GOVERNANCE

Ryan P. Mulvaney, Esq. Partner; NBPA certified agent; FIBA licensed basketball agent [email protected] McElroy, Deutsch, Mulvaney & Carpenter, LLP, New Jersey The NCAA Commission’s report and recommendations on - some layups, some airballs On 11 October 2017, resulting from the arrests of numerous college coaches, Adidas representatives, and a recruiter for a now defunct sports agency in connection with the United States Attorney’s Ofce for the Southern District of New York’s (‘DOJ’) investigation into corruption in “the dark underbelly of college basketball1” - paying coaches, players and/or their families - the National Collegiate Athletic Association (‘NCAA’) President Mark Emmert announced the formation of the Commission On College Basketball (‘Commission’) to examine Division I basketball2. In this article, Ryan P. Mulvaney, Esq., Partner at McElroy, Deutsch, Mulvaney & Carpenter, LLP, provides his analysis of the resulting report and recommendations (‘R&R’) published by the Commission to address the issues in collegiate basketball in the US.

Introduction when it comes to opining on monetarily Christian Dawkins of now defunct ASM In its R&R, the Commission noted rewarding players who are targeted by Sports, a financial advisor, Munish Sood, that those it interviewed not only Division I programs in grammar and high and a suit maker, Rashan Michel (‘Agent/ confirmed the DOJ’s allegations but school not for their academic prowess Advisor Defendants’);11 and an executive, highlighted concessions of actual but for their athleticism (ability to earn James Gatto, and representatives, knowledge: “everyone knew what universities and conferences money), Merl Code and Jonathan Augustine12, was going on3” and “many informed the Commission’s silence is deafening. of Adidas (‘Adidas Defendants’)13. [the Commission] that when the U.S. The universities identified in the Attorney’s Ofce announced the Although the Commission casts blame indictments are all public universities charges that led to this Commission, on the NCAA for its kangaroo court- (because they receive federal funding) the reaction was that ‘everyone like and inconsistent adjudications to which players were influenced to knows’ that these payments occur4.” of investigations, it largely shifted commit through improper payments - responsibility to third parties to fix Auburn14, NC. State, Louisville, Miami, To be sure, a literal pay-to-play the NCAA’s problems. To assess Kansas15, South Carolina, Oklahoma environment has knowingly existed the recommendations, however, we State, Arizona, and U.S.C16. at the intersection of education and must discuss from where we came. athletics. Why? The lure of money. Money The DOJ’s allegations of the two- generated and earned by the ‘student- The investigation and indictments pronged scheme are plentiful, athletes’ for the NCAA, universities, After a two year investigation7 that substantive, and set forth in particularised broadcast and cable television included a cooperating witness, fashion17. In the first prong, the ‘Coach companies, and apparel companies undercover agents and wiretaps, the Bribery Scheme,’ Agent/Advisor has grown to epic proportions and, FBI arrested ten people for their alleged Defendants allegedly paid Coach with it, pressures on coaches to win participation in a widespread conspiracy Defendants and sometimes players or for their programs and temptations by to commit and solicit bribes, wire fraud, their parents in exchange for Coach all to profit of players while they can. honest services fraud, and to defraud Defendants exerting pressure over Rather than make recommendations the US8. The investigation started players and parents to retain Agent/ concerning the root of the problem - with the assistance of a cooperating Advisor Defendants18. In the second money in basketball, and coincidentally, witness, Louis Martin Blazer III9, a prong, the ‘Sportswear Company Bribery a stance on whether players should financial advisor who pleaded guilty to Scheme,’ Agent/Advisor Defendants receive monetary recognition for securities fraud for misappropriating worked with Adidas Defendants, their eforts - the Commission took money from clients including professional including high school and Amateur no position despite recognising that athletes. Blazer coincidentally Athletic Union (‘AAU’) coaches whose “Division I men’s basketball… [is a] possessed and ofered his personal teams were sponsored by Adidas, to multi-billion dollar enterprise5.” Odd, knowledge of the alleged corruption pay players or their parents in exchange because although the Commission lacks in college basketball to cooperate for the players to commit to universities jurisdiction to change the NBA’s ‘one- for a lesser sentence in his case. sponsored by Adidas and a promise to and-done’ rule, it began its R&R and sign with Agent/Advisor Defendants19. devoted ten pages to opining how the Those arrested were Chuck Person, rule has “significant[ly] corrupt[ed] and Lamont Evans, Emanuel Richardson, and The Commission and R&R destabilize[ed] college basketball6.” Yet, Anthony Bland (‘Coach Defendants’)10; The Commission was established to

