Should Agents be Permitted to Give College Athletes Loans?

| by

Last week, SI writer Andy Staples wrote about a proposal to allow athletes to get loans from agents. Staples article was based on a book by a former agent named Josh Luchs, who Staples describes as "a former agent who spent about half of his career breaking all those NCAA rules against paying players."

Here is an excerpt from the book "Illegal Procedure".

A few key points:

- agents who wish to participate would get certified

- interest rates would be set at or above below value

- agent and marketplace determine how much it makes sense to lend

- if players career did not pan out then agent would have no recourse to reclaim money

Some quick thoughts.... From a players perspective this is a good thing because it would put money into the pockets of some people who need it. There has been a swelling call for colleges to play players because of the huge amount of money that players are bringing to the power brokers of college football. Does this answer that question? I don't think it does.

However, when you look past the surface this is simply another form of a "student loan" but it's being funded by people (agents) that are seen (although not always true) as one of the lowest forms of human life. The points that Josh has laid out in the excerpt make sense. If followed to the letter of the law and to a tee then it might just work. But in life, when is everything followed to the letter of the law?

I would be totally against this proposal except for this one point, "If the player's career did not pan out, if he were not drafted or signed, then the agent would have made a bad investment without recourse." But what does that mean. Does that mean that a seventh round draft pick would still owe 100% of his loan? Obviously, a guy drafted in the fourth round would not have the same recourse to repay a loan as a guy drafted in the first round.

I think the whole "loan" deal (other than being a way for Josh to make money selling books) puts all the power in the hands of the agents and makes them a true power player in college sports. What else would we expect from a former agent. There are currently 123 teams in the FBS. The scholarship limit is 85. That's 10,455 players (not counting red-shirts, players who receive extra eligibility, etc). There are 32 first round draft picks (128 over a four year period). Doing the simple math, in a four year period about 1% of college FBS level players will be drafted in the first round. The first round is where the money is.

If there is anything we've learned about pro athletes, it's that there is a scary amount of players that simply don't know how to manage their money and burn through it rather quickly. That's generally after they've been in the pros and gotten paid. Now we are going to have agents pay 17 to 22 year old kids and expect that they are going to be more responsible than the pros. I see this as a recipe for disaster. I like the idea of kids getting paid for their hard work but this is not the answer.

It's easy to just shoot an idea down and say it doesn't work but what I will say is that if we are serious about college athletes getting paid more than their scholarship then it has to be within the system we already have (broken or not). We simply can't give agents more power than they already have and expect them to do everything by the letter of the law and do right by these kids and to expect the kids to do the right thing when given this extra money. We all remember when we were 17-22. What kind of crazy stuff would we have gotten into if we were allowed to get extra money on the promise of paying it back if our career panned out?

So how should it happen? The NCAA should bookmark a percentage of their profit (whether it be their overall profit or out of individual conferences or schools) and there should be a board put together of former players and headed by a former AD. Players would be able to apply for an extra stipend based on their families socio-economic status. Give the money to the kids that need it not the kids that want it but don't need it. Give it to the kids that need the money to make sure that their families are making it through the tough economy and that need the extra money at school. Not the kid that was born on third base and just wants the extra money to drive a Porsche around school. And don't make the kids pay the money back. The stipend would be for those that need it and it would be their money, they wouldn't owe their servitude to an agent once they graduated from school or declared from the draft.

I'm in favor of paying college athletes who have a need for the money, not just the ones that are worthy of being coveted by an agent.

I'm all for differing perspectives so for a different perspective check out our buddy Michael Felder's article from his new digs over at the Bleacher Report. His perspective is that of a former college football player.