New Life or Sudden Death: What Miami Allegations Mean for NCAA Pay-for-Play Conversation

For the last sixteen months, the 5-foot-5 former “unlikely king of South Beach” has spent plenty of time in his cell in the Hudson County Correctional Center wondering why his friends don’t call or visit and plotting a plan to get back at them for not doing so.

On August 16, 2011, Charles Robinson of Yahoo! Sports brought Nevin Shapiro’s stories from behind bars and instantaneously turned every college sports fan’s stomach sour.

Shapiro is currently serving a 20-year sentence after pleading guilty to orchestrating a $930 million Ponzi scheme.  Shapiro’s Ponzi scheme bilked at least 50 investors out of $50 to $100 million.  In pleading guilty, Shapiro admitted that he used $35 million of his investors’ money to pay gambling debts and make mortgage payments.  While these numbers are enormous, NCAA officials and the University of Miami Athletics Department arguably took greatest notice of the $150,000.00 Shapiro indicated he paid to the University of Miami for an athletic lounge, along with his assertion that he provided cash and gifts to student-athletes. 

Court documents did not expand upon the cash and gifts Shapiro allegedly gave to University of Miami student-athletes.  Void of his lavish lifestyle spent on yachts, drinking at the hottest nightclubs and dining at the finest restaurants, Shapiro, donned in a jumpsuit, confined to the grey walls of a jail cell and eating jail staples like bologna sandwiches, clearly feels slighted by those with whom he previously shared his lifestyle.  Shapiro’s confusion as to where his friends disappeared to after he was locked up are clearly the catalyst for his recent revelations regarding his alleged payouts to University of Miami student-athletes.

Shapiro claims he provided “. . . thousands of impermissible benefits to at least 72 [University of Miami] athletes from 2002 through 2010.”  Shapiro was varied in the benefits he’d allegedly provide:  parties at his homes or on his yacht, dinners at high-end restaurants and night clubs, hotel rooms at some of Miami’s hippest joints, jewelry, and custom tire rims.  The more salacious benefits allegedly provided by Shapiro included:  prostitutes, bounties for taking out opposing team’s players and an abortion.   

Last week, while Charles Robinson was preparing to break the story which will likely break the University of Miami’s Athletic Department one way or another, NCAA President Marc Emmert hosted a summit in Indianapolis, Indiana focused upon issues of fiscal sustainability, academics and integrity in the NCAA. 

The portion of the summit related to fiscal sustainability focused partially upon what has been termed the “pay-for-play” issue.  Pay-for-play relates to the argument that NCAA student-athletes should be paid beyond the cost of their respective scholarships for their collegiate athletic endeavors.

During the course of the summit, Emmert made his position on pay-for-play as clear as possible by stating, “There was an absolute, complete consensus that we would never move to pay-for-play.  No one, including me, believes that paying student-athletes is even remotely appropriate in the collegiate model.”

However, with the surfacing of allegations that one single booster allegedly provided over $1 million in improper benefits to student-athletes, many will likely be questioning whether a pay-for-play model needs to be seriously considered, and ultimately adopted by the NCAA.

If Nevin Shapiro actually provided $1 million worth of improper benefits to student-athletes, what effect do those benefits have on the pay-for-play conversation?

First, there is the argument that payouts like those allegedly made by Shapiro are the crux for why a pay-for-play model must be adopted by the NCAA.  Many arguments are made in favor of pay-for-play by its proponents.  These arguments are largely centered around proponent’s assertions that the enormous contractual revenue obtained by the NCAA requires it to pay its student-athletes and scholarships provided to student-athletes do not cover all of the costs associated with being a student. 

However, Proponents of pay-for-play will likely use the current scandal to raise a less frequently used argument in favor of pay-for-play: pay-for-play eradicates the improper influence of third-parties on a collegiate sports program.  Champions of pay-for-play will quickly point to Shapiro and the money he allegedly spent on student-athletes entertaining them in some of South Beach’s finest haunts as rationale for why student-athletes must be paid for their services.  The logic behind this argument likely flows as follows:  If student-athletes were paid for their collegiate athletic participation, they would not have to rely upon third-parties to reap the benefits like those provided by Shapiro.  The student-athletes would not need someone like Shapiro to buy them dinner, shower them with jewelry or pay for their rims.

If this were an ordinary “impermissible benefits” story–say, one where the third-party supplying impermissible benefits was merely supplying tattoos–the argument above would potentially justify the adoption of a pay-for-play.

But if what Nevin Shapiro alleges is true, he has effectively turned the “impermissible benefits” world on its head.

Any argument using Nevin Shapiro as an example as to why pay-for-play must be adopted fails.

There is not a cohesive contingent of pay-for-play supporters.  There are those who are in favor of providing student-athletes with “full cost of attendance” scholarships, which essentially amounts to giving student-athletes $3,000.00 more per year than they currently receive.  There are others who are more generous in what they desire to give student-athletes through a pay-for-play format and seek to open up the NCAA’s revenue streams to student-athletes while also allowing them to obtain endorsements.  While it is unclear how much student-athletes could obtain monetarily through such a format, as NCAA student-athletes have never obtained more than the scholarship money paid to them, one estimate indicates that “top-flight [Division I] basketball player[s would only obtain endorsements totaling] $300,000.00.”

As noted above, it is unclear what profit a student-athlete would reap if he or she was allowed to be paid for their services under a pay-for-play format.

However, what is clear, is that even if student-athletes were paid, it is unlikely that the amounts dispersed through a pay-for-play format would allow the majority of student-athletes to afford the luxuries allegedly flourished upon University of Miami student-athletes by Nevin Shapiro.

Neither $3,000.00 nor $300,000.00 will purchase a student-athlete a $6.1 million home or a $1.6 million yacht.  An additional $3,000.00 in a student-athlete’s pocket will allow them to be the overnight guest of Miami’s most trendy hotel for several nights.  Or, if the student-athlete does not attend college in a chic metropolitan area, the additional $3,000.00 could provide them with forty or so nights at a hotel of the likes of Best Western. 

Long story short, pay-for-play models like those currently proposed will not allow 99 percent of student-athletes to live like Nevin Shapiro.  Nor will these models allow 99 percent of student-athletes to live like those student-athletes to whom Nevin Shapiro allegedly provided impermissible benefits.

Thus, while Nevin Shapiro possibly caused the death of the University of Miami athletics program, he did not breathe new life into the pay-for-play discussion.

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