If you view it through the prism of Prohibition, it makes a lot more sense.
The FBI’s investigation into NCAA basketball has revealed what college players are really worth. We now know their true value: They are worth six-figure bribes. That tells you a lot. It tells you how desperate schools are to secure a five-star recruit. It tells you how eager agents and sneaker companies are to invest in them for the future. But the main thing it tells you is just how badly the players are being defrauded and cheated out of their fair open market value by their universities.
It’s a supreme irony: NCAA schools refuse to pay players openly, but then put a black-market value on them with the extremes to which they will go to get them in the door and keep them on the floor.
The middlemen are bootleggers who facilitate a market that is underground because of NCAA regulation. The obscenity is that the people who push the regulation are the same people being served by the bootleggers. And so they benefit from the fruits of a false economy created as a result of blocking the normal give and take of a free market.
So far, the FBI’s investigation has focused on underlings, assistants, wannabe agents, and one exec from Adidas. But these are merely the movers of the money, the bagmen, the middle men. The early indictments in the case have a basic misapprehension at their core: They portray the universities as bystanders or even victims of violations that “sullied the spirit of amateur athletics.”
In fact, the tops of universities are stocked with knowing participants, if not the very sources of the corruption. That’s where you’ll find athletic directors with seven-figure salaries and titles of “vice chancellor,” who signed the megadeals with sneaker companies, and the head coaches who built the backchannels and funnels through which cash flows.
Everybody gets paid more than they should, because student-athletes aren’t paid at all. It’s an inherently corrupt arrangement.
The key to any meaningful collegiate sports reform is to do away with this fundamentally dishonest “spirit of amateurism,” which is the root of so many NCAA ills, and creates the black market in the first place. It’s nothing more than a fig leaf for pervasive corruption. Take away the incentives for bribery, kickbacks and money laundering. Open the market, and settle on a fair metric to compensate the revenue-producing athletes, with the help of a mediator such as Feinberg. But that of course won’t happen voluntarily, because it would mean NCAA athletic directors must agree to take less. A lot less.
Even if the feds manage to put a few of the middlemen away, it won’t really change anything, because the way the system is constructed, the black market incentives remain. And the schools will still enable it.