• Villanova Sports Law Blog

How the Recent Outcome of the Federal Trial Will Affect the NCAA Moving Forward

By Rich Chakejian:

As the story regarding several of the NCAA Men’s College Basketball programs continues to unfold, a major decision was made within the last week. The federal court for the Southern District of New York recently imposed a guilty verdict for three defendants being tried for allegations of fraud previously made against them.[1] The three defendants in the case were James Gatto, Adidas former head of global basketball marketing, Merl Code Jr., former Adidas employee, and Christian Dawkins, an agent for professional athletes.[2] These three men are the first to experience the consequences from the ongoing FBI investigation regarding this issue of paying young men to attend certain Adidas affiliated schools. Although there has been punishment distributed for these three men and this individual case, it is reasonable to expect more fall out from this situation.


From a legal standpoint, Ted Diskant, is arguably the most important figure in this problem. As the federal prosecutor recently secured convictions against Gatto, Code, and Dawkins, it is likely that Diskant will continue to pursue others who were mentioned in wake of the allegations that arose from the FBI investigations.[3] “Ted is in the driver’s seat right now, there is no question,” said one attorney involved in the case. “This could be the end, or this could be the beginning.” [4] This quote from an attorney involved in the case is especially intriguing because it highlights the major decision that Diskant has the opportunity to make. If he decides to pursue this matter further, it will only complicate matters more for the biggest stakeholder in this issue, the NCAA. Currently, neither the recently finished trial nor the pending trial in February has involved some of the big, brand name head coaches, they have primarily featured third-party actors from outside NCAA programs.[5] However, Diskant has the ability to pursue some of the biggest names within the sport for criminal violations, including Bill Self and Sean Miller.


As the NCAA begins to prepare for the start of the men’s college basketball season next week, it should serve as a bittersweet feeling for the organization. There is plenty reason to be wary of the overall state of men’s division 1A college basketball moving forward. The NCAA inevitably will have to begin to weigh their options in taking action against the named programs.[6] They will be forced to make tough decisions that will directly impact some of their largest brands. In predicting the action the NCAA will take, it is helpful to look back upon their previous decisions involving paying players. Some examples include, University of Southern California, University of Miami, and Southern Methodist University. These three instances all were financially related, as they involved the improper payments of collegiate athletes. [7] While the three of these universities all received severe sanctions against their programs, Southern Methodist received the “death penalty” for their involvement in paying their players. [8]


Despite the example of SMU being one the most severe cases in NCAA history, it is not unreasonable to consider this as a possibility that will arise when the NCAA decision makers begin to discuss punishments for the programs involved. As illustrated by the case of SMU, the NCAA has clearly taken a hard stance on paying their amateur athletes, and that is precisely the issue that stands before them today. So, it will be interesting to keep an eye on the direction they decide to take. While there should be no questions as to whether these programs deserve sanctions placed upon them for their involvement in violations of NCAA rules and federal laws, the most compelling decision will be the severity of the sanctions. They are dealing with some of their biggest brand names in college basketball, Louisville, Kansas, and Arizona. In determining the sanctions the committee making the decisions will likely ask themselves questions concerning, how much punishment is enough, and how much further action should we take in attempting to uncover who else is involved.


As the saying goes, “where there’s smoke there’s fire”, the NCAA has plenty of indicators from the trial and investigation that there are many other top programs and coaches who potentially may be involved in this as well. However, it is likely they will take a passive approach and only punish those who have been directly named within the criminal trials as programs who engaged in the illegal practice of paying recruits, instead of pursuing the other programs who have been speculated to also engage in this practice.


In conclusion, the recent ruling provided by the court for the Southern District of New York is likely only the tip of the iceberg of the trouble to come for the NCAA and the state of men’s division 1A college basketball.


[1] Mark Tracy, Three Found Guilty in NCAA Basketball Recruiting Scheme (October 24, 2018) https://www.nytimes.com/2018/10/24/sports/ncaa-basketball-adidas-guilty.html

[2] Id.

[3] Dan Wetzel, After Hoops Corruption Trial Verdict, How Much will College Basketball’s Most Powerful Man Shake Up the Sport? (October 24, 2018)

https://sports.yahoo.com/hoops-corruption-trial-verdict-much-will-college-basketballs-powerful-man-shake-sport-033237260.html

[4] Id.

[5] Id.

[6] Rachel Bachman and Andrew Beaton, The Criminal Trial is Over, Will Sanctions Follow? (October 25, 2018) https://www.wsj.com/articles/the-criminal-trial-is-over-will-ncaa-sanctions-follow-1540486669

[7] Alan Rubenstein, The 25 Biggest Scandals in NCAA History (September 20, 2010) https://bleacherreport.com/articles/468221-the-25-biggest-scandals-in-ncaa-history

[8] Eric Dodds, The ‘Death Penalty’, and How the College Sports Conversation has Changed (February 15, 2015) http://time.com/3720498/ncaa-smu-death-penalty/