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Pay for Play

Hot dogs at ball games or roast beef at the Ritz? It's all the American Dream.

April 7, 2024
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Sent undercover by the FBI, financial advisor Marty Blazer infiltrated the innermost circles of college basketball. After stealing $2 million from his NFL client’s financial accounts, Blazer, in an attempt to avoid jail time, entered a plea agreement to covertly record thousands of hours of conversations with coaches from leading U.S. college teams. What they revealed was an epidemic of deception, bribery, and fraud in the NCAA.

On 27 September 2017, the FBI and the Office of the United States Attorney for the Southern District of New York arrested 10 individuals; further implicating 20+ U.S. colleges and universities; 25+ current and former players, and global brands such as Nike and Adidas. Spinning the basketball on the tip of their finger was the NCAA.

Amazon Studios > George Clooney > Grant Heslov’s Smokehouse has acquired the screen rights to produce "Hot Dog Money: Inside the Biggest Scandal in the History of College Sports" where bribery, money laundering and fraud are on the backcourt. The tide has turned and die is cast to now reflect the fans.

Fraud, Uncensored

In civll law, fraud is the misrepresentation or concealment of fact upon which other’s rely. Criminal law is far more convoluted.

In the main, criminal fraud is theft by false pretense, intentional deception, and false representation thats transactional. Examples include: Samuel Bankman-Fried, poster boy of the FTX cryptocurrency exchange who was sentenced to 25 years in prison for multiple fraudulent schemes; and former president and GOP frontrunner Donald Trump who was found guilty of fraud and conspiring to falsify his business records, issuing false financial statements, conspiracy to commit insurance fraud. Sidebar: Trump owes at present $454 million of his fortune. He posted a $175 million bond on Monday and has 10 days to “justify” the bond.

Sentenced to disgorge millions in ill-gotten gains is tuppence in the larger industry of fraud. US consumers lost a collective $10 billion to fraud in 2023, representing a 14 percent spike from the previous year's reported losses, according to the Federal Trade Commission.

Yet to understand fraud one must be in command of the United States free speech exceptions. Obscenity, child pornography, speech integral to illegal conduct, speech that incites imminent lawless action, speech that violates intellectual property law, true threats, false statements of fact, defamation and commercial speech including advertising are not actually protected and can and often do constitute fraud.

While Clooney’s project mines the kick backs, incentives and indentured servitude of college sports, it reveals the billions generated every year to everyone but the college athletes. That includes coaches, broadcasters, network executives and others, with legalized sports betting services seemingly next in line. In hopes of a pro career, college athletes vie for ASM scholarships and tuition, room and board, and other paltry compensations from the NCAA under the banner of amateurism. All while sycophants enjoy roast beef at the Ritz; beachside resorts in the Bahamas; and broker deals with secret handshakes in the most expensive restaurants and locker rooms and strip clubs in the country.

Hot Dog Money

Their story begins in 2013 when Blazer is summonsed to Manhattan to explain defrauding his football star clients of some $2 million dollars. To avoid jail time, Blazer reveals an industry standard within the NCAA called “Hot Dog Money” — plying college athletes with incentives that debunk amateur competition and sportsmanship.

Armed with a recording device to hunt criminal conspiracies inside NCAA sports, Blazer spied on coaches, agents and lawyers to ferret out the industry’s real players like Christian Dawkins, who later acknowledges paying college basketball recruits during his trial in Brooklyn. “We were definitely paying players, yes,” he said. “Everyone was paying players.”

The NCAA, a nonprofit organization that regulates student athletics among approximately 1,100 schools in the United States, split in ’73 into three divisions. It took in almost $1.3 billion in revenue in fiscal year 2023, most of which was generated by the Division I men's basketball tournament.

With a long and established retinue of rules that distinguish college athletics from professional sports, the NCAA historically disallowed, for example, "non-cash education-related benefits," including scholarships and endorsements and internships that might give the appearance of "pay to play.”

But when a consortium of athletes complained the NCAA was profiting off their names and likeness without compensation (O'Bannon v. NCAA) a district judge and Ninth Circuit agreed they were in violation of the Sherman Antitrust Act.

NCAA appeals to the Supreme Court in 2020, asking the High Court to review if or whether the Ninth Circuit's decision enables a "pay for play" culture which they called the “antithesis of amateurism.” Now what college athlete would refuse a $500,000 per semester “internship” with Nike? The Supreme Court weighed in with NCAA v. Alston.

Herewith, the court unanimously sided with college student-athletes in an antitrust challenge to the college-sports association's rules against compensating athletes, whereafter the NCAA quickly changed its policies to allow college athletes and recruits to earn money through endorsement deals and personal appearances. In play was the antitrust principle, a collection of mostly federal laws that regulate the conduct and organization of businesses in order to promote competition and prevent unjustified monopolies.

Hot Dog Money

When Blazer was meeting with conspirators in five-star luxury hotel suites, he launched a cover business called LOYD (Live Out Your Dreams). Like a ball hog with access to hundreds of thousands of FBI dollars, Blazer flushed out the schools, coaches, broadcasters, and network executives just as sports betting itself was becoming legal. In 2018, SCOTUS strikes down the Amateur Sports Protection Act and today 38 states have legalized sports gambling. Which brings us full circle to both Final Four games in Glendale, Arizona and the winners advancing to the national championship game tomorrow.

Despite the hype of March Madness, the NCAA as we know it is doomed. Fact: U.S. bettors are expected to wager more than $2.72 billion on this year's men's and women's national tournaments using legalized sportsbooks, according to the American Gaming Association (AGA).

That's twice the amount placed on the Super Bowl; twice the amount the NCAA ever declared to the IRS; and the symbolic tip-off between the nation's surge in sports betting and their newest national pastime.

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