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NCAA takeover completed

2007 March 4
by Skip Sauer

There are several interpretations one might make of Joe Drape’s front page story in today’s New York Times: “Facing N.C.A.A., the Best Defense Is a Legal Team.” My take is quite simple: the lawyers are in charge of college athletics.

It’s a bit of a shame really. But it’s to be expected in a market that is both highly competitive yet cartelized, where the most valuable inputs are up for grabs but unpaid.

Here’s the opener from Drape’s fine piece:

The black binders contained more than 700 pages and documented the misdeeds of the University of Kansas men’s and women’s basketball and football programs. Among the findings were payments to athletes and academic fraud. The report suggested remedies like self-imposed probation and a reduction in scholarships.

The investigation and the sanctions did not come from the National Collegiate Athletic Association. Instead, they were produced by a private law firm stocked with former N.C.A.A. investigators and hired by Lew Perkins a day after he became the Kansas athletic director in 2003.

Last October, the N.C.A.A. accepted most of the recommended sanctions and agreed not to impose a postseason ban on its teams. For two years of legal work, Kansas paid the law firm, Bond, Schoeneck & King, nearly $480,000. It was nothing, however, compared with the $23 million that the basketball and football programs generate annually.

Actually, the cost comes to about 1% of revenues on an annualized basis. While obviously worth the investment, it’s just one illustration of the rent dissipation that is rampant in major college athletics. Drape reports that there are “15 to 20 hearings a year held by the N.C.A.A.’s Committee on Infractions,” and law firms specializing in the business of pre-emptive investigation (like Bond, Schoeneck & King) attend every one. And I’d wager that most athletic departments now have a lawyer on staff. That’s how the game is played these days.

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