12 WORLD SPORTS ADVOCATE examine Division I basketball and ‘to involves only approximately 10 to 20 of Indeed, student-athletes should not be identify bold legislative, policy and the thousands of Division I basketball punished for staying in the Draft but structural modifications to improve the players. The Commission’s opinion not being drafted. The Commission’s integrity of our processes and the well- disguised as recommendation simply recommendation is a good start (as is being of our student-athletes20.’ The jumps on the bandwagon of recent its recommendation that players who Commission focused on the relationships public sentiment, and supports the leave college after two years be allowed of the NCAA, its universities, student- appearance that the R&R largely blames to complete their degree with funds athletes and coaches with apparel others because, as the Commission designated for them)31, but that would companies, with AAU programs, and acknowledged, ending one-and-done significantly limit players’ potential to with agents or advisors; the relationship is not within the NCAA’s jurisdiction26. sign undrafted free agent contracts, between the NCAA and the NBA, Summer League contracts, and two- including the one-and-done rule; No real reform can be had without a way and G-League contracts and would and ‘promot[ing] transparency and position and recommendation on the compel players to return to school. The accountability’ between the NCAA false notion of ‘amateurism.’ Although NCAA, NBA and NBPA should therefore and its universities21. In April 2018, the Commission briefly reviewed establish a deadline beyond the Draft for the Commission issued its R&R. the arguments involving financially undrafted players’ ability to be signed compensating players for the NCAA’s and still maintain collegiate eligibility. End one-and-done and universities’ use of their name, image The Commission recommended that and likeness, and financially recognising “If we take care of everybody and the NBA and NBPA end the 2006 players for the untold billions generated everything is done, we control collectively-bargained rule that by them for others, the Commission everything… You can make prohibits high school players from being took no position and chose to await millions of of one kid32.” immediately eligible for the NBA Draft. the outcome of pending litigation. The According to the Commission, ‘[o]ne- Commission missed an opportunity to set The Commission also recommended that and-done has played a significant role forth an opinion in support of the players. the NCAA ‘develop strict standards for in corrupting and destabilizing college the certification of agents, and authorize basketball, restricting the freedom of Allow student-athletes to test and make opportunities for those choice of players, and undermining the professional prospects with the certified agents to engage with student- relationship of college basketball to assistance of agents sooner while athletes at school at specific times33.’ To the mission of higher education22.’ The maintaining eligibility do so, the Commission suggested that Commission considered, but did not While declaring that the NCAA ‘should the NCAA develop an agent certification recommend, that the NBA and NBPA provide both high school and college program34 separate from existing adopt the ‘baseball rule […] which would players with additional flexibility in NBPA agent certification to ‘create make student-athletes who attend retaining collegiate eligibility while opportunities for ‘good’ agents to talk college ineligible for the draft of the assessing their professional prospects,27’ with high school and collegiate players G-League for two or three years23.’ the Commission recommended that and make their cases so that players the NCAA should allow players to would have all available options before Ultimately, ending one-and-done is declare for the NBA Draft but maintain they enter the professional market’ and correct because it will allow those who their eligibility if they do not sign a ‘intends NCAA-certification to provide are skilled enough to immediately and professional contract. The Commission’s these opportunities for “good” agents35.’ freely pursue their chosen profession. recommendation here is valid and The Commission also recommended To be sure, not every high school player should be adopted by the NCAA. that ‘high school players considering is LeBron, Kobe, or Kevin Garnett, but entering the draft should be allowed as the Commission recognised, some Currently, underclassmen may declare to engage NCAA-certified agents and are uniquely qualified to immediately for the NBA Draft, attend the Draft advisors just as high school baseball play in the NBA24. To suggest one-and- Combine (if invited), and even work out [and hockey] players may engage done ‘has played a significant role in for NBA teams, but must timely choose agents for advice about the draft36.’ corrupting and destabilizing college between staying in the Draft or returning basketball,’ [emphasis added] however, to school to maintain collegiate eligibility. This recommendation has disastrous incorrectly presupposes college As the Commission correctly noted, consequences. First, the Commission’s basketball was not already significantly ‘student-athletes who are wrong about recommendation presupposes that corrupted and destabilised before their professional prospects should agents and ‘runners’ are not already one-and-done and that payments are retain the opportunity to work toward lingering around high schools, AAU funneled only for lottery picks (1 through the degree they were promised28.’ programs, and open practices at 14) and not for others. Based on the universities37. Second, it validates the documents obtained in the investigation, The Commission qualified its very conduct with which the Commission the alleged payments from ASM Sports recommendation by suggesting that the is already concerned and knows is included players not selected in the NBA and the NBPA agree ‘that players happening - agents ‘courting elite players first 14 selections of the 2016 and 2017 who are not drafted become ineligible from an early age38.’ Third, it simply NBA Drafts, thereby demonstrating for the NBA until they enter the draft pushes the problem of the NCAA’s that one-and-done is not why the again’ the following season29 because, lap onto the laps of high schools and NCAA finds itself in the crosshairs of currently, any player who is not drafted AAU programs (or, at least to those the DOJ25. Moreover, the suggestion is is a free agent who can sign with any high school and AAU programs where disingenuous because one-and-done NBA team or G-League afliate30. the problem does not already exist)

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continued thereby fostering or solidifying existing coaches in (who are incentivised by to have a deterrent efect. Moreover, improper relationships with them. their players either not declaring at the neutral adjudicators can and should all or, if they do declare, to return be retired federal jurists, or the matter Moreover, the Commission mistakenly to school) the process, and instead should be arbitrated before JAMS42, who relies on its example of high school allow experts from the NBA and USA are not alumni of the universities (or their hockey and baseball players using the Basketball to evaluate and provide law schools) involved in the investigation. services of agents when considering guidance to players, as they currently entering drafts to suggest that will do, through individual team workouts, Mitigating AAU’s damaging influence, eradicate the existing problems in the Draft Combine, and through the and apparel company transparency basketball. None of us can recall the last Undergraduate Advisory Committee. Here, the Commission suggested hockey or baseball recruiting scandal or reforming AAU or disassociating tales of little league baseball coaches, Moreover, requiring agents already with it entirely. As those with whom or peewee hockey coaches selling their certified by the NBPA to also be certified the Commission met acknowledged, players to bidding universities, apparel by the NCAA - when the purpose of empowered AAU coaches selling players companies, and agents. The money in certification is to determine expertise to high schools, colleges, and agents those collegiate sports is simply not in the Collective Bargaining Agreement occurs and unethical conduct runs amok. enticing enough. Additionally, although and the regulations governing the All coaches - AAU, high school and high school seniors who play hockey conduct of agents - is a meaningless college - should not have a personal or baseball may be drafted from high requirement and nothing more than stake in the future earning potential of school, there are multiple layers of minor bureaucracy. Coincidentally, labeling, their players and should genuinely care league baseball and hockey leagues to use the Commission’s words, those for a player’s wellbeing and future. Some, in which the players can professionally who obtain NCAA agent certification however, see their players as meal tickets hone their skills. In basketball, there as ‘good agents,’ simply because and seek to profit of them while they is only the G-League. Finally, if the they obtain certification, ignores can. Parents, and the players themselves, NCAA, NBA and NBPA considered the allegations about ASM Sports place their trust in their coaches who adopting an early entry player draft - certification does not constitute are supposed to safeguard the players model from another collegiate sport, ‘good,’ ‘ethical,’ or even ‘competent.’ and act in the players’ best interests the flexible hockey rule works best free from conflict. Unfortunately, that because it allows players to be drafted Establish neutral investigation does not always happen. Indeed, too from high school and either play with and adjudication of infractions; often the very people who are charged the NHL team, a minor league afliate, accountability with the responsibility to genuinely care or attend college and the team that The Commission declared the NCAA’s about and protect unsuspecting children drafted the player retains rights to the investigative, enforcement and penalty simply exploit and sell them for their player for a certain period of time. process ‘broken’ and lacking ‘tools own financial gain. As the DOJ noted: and authority necessary to investigate “coaches at some of the nation’s top Furthermore, agents do not determine complex cases and efectively prosecute programs taking cash bribes, managers whether players will be drafted, nor are violators of rules39.’ ‘The state of and advisors circling blue-chip prospects they the only ones who can players afairs - where the entire community like coyotes, and employees of a global and families with making more informed knows of significant rule breaking sportswear company funneling cash to decisions on their professional prospects. and yet the governance body lacks families of high school recruits43” and The decision to draft a player lies the power or will to investigate and “exploited the hoop dreams of student- exclusively within the sound discretion act - breeds cynicism and contempt40.’ athletes… treating them as little more of NBA personnel. The answer to the The Commission recommended than opportunities to enrich themselves problem of agents lurking around youth implementing a two track system (one through bribery and fraud[.]44” Even and college players is, therefore, not to for complex cases and a second for all Kobe, while criticising AAU coaches for now make ethical what was previously other cases), using neutral professional failing to teach fundamental basketball, unethical (and unlawful) conduct by adjudicators with authority to impose real suggested that “the coaches who ofcially introducing them to players, punishment, and that the investigative are teaching the game are getting families and coaches at a younger age arm be independent and empowered rewarded in one fashion or another45.” regulated by the same entity - NCAA to require cooperation of witnesses - that either could not or chose not and production of documents41. The Commission’s recommendation to regulate the problems set forth in that the NCAA, with assistance from the DOJ’s indictments about which Implementing the Commission’s the NBA and USA Basketball, run its everyone except the NCAA knew was recommendations are necessary if the own recruiting events for high school happening. The NCAA should remove NCAA takes seriously the issues in the prospects would help eliminate some agents from (who are incentivised purely indictments. Investigations must be of these problems. In addition, the by the player declaring and signing a real; sanctions must have teeth, and be NCAA, with the assistance of the NBA professional contract) and limit college extraordinarily punitive across the board and NBPA, should take it a step further;

14 WORLD SPORTS ADVOCATE Implementing the Commission’s recommendations are necessary if the NCAA takes seriously the issues in the indictments.

either assume control of AAU or start dollars. The NCAA permitted apparel word is more polite - ‘recruited’ - but its own non-scholastic league and staf companies entry and unchecked growth let’s call it what it really is) to actually it with NBA and G-League coaches, in college sports. All one needs to do is generate the revenue are left out of the basketball operations personnel, former read The Last Shot47 to see that college equation save an academic scholarship. coaches, and former NBA players. basketball has arguably turned a blind Although adopting the changes in the eye to the overall problems it has had R&R may provide more opportunities for Oddly enough, despite the DOJ’s for decades and now seeks to place high school players, harsher penalties indictment of an Adidas executive and at the feet of the NBA and NBPA. for rules violations, independent others, the Commission spends only investigations, and transparency in half a page on its ‘recommendation’ Conclusion AAU and apparel companies, nothing addressing apparel companies, The R&R contains some good will ultimately change unless the suggesting simply that they be financially suggestions, but nothing revolutionary. elephant in the room is addressed. transparent46. As the