As we prepare to watch the best sports tournament of the year, a dark cloud hangs over the 2018 NCAA Men's Basketball Tournament. Some of the top players in the top programs in the country find themselves mixed up in a mess of conspiracy, wire-fraud and tax-evasion charges. All for doing what any kid does when you put a candy bar in front of him.
These kids aren't arch criminals (or at least not white-collar criminals). This stuff is way over their heads. They need some scratch. Most come from disadvantaged economic backgrounds and they can either sling crack rock or they got a wicked jump shot.
Here is a simple way to get these kids paid while maintaining the integrity of these amateur "student-athletes."
A bank loan.
Based on the recent revelations, I will use Dallas Mavericks rookie Dennis Smith Jr. as my baseline. Reports indicate Smith received roughly $117,000 in cash and loans from an agent while at North Carolina State. Since these funds came from some athletic-apparel company and funneled via an agent, it is a violation of both NCAA rules and a myriad of federal laws.
Since the pool of one-and-done basketball players is relatively small, the target for these loans is capped at about 25 pro prospects per year. Nobody is giving tens of thousands of dollars to the kid at the end of the bench.
It isn't difficult to figure out who they are, just look at any pre-season NBA mock draft. Most, if not all, end up in the NBA after one year. To qualify, a borrower would have to be listed as a top-30 prospect in say five nationally recognized mock drafts (ESPN, Sports Illustrated, USA Today and any two others).
The loan would work like this: Since the going rate seems to be around $120k for one year of service, lets give these kids a $120k one-year balloon loan due sometime after the NBA draft, when they sign their rookie NBA contract. The loan could attach a lien on any future earnings.
The main risk variable, of course, is a career-ending injury. This could be mitigated by lets say a $5 million insurance policy, the premiums for which could be taken off the top of the loan in advance. That way, should they suffer some catastrophic injury they can repay the loan and still have plenty of money left over.
This would put some cash in these kids' pocket and remove the need to take any money under the table from some shyster agent. No paper bags stuffed with cash, or worse - an illegal wire transfer to a bank account. Since this is a loan and not income there's no income taxes to pay, just interest, which would be relatively high (15%-18%) meaning they would pay back roughly $138k after becoming a millionaire NBA player.
These kids could get a cheeseburger on a Friday night, buy their Mom a new car or put diapers on their kid. Schools and coaches wouldn't have to wonder how their star player got some $5,000 chain or paid for the tattoos from their knuckles to their neck. And the agents? Fuck them.
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