An interview with Josh Luchs about his new book, which outlines a plan for reforming the NCAA
Before a game between Kansas State and Syracuse University in this year's NCAA men's basketball tournament, Wildcats forward Jamar Samuels was suspended for accepting $200 from his old AAU coach to buy food—the latest in a seemingly endless procession of pay-for-play stories and scandals that prompted a growing number of observers to call for major reform.
Are big-time college sports broken?
If so, how can they be fixed?
The Atlantic recently spoke to former sports agent Josh Luchs, author of the new book Illegal Procedure: A Sports Agent Comes Clean on the Dirty Business of College Football about amateurism, scandal, paying players, and how to make the business of college athletics more equitable.
In your book Illegal Procedure, you liken amateurism in college sports to Prohibition. Why do you make that comparison, and in what ways are the two similar?
Neither one of them works effectively. Like Prohibition, the NCAA member institutions have created this underground marketplace without adequate and effective oversight. As long as you don't address the needs of the student athletes, you're going to continue to fuel the efforts of the bootleggers—in this case, the agents and runners—who are fulfilling those needs.
Start with financial needs. The National College Player's Association did this study that showed that some college athletes on full scholarship are living below the poverty line and that there is often a gap between the full cost of attendance and what scholarships provide. A natural first step is to bring them up to the full cost of attendance. NCAA president Mark Emerett recently advanced a $2,000 elective stipend.
To me, that's an acknowledgement that the problem exists. But when the shortfall is around $3,000 and they are offering $2,000, they are giving somebody on a 10-story burning building an eight-story ladder. And in terms of the larger gap between what college athletes receive and their actual market value, you don't need to look much farther than the Atlantic article by Taylor Branch that goes piece-by-piece through the sham of amateurism.
As long as the market for [college athletes] exists, you will have people who have a business model—under the table or otherwise - that tailors to that marketplace. And as long as that gap exists and the athletes have no other way to fill it, they're being set up for scandal and failure.
Both college sports officials and lawmakers claim that amateurism and its supporting legislation—such as state and federal laws that criminalize contact between agents and college athletes—are necessary to protect student-athletes. Alabama football coach Nick Saban famously compared agents to "pimps." Do you agree with those sentiments? Why or why not?
You mean protected from capitalism? One of the biggest problems here is that you have a socialist system [college sports] trying to operate in a capitalist environment. Publicly, the college will claim that it is about protecting the student-athletes from commercial enterprise. But I would say that the business of college football has evolved into the very commercial enterprise that they claim the athletes require protection from. I don't see how anybody can think that is going to work long-term.
The scandals over the last few years have had little to nothing to do with sports agents. It's been coaches and NCAA propaganda, pointing the finger at agents—at competent representation—and vilifying them. I think it's a way to divert attention from their own wrongdoing.
As far as agents being pimps, let me remind you: Nick Saban has an agent.
In your book, you say the proposed fixes for college sports fall into two basic categories: (a) better policing of the current system; (b) changing the current system. Which approach do you prefer, and why?
Change is necessary. The NCAA is at a crossroads. In a perfect world, I think the entire system should be reevaluated and reconstructed to better reflect the current economic reality. I'm not for any system that is oppressive. I believe this one is.
But in the real world, change usually comes incrementally. You have to crawl before you can walk. So it's probably more realistic to install a few tweaks to some of the rules that allow the rules to be more effectively enforced.
In that case, let's talk better policing, starting with the university compliance departments that are charged with monitoring the interactions between agents and college athletes. You describe compliance officers as well-meaning but ill-equipped and inadequate to the task at hand, and even compare them to Wall Street compliance departments during the financial meltdown. What's wrong with the current NCAA compliance system, and what should be done to make it more effective?
The first 10 years of my agent career, when I was violating all the rules, I never saw a compliance person. I knew they existed, but they were kind of like the Easter Bunny. A fairy tale. The system is based on self-monitoring. That is proven to be ineffective. The compliance people are handcuffed by working directly for the institutions that are writing their paychecks. To think they are going to storm into the office of the highest-paid state officials—the coaches—and demand things is unrealistic at best.
