punishing the same institutions that they run.  There are simply no checks and balances to the system, and it skews the compliance efforts to protect institutions and punish (unfairly) the student-athletes in which they are supposed to be looking out for.  

The NCAA Infractions Committee is made up of 7 Institution member, and 3 from the general public.  According to the NCAA, this is meant to keep the committee balanced and fair.  Shouldn’t it be a 50/50 split then? Doesn’t the 7-3 majority strongly favor the institutions? Of course it does.  Even more so, the committee is skewed towards the larger institutions in the larger conferences.  The only smaller conference represented is the MEAC (Dennis E. Thomas, Conference Commissioner).  The point is, there is no one looking out for the interests of the players, and there won’t be as long the NCAA regulates itself.  

When it comes to players and their rights in the system that the NCAA has set up, the players have almost no standing, and they certainly do not have any advocates.  All the rules, which are supposed to define and defend amateurism, are really just oppressive measures to keep the power in the hands of the institutions which use the players for generating revenue.  I don’t know any exact statistics, but I would guarantee the average amount of money that a player in Division I basketball brings in to its programs institution (I’m talking all revenue, not just ticket sales) far outpaces the amount it costs the NCAA to operate and provide scholarships to those players.  The basic argument is that the NCAA uses its student-athletes to generate profit, stacks the deck against them purposefully (in terms of compliance, governance, and fair opportunity), and then continuously abuses the system that they created and control in order to keep the upper hand against the student-athletes at all times.

Meanwhile, coaches and the administrations that hire them are not held to the same standard.  There are no penalties against coaches when they take another job (transfer), there are no limits to the amount of money they can make, and there are very few controls on their actions. Why is a player not allowed to transfer without sitting out a year? (Or two years if they transfer within their conference.)  Coaches leave their jobs every season to take better positions and more money.  Moreover, when coaches are found to be in violation of the rules, they may get punished, but their punishment falls hardest on the players within their programs.  Why should the players get punished and banned from postseason play because of a coach’s actions? Why does Jim Calhoun get a free pass for making 1400 illegal phone calls and 1100 illegal texts, when Perry Jones gets suspended for the NCAA tournament because his mother (unknowingly to Jones) took and paid back lawfully a couple loans when he was a 16 year old?  Its absurd to even calculate the hypocrisy.  

Calhoun has routinely side-stepped penalties for infractions

The same thing goes for institutions that are allowed to switch conferences, make TV deals worth millions, build stadiums with public money, and reap all the benefits from ticket sales, jersey and apparel sales, NCAA tournament appearances, etc.  It puts in perspective the anger felt by Enes Kanter, who at age 14 was given a place to live and food to eat in exchange for playing club basketball in Istanbul. What did the NCAA do? They found this to be an infraction and wouldn’t allow him to play basketball this season.

When it comes to student-athlete rights within the NCAA, the only right they really have is to choose the program they want to go to, and once they are a part of that program all rights are waived.  Even the most basic of player protections, like limits on off-season training and in-season hourly constraints, are pretty much up to the institution (who remember IS the NCAA and regulates itself) to enforce.  These protections, by the way, as any student-athlete will attest to, are broken nearly every single week, by every single program.  The 20-hour rule? Yeah, right.  Its broken by the 3rd or 4th day of the week (optional work-outs are not optional if you want to play).  Ask the University of Iowa football players who nearly died how they feel about this rule? Ask them if they were protected by their institution and if the rules were enforced? Has anyone in the Iowa football program been actually punished properly? No.  Will they? No.  I’m sure Kirk Ferentz sleeps well at night when he sees his paycheck ($3.65 million if your wondering).  I bet anything his former players who now have severe organ damage are, indeed, having trouble sleeping; their careers could be over.

In now way am I saying that every program is unethical or immoral.  There are plenty of great examples of well run programs, but if you look across the landscape of NCAA sports, especially revenue generating sports,  you can pretty easily find the misgivings and maltreatment.  The bottom line is that student-athletes are facing an increasingly tough battle against the NCAA.  Something needs to be done, but it won’t come from the student-athletes. They know how tough their battle is, the NCAA makes that pretty evident to them (unless they put THEIR careers at stake and refuse to play, that will get the NCAA’s attention).  It needs to come from within the institutions that govern the NCAA.  Its hard to make that happen when it will undoubtedly hurt institutions where it hurts the most, their wallets.

Wall Street had its day in the sun, until the giant shadow which was the 2008 economic collapse cast its presence upon their operations.  Still, it has taken nearly 3 years to convict someone of insider trading, and not a single institution has been properly punished for their hand in the economic meltdown (pretty unimaginable all in itself).  Goldman Sachs continues to thrive, as does Citi and AIG.  The Obama administration has tried tirelessly to regulate the industry, to protect consumers and our fragile economy, yet is still coming up short.  It doesn’t look good for student-athletes in this respect, if the President of the United States can’t regulate an industry within his grasp, its hard to imagine anything stopping the NCAA and its broken system of governance.  I just hope that collegiate athletics and the student-athletes that make them possible don’t suffer the same consequences that the American people have because of the NCAA and its money-hungry Wall Street attitude.    

Andrew D. Henke