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20th Mar 2018

Q: For several months I have read that the FBI has been investigating alleged corruption in NCAA basketball. Criminal charges have been brought against a variety of people. What exactly is going on that our federal government is taking the time, and going to the expense, of pursuing college basketball coaches and others for “helping players?” We all know that’s not uncommon. They bring in a ton of money, but can’t get any of it?

F.C., Torrance

A: The National Collegiate Athletic Association is a nonprofit organization that regulates athletics at more than 1,200 institutions. It organizes athletic programs for many colleges and universities, both here and in Canada, and helps 480,000 college student athletes. One of the NCAA’s rules is to limit the amount of compensation amateur players can receive. This means, generally speaking, that college athletes are not to be “paid to play.”

In September 2017, the U.S. Department of Justice filed criminal cases against several college basketball “power brokers,” including coaches of major programs and executives at some multinational shoe companies. The probe was carried out over at least two years.

The allegations of bribery and fraud stem from the alleged payment of tens of thousands of dollars to steer NBA-bound college players toward sports agents, financial advisers and apparel companies. Several coaches have been fired, and the investigation is ongoing. One writer for Yahoo Sports said this of the FBI probe: “The breadth of potential NCAA rules violations uncovered is wide enough to fundamentally and indelibly alter the sport of college basketball.”

Harm arises, in part, because of the potential loss of profit-sharing revenue as part of NCAA sanctions that may be issued. There also are allegations of alleged money-laundering conspiracy.

The justification is that the federal government believes the time has come (or is well past due) to prosecute alleged corruption in amateur sports. As for compensation for amateur athletes, change may come eventually, as you’ll see from the answer below.

Q: When it comes to receiving money, what does the NCAA prohibit a player from doing or receiving?

J.A., Rancho Palos Verdes

A: The NCAA has criteria for a college athlete to be eligible to participate in intercollegiate competition. The following activities are not permitted: contracting with a professional team; receiving salary to participate in athletics; trying out, practicing or competing with a professional team; obtaining benefits from an agent or prospective agent; or receiving prize money above such necessary expenses as basic lodging and meals. This is not an exhaustive list.

At the same time, there are instances in which a college athlete can properly receive monies or benefits.  For example, additional scholarship money or stipends for the cost to attend the school. Also, while a booster of the program cannot properly give the player a gift, a postseason bowl game can provide a postseason award valued at up to $550.

Challenges have been launched to the historical rule that a college player is an amateur for whom compensation is largely verboten. Their outcome is not yet settled. One well-reported case, O’Bannon v NCAA, is an antitrust class-action lawsuit filed against the NCAA challenging the organization’s use of the images of its former student athletes for commercial purposes. The NCAA was able to defeat part of the case, but the appellate decision includes a ruling that the NCAA is a cartel subject to the nation’s antitrust laws.

Bottom line: Stay tuned.

Ron Sokol is a Manhattan Beach attorney with more than 35 years of experience. His column, which appears on Wednesdays, presents a summary of the law and should not be construed as legal advice. Email questions and comments to him at RonSEsq@aol.com or write to him at Ask the Lawyer, Daily Breeze, 21250 Hawthorne Blvd., Suite 170, Torrance, CA 90503.

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