Is “The U” in deep trouble?

“The U” more commonly known as the University of Miami, has been one of the most storied programs in college sport in the United States over the last few decades.  Most notable has been the several national championships that they have won in college football.  While Miami is not as dominant as they were in the 1980’s and early 1990’s when they won a handful of championships, the program still receives great visibility which in turn leads to a number of high profile recruits.

Of course, this visibility also had led to a lot of people who want to be involved with the program for both good and bad reasons.  One such man, was booster Nevin Shapiro who is currently serving a 20 year prison sentence for his part in a $930 million dollar ponzi scheme.  The ponzi scheme money made its way around town and Mr. Shapiro did use this money and power to help Miami bring in recruits, and even donated some of the ponzi scheme money to the University of Miami.

Yahoo! Sports conducted an 11th month investigation into this, including over 100 hours of jailhouse interviews with Mr. Shapiro.  The allegations which Mr. Shapiro makes has put the program and a number of other individuals in hot water as he claims that he has been helping in recruiting and breaking NCAA rules for around an 8 year period.

While boosters helping with recruiting is nothing new, Shapiro is claiming that in the 8 years, at least 7 football and basketball coaches knew of what he was doing.  And what he was doing includes a list of:

  • Entertaining players and recruits in his multimillion dollar home
  • Cash payments
  • Prostitutes
  • Sex parties
  • Entertaining players on his yacht
  • Trips to expensive restaurants and high-end nightclubs
  • Jewelry
  • Bounties for on-field performance
  • Bounties for injuring opposing players
  • Other travel
  • and an abortion for a girl who was made pregnant by one of the players.

Shapiro has estimated he has spent millions of dollars over the eight year period, and that coaches knew of these incidents.  Things become worse, Shapiro was also a co-owner of Axcess sport agency, which ended up not only representing a number of University of Miami athletes, but also made payments to the athletes as well as funnel cash to several high profile players as a recruiting tool for the sport agency.

The Yahoo! Sports investigation is quite lengthy, but I encourage everyone to read it here.  If even a fraction of what has been uncovered is found to be true, not only is this damning of the University of Miami athletics, but the administration as well.  Yahoo! Sports included a photo of the University of Miami president Donna Shalala and former basketball coach Frank Haith (now at the University of Missouri) with Nevin Shapiro presenting them a donation check.  Shapiro said that all the money for that check came from his ponzi scheme money. (see image to the right)

So what will be done?  The NCAA is currently investigating, but there are a number of potential financial implications here.  First, with ponzi scheme money having gone into the University of Miami and the athletic department, it is quite possible that victims of the ponzi scheme could go to court and try to get some of this money back from the university.  This is similar to victims of the Madoff ponzi scheme going after the New York Mets to get money from them which was supposedly part of the ponzi scheme.  Second, the NCAA is most likely going to enforce some severe sanctions, losses of scholarships for multiple programs, potential loss of postseason play for a number of years.  These will all hurt “The U”, as this will mean less high profile recruits to the school, potentially a weaker program, and thus less revenue from booster and alumni donations, less marketing and sponsorship revenue, and a host of other channels of revenue that could be severely hurt.

While I think the NCAA will not go as far as imposing the “death penalty”, I have heard the word mentioned in several articles and on both CNN, ESPN, and ESPN radio this morning.  If a death penalty were to come, this could really hit the athletic department severely, as football is the main source of revenue generation for them, and could lead them down the same road as South Methodist University who is still trying to recover from their death penalty 23 years later.

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One Response to Is “The U” in deep trouble?

  1. Yajur says:

    It’s worth remembering that this certainly isn’t the first time Miami has caused people to wonder if they should end their football program.

    http://sportsillustrated.cnn.com/vault/cover/featured/9487/index.htm

    Plus ça change…

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