When playing dumb isn't enough: a proposal to strengthen amateur athlete compliance

Due to the ruckus about the alleged payments to OJ Mayo, following in the wake of Reggie Bush and his shenanigans, I've been giving some thought to what kinds of activities might be required to do a better job of preventing issues with agents or other interested parties making payments to players against NCAA rules.

It seems to me that there are two ways to look at this, which both require focusing on the demand side. The challenge in a demand-side focus, as will become clear, is the degree to which surveillance and enforcement are possible, and meaningful. The first dimension that I considered was Athlete Demand, and some of the issue associated with enforcement against Athlete Demand prompted me to consider Agent Demand.

Surveilling Athlete Demand, or, Catching the Little Fish

When we speak of plasma televisions and tickets to NBA games, we are speaking of what I'll call Athlete Demand - when (nominal) student athletes are accruing cash or benefits in kind such as plasma televisions (ahem). Back in the old days, boosters used to provide "jobs" for players to provide a veneer of compliance, but as Rett Bhomar discovered, that dog won't hunt any more. Those schemes are fairly easy to detect. They are also no longer the sole problem in ensuring compliance with rules about compensation - the economics of professional sports have changed, and so too has the source of the big under-the-table money.

You can extrapolate that point from articles about Reggie Bush and OJ Mayo which have contained assertions that agents routinely funnel money to players' families, who in essence launder it back to the player. It's a different color of money, and the people directing it are a bit more sophisticated than Lexus dealers in Norman.

From an enforcement standpoint, the conversation has been about trying to catch the players. The challenge is in detecting these kinds of schemes - you can visit players' rooms to see if there's any suspicious schwag, but how then do you prove that it's the product of an aunt recycling agent's lucre rather than embracing consumer debt? It would require rather more sophisticated policing.

A logical way to try and catch this kind of behavior would be financial surveillance - requiring audits of players and their families, including bank transactions showing funds transfers. But leaving aside the legal issues associated with it (for instance, I think the Fair Credit Reporting Act allowances for financial monitoring don't extend to the families of individuals under surveillance), I suspect that taking such an approach would result in antagonizing those who comply with the rules, and creating incentives for greater creativity for those who would not. Off the top of my head, it seems like Visa pre-paid travel cards with a fixed value would be a simple way to evade financial transactions with an audit trail.

A few sentences of speculation open up a can of worms for enforcement, and is directed only at the recipients of the cash - but they are only half the problem. But if you accept my premise that the incentives to cheat and the source of money have changed because of the economies of professional sport, then why not engage those sporting entities?

In other words, let's say for the sake of argument that you're the NCAA, you have to continue to track enforcement of rules directed at players, but you also know that there's a huge incentive to find new and creative ways to break benefits rules while evading detection. What do you do? If it were up to me, I'd pursue a policy of trying to control Agent Demand, and I'd want the professional leagues to be part of that solution.

Controlling Agent Demand, or, Penalizing Pimps

Agents need players to represent, and the more valuable the contract, the greater the value to the agent. That's why there's agent demand for star players as clients. There's an obvious incentive for an agent to funnel money to a player when he is still in college - the amount expended is very much less than the agent stands to make, if the player signs. Theoretically there are legal penalties to the agents if they get caught, but that doesn't seem to be stopping them.

So how can agents be stopped? It seems to me that in all the fuss about agents, colleges, and athletes, two organizations have been conspicuously absent in stepping up with solutions: the NBA and the NFL. Much ink has been spilled about how both of these leagues benefit from having the college game function as a farm system, and the NBA, with the "one and done" rule, has only magnified the incentive to cheat - you've only got to evade detection for a year - as well as increased the odds that colleges get screwed on basketball players' APR issues. Instead of creating incentives to break the rules, the leagues should be finding ways to support those rules.

One way in which the NBA and the NFL can help is to institute central oversight of rookie contracts, with rookies represented by contract lawyers from a pool pre-qualified by the leagues. Players can hire an agent for endorsement purposes only after they have completed their contract with the team that drafted them. Agents who are caught attempting to circumvent these league rules become a reason for sanctions on the players who use them - in other words, Ornstein screws up under this rule, the veterans who use him are fined $10,000 a week until they break their relationship with him.

I don't doubt that there are a variety of holes in this idea, but it seems to me that the people who stand to get the most benefit out of college football and basketball, who have created incentives to break NCAA rules about funding to players, and who are doing nothing to fix it, are agents and the leagues. You can't trust the agents to police themselves, so why not make the leagues partly responsible for policing the agents?

Of course, another alternative would be to pay players more, but that's a topic for another post.

Thoughts? Alternatives? Hit up the comments section.

[Note by DC Trojan, 05/22/08 6:24 PM EDT ] PB from Burnt Orange Nation pointed out via email that one question might be whether or not the Players Associations would buy into this - a good point. It might be advisable to have the contract lawyers be vetted by them as well as / instead of the leagues, in order to remove the appearance of putting the rookies at a disadvantage.

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