Consider a player wearing a big, thick gold chain. Say the compliance person sees this, knows the player comes from a humble background. If they look too closely into where it came from and that leads to investigations and NCAA sanctions, you're going to have a press conference where the head coach is front and center talking about how great the compliance officer is. Then, when the final decision is handed down, that same coach is going to have another press conference saying that they fixed the problem and got rid of the old compliance people. They got new ones.
I've had the opportunity to meet with compliance people across the country. I have a new appreciation for how hard their job is. They are set up for failure. They are scapegoats. They are punished for doing their jobs, damned if they do and damned if they don't. For a lot of them, their offices are literally in the bowels of the athletic department. They don't even have a view of the field or locker room areas. How are they supposed to monitor things if they are fenced off and kept at arm's length form the athletes themselves?
I'm in favor of a G-men, Untouchables approach, where the compliance officers are basically autonomous and empowered to do what they need to do. Let the checks come from the NCAA, not from the universities. Why would schools investigate themselves?
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In your book, you describe a number of ways clever agents can get around current restrictions—including social networking "ghosting," which involves creating fake electronic personas, typically of attractive young women—to contact and learn more about the college athletes they are trying to recruit. In order to effectively police the current college sports system, how invasive and draconian would these "G-men" university compliance departments have to be?
You could see them asking for Facebook passwords. I think that would be taking it too far, a little George Orwell-esque. But the real problem isn't with the individual mechanisms by which they are monitoring athletes. The bigger issue is the system itself. There will always been something new stepping up and fulfilling that need I mentioned. You nail the agents, it will be marketing people. Nail them, it will be financial advisors. Every time you stop one, you empower another—you plug one hole and another leak springs open.
What about state and federal laws that either criminalize certain types of contact between agents and college athletes, or allow for civil litigation in the wake of that contact? Is this something law enforcement can and should be engaging in?
Absolutely not. All they're doing is protecting the multi-billion dollar tax exempt enterprise. I was speaking at a California Senate hearing. Dave Roberts, head of compliance for the [University of Southern California] was there. State Sen. Kevin DeLeon asked Roberts about the Reggie Bush scandal—okay, well, you have the ability to take a civil action here. Go after the offending parties—the agents, runners, marketing people. Why haven't you done that? His answer validated my position. Roberts said, they're not currently being offered immunity to do so by the NCAA. So why would USC trigger civil litigation and discovery could open up a Pandora's box of other violations and lead down a path for more sanctions? The schools have a chance to make a statement but don't do it because of self-preservation. I don't think those kinds of laws will help.
Let's discuss changing the system. You believe that paying college athletes is a better solution. What do you say to people who argue that athletes already receive fair compensation via a college education?
Fair is a subjective term. Who are any of us to say that an athlete has all they need? Whether or not you think the need exists, if they perceive that need exists then they are going to fill it somehow, some way. That perception is their reality. Not to mention the fact that the value of a scholarship at, say, Stanford University is not the same as the value at some other schools. We already have some kind of marketplace and they are already compensating athletes to come to school for scholarships. When you open that door, you leave yourself susceptible to having it kicked in. I say it's time to ram that sucker.
But I don't think that will happen unless Congress steps in. Why would schools do this? Why share the pie unless they are forced to?
After demonstrating how agents already advance money to college athletes—albeit under the table—you make an interesting and novel suggestion in your book: allow agents to legally loan money to players. Why is that a good idea?
First and foremost, being able to receive loans is a basic right that other Americans have. The only reason we think it is wrong with college athletes is that the NCAA has worked really hard to convince us that it's evil. But is it? If you're 18 years old, you can enlist in the armed forces, fight for this country and die. You are mature and mentally developed enough to make that decision. But you can't be trusted with a couple of bucks to buy yourself dinner? That makes no sense. It is only corrupt because the NCAA forbids it.
Moreover, college athletes currently are allowed to get loans to pay premiums on disability insurance, based on their future pro value. Why does the NCAA allow this? Self-interest. It gives schools one more argument to make that players should come back for their senior years. If you can get a loan for that, why can't you get a loan to better quality of living, help family back home, for anything?