Commission Frankly, the Commission missed a recognised, apparel companies fund golden opportunity to take a stand Indeed, “it is time for coaches, athletic AAU programs, youth basketball on the underlying problem - money, directors, University Presidents, Boards tournaments, give out untold millions in amateurism and name/image/likeness. of Trustees, the NCAA leadership and free sneakers and athletic clothing (for And, while money continues to pour staf, apparel companies, agents, pre- the express purpose of monetary gain in to universities and conferences collegiate coaches - and yes - parents at a later date), and through long term from long term television and apparel and athletes - to accept their culpability deals sponsor collegiate basketball contracts, those who are targeted as in getting us to where we are today48.” programs in the hundreds of millions of high school prospects (the NCAA’s

1. Joon H. Kim, Acting U.S. Attorney, S.D.N.Y. (Press Conference 26 Sept. 2017). schools-103338484.html 2. Statement From President Mark Emmert (http://www.ncaa.org/about/ 26. The one-and-done rule was negotiated between the NBA resources/media-center/news/statement-president-mark-emmert-formation- and NBPA in the 2006 Collective Bargaining Agreement. commission-college-basketball). 27. R&R, p.32. 3. Remarks by Dr. Condoleezza Rice, p.1. 28. Id. 4. R&R, p.9. 29. Id. 5. R&R, p.18. 30. Id. 6. R&R, p.3. 31. Id. p.35. 7. DOJ press release, p.2 (Sept. 26, 2017); see also U.S. v. Gatto, et al., Sealed 32. Evans Sealed Compl., para. 82(b) (quoting Defendant Dawkins). Compl., ¶ 13, n.4. 33. R&R, p.33. 8. U.S. v. Person, et al. (17-cr-683) (‘Person Superseding Indictment’); U.S. v. 34. Id. pp.33, 34. Evans, et al. (17-cr-684) ‘Evans Indictment’); U.S. v. Gatto, et al. (17-cr-686) (‘Gatto Superseding Indictment’). 35. Id. p.34. 9. https://www.cnbc.com/2017/09/26/key-witness-in-ncaa-basketball-scandal- 36. Id. (citing NCAA Division I Bylaw 12.3.1 (Exception - Baseball and Men’s Ice is-fallen-investment-adviser.html Hockey - Prior to Full-Time Collegiate Enrollment), which provides: ‘In baseball and men’s ice hockey, prior to full-time collegiate enrollment, 10. Evans Indictment, para. 1-4, 10-12; Person Superseding Indictment, para. 2-4, an individual who is drafted by a professional baseball or men’s ice 6. hockey team may be represented by an agent or attorney during contract 11. Evans Indictment, para. 9, 13; Person Superseding Indictment, para. 7. negotiations. The individual may not receive benefits (other than 12. Although Augustine was a defendant in the Gatto Sealed Complaint, he was representation) from the agent or attorney and must pay the going rate not named in the subsequent indictments. for the representation. If the individual does not sign a contract with the 13. Evans Indictment, para. 14; Gatto Superseding Indictment, para. 1-4, 10-12. professional team, the agreement for representation with the agent or attorney must be terminated prior to full-time collegiate enrollment.’ 14. Person Superseding Indictment, para. 10. 37. “I can go to [University 4’s [Arizona]] practices like I’m on the team… 15. Gatto Superseding Indictment, para. 5-9. The coaches, that’s the easy, that’s the easiest thing because they all, I 16. Evans Indictment, para. 5-8. know them all anyway. We’re friends.” (Evans Sealed Compl., para. 83(c)) 17. In Gatto, the DOJ alleges that an unidentified co-conspirator is an AAU coach (Defendant Dawkins explaining on wiretapped telephone conversation the whose team was sponsored by Adidas. Gatto Superseding Indictment, para. ease with which he gains team access). 14. 38. R&R, p.32. 18. DOJ Press Release, p.2 (26 Sept. 2017); Person Superseding Indictment, 39. R&R, p.39. para. 1-3; Evans Indictment, para. 1-4. 40. Id. at p.9. 19. DOJ press release, p.2 (Sept. 26, 2017). 41. Id. 20. Commission on College Basketball Charter (http://www.ncaa.org/ 42. JAMS is the largest private alternative dispute resolution provider in the governance/commission-college-basketball-charter). world with a panel of over 350 retired judges and attorneys. 21. Id.; see also R&R, p.15. 43. Joon H. Kim, Acting U.S. Attorney, S.D.N.Y. (Press Conference Sept. 26, 2017). 22. R&R, p.3. 44. Id. 23. Id. 45. https://bleacherreport.com/articles/2610640-kobe-bryant-comments-on- 24. The Commission recognised that, ‘[o]ver the past decade, the number of aau--impact-on-sport one-and-done players has ranged from 5 to 18[ ]’ and growing with each NBA 46. Id. at p. 46-47. draft with ‘9 in 2014, 13 in 2015, 14 in 2016, and 18 in 2017.’ R&R, p.19. 47. Frey, Darcy, The Last Shot: City Streets, Basketball Dreams 25. https://www.yahoo.com/amphtml/sports/exclusive-federal-documents- (Houghton Mifin Co. 1994). detail-sweeping-potential-ncaa-violations-involving-high-profile-players- 48. Remarks by Dr. Condoleezza Rice, p.1.

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