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Tags: basketball

NCAA Created Black Market in College Sports

NCAA Created Black Market in College Sports
(Mohamed Ahmed Soliman/Dreamstime)

By    |   Wednesday, 22 November 2017 02:36 PM EST

As another college basketball season has begun, there is a subdued atmosphere compared to previous years. The buzz reverberating in arenas and gymnasiums is less about who will end up in the final four and more about dirty coaches and players and how corrupt corporate sponsors have polluted the game.

While on the surface all this seems like a morality tale that money corrupts and lots of money corrupts absolutely, the real morality tale is a bit more nuanced and tells the story of how havoc will ensue when you disrupt free markets and create a myriad of rules denying individuals their Jeffersonian pursuit of happiness.

To make a long story short, both the FBI and the NCAA have been investigating allegations that key sponsors paid high school athletes large amounts of cash to attend select colleges and universities they have business relationships with, and coaches and administrators at many of those schools are purported to have also gotten a piece of the action under the table.

Already, basketball coaching legend Rick Pitino has lost his job and college basketball pundits are speculating that before this scandal wraps up, a lot of people will be fired with some of those same people ending up in jail.

The current scandal is the results of actions taken by colleges and universities who have over the years developed a de facto system of indentured servitude for elite blue-chip players. College athletics garner at minimum $10.6 billion in revenue annually, and the people primarily responsible for generating this revenue get nothing in direct monetary compensation.

In fact, they are forbidden by harsh penalty to make any money from athletics, and they also endure hard core restrictions from earning money even from off campus jobs that have nothing to do with athletics.

Imagine you are an 18-year old high school athlete who is superbly skilled in basketball but have either no aptitude or desire to go to college. Imagine your skill level on the open market would garner you millions of dollars from the National Basketball Association. Now imagine you find yourself in a situation where the NBA and the NCAA have a cozy system in place that denies you entry into the free marketplace. How frustrated and aggravated would you be?

Now, against your perceived best interests, you are forced to enroll in a school that you have no intention of graduating from, and you have to risk a career ending injury, poor performance or a myriad of other factors which could lower your market value.

The primary excuse given for the current system is that it is in the best interest of the young athlete. After all they are getting a free education, and in the past when immediate entry in the NBA was allowed, some promising young athletes fizzled out, as they weren’t physically or mentally prepared for the NBA.

The problem with this rationale is it denies the individual the right to make their own choice about the future, and the people dictating the terms have a large vested financial interest in upholding the current system. Sound fair to you?

What the NCAA has unintentionally done to young blue-chip athletes is analogous to what was done to Americans during prohibition. The obvious outcome of what happens when people are disallowed to participate in the free marketplace is they will, one way or another, create a black market.

Prohibition created organized crime in America, and the NCAA has created the mechanism for sleazy business dealings to enter its orbit.

Now imagine college basketball players were allowed monetary compensation for their highly sought-after skills and also had the option to enter the NBA immediately after high school if they so choose. First it would allow college players to generate income from revenue that they are in large part responsible for generating.

It would also give a handful of elite athletes who have no desire for a college education a non-phony avenue to pursue their happiness. It would also take the sleaze out of the sport.

A corporate sponsor wants to help bankroll a player to go to a certain college? Terrific. That’s a win-win for everyone, and such a transaction could be done in the open light of day.

In a free marketplace no one would mandate that all colleges or universities would have to pay for elite talent, but realistically if they wanted to compete for championships they would.

Most colleges and universities would grumble at this, but my guess is, with a $10.6 billion pie that grows every year, most would do so as that would allow them to keep getting a slice of that profitable pie.

Matthew Kastel is a 25-year veteran of working as an executive in the world of sports, including professional teams, organizations, and some of the largest vendors in the industry. Matt has also written two novels and teaches and lectures at universities on the business of sports. For more information you can visit his website at thirdstrikeproductions.com. To read more of his reports — Click Here Now.

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Against your best interests, you are forced to enroll in a school you have no intention of graduating from. You have to risk a myriad of other factors which could lower your market value. The NCAA has unintentionally done to young blue-chip athletes what was done to Americans during prohibition.
Wednesday, 22 November 2017 02:36 PM
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