I know a lot of players that came out of school early solely because they needed the money. This would help them stay in school longer. From the standpoint of self-interest, that would give the NCAA a better product to sell to the television networks. It also would take the heat off of the NCAA a little bit, quiet down the groundswell to [pay players].
I don't have answers for all the problems in all of college football. But as far as scandals involving agents and/or illegal benefits go, I think this could relieve a lot those. Take the situation at USC. Reggie Bush [accepted improper benefits] and has moved on to the next level, while the players there now are left holding the bag, not able to go to postseason games. How frustrated are alumni and the universities suffering these sanctions? Allow loans, and none of this is necessary.
How would your loan proposal work in practice?
First of all, these would be non-recourse loans. If a player can't make it as a pro, they don't owe. The risk is all on the agents.
Next, you need full transparency. Everything is legal and above board, with oversight. Currently, there are a lot of the wrong kinds of people giving players money [as recruiting inducements]. Shady characters. What has to happen? One of these playing stiffing the wrong guy and getting killed? I don't' want to wait for that. Let's legitimize the entire practice. Let's protect everybody in the transactions. Bring it out of the alleyways and shadows.
Agents would register with the NCAA. The responsibility of agent oversight would be taken away from parties that are disinterested in NCAA rules—the NFLPA—and placed directly on the NCAA. Agents would play a small fee, have background checks done, agree to provide documentation if requested by members of the NCAA. They would agree to participate in depositions and provide access to phone records and bank statements involving player contact. This would give the schools much more power and a better chance of protecting both themselves and student athletes.
The loan terms would be predetermined and interest rates would be fair and the same across the board. The only thing that would separate agents would be the amount of money they choose to loan, the amount of risk they choose to take. If players wanted to switch to an agent that they felt more comfortable with or who offered a better deal, the next agent would have to pay back the first agent.
This would allow athletes the opportunity to negotiate the best deal, and also give them much more time to make better decisions about who they are going to work with. Athletes and agents would be able to develop better relationships.
But can't college athletes already get loans through the Pell Grant program?
Some players don't qualify for much help, if any. And think about this: The NCAA rulebook allows players to apply for government grants, and also accept welfare and food stamps. But it does not allow the private market to fill that gap, even though that market is more than happy to do so. Why should we let the NCAA force these kids with good earning potential to plead poverty and apply for forms of taxpayer-funded welfare? That's really odd.
Why wouldn't college athletes take these loans, and at the same time continue to take under-the-table money?
That's always possible. But why would an athlete—who fears the NCAA revoking their eligibility—run the risk of taking money from the wrong person when they have a mechanism in place to take money from someone who has been vetted and approved in a completely transparent way? Why take it from a runner when you can take it from people who recognize your value and have an interest in your future?
What about the argument that loans would give agents too much power over college athletes and increase the chances of things like point-shaving?
I love college football. I really do. And I don't think the product would be watered down by athletes getting third-party advice. Look at the concussion issue that has been brought to light in the NFL. The same issue exists in college football but is not being discussed. Would it be so wrong for an agent to help provide a third-party medical opinion for a player? If it's good for the athlete, it should be good for the game.
As for point-shaving? Hey, in the pros there are agents and players and people gambling now. And it's not like agents are having players drop a few passes for money. If anything, there's more incentive to shave points in college because of that financial gap.
You've gone from rule-breaker to whistle-blower to reform advocate. Why did you write your book?
From being an agent, I have a unique perspective. I hope people are willing to utilize that. I hope people don't ignore my message because of the messenger. I'm not a wolf in sheep's clothing. I'm no longer looking to represent athletes. If I've always admired these athletes. It pains me to watch them basically be victimized by the system as it stands with few alternatives but to break the rules. What happened to that kid from Kansas State was a travesty and a joke. Why should he be put in a position where he has to do that? Why is it wrong for him to take money in the first place?
If I can leave the agent world better than when I started, that's something I can be proud of. I guess that's kind of self-serving and vain, but a lot of times good can come out of that.
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