The FBI, Corruption, Bribery, and College Basketball’s Biggest Story

This post is written by Symposium Editor Tyler Noonan. Opinions and views expressed herein are those of the writer alone.

When you go to school in Kentucky, you are surrounded by college basketball fans.  Most students either bleed Kentucky Wildcat blue, or Louisville Cardinal red.  With the exception of a few students who make the journey south from across the river in Ohio, students are on one side or the other.  There are no students who root for the state as a whole – you’re either a Wildcat or a Cardinal, but not both.  Here at Northern Kentucky University, fans of these two schools put their hatred aside to cheer on the “little brother” Norse, who, just this past year, qualified for the NCAA Tournament in their first year of eligibility.  All of this goes to say that when there is major news involving one of these schools, it gets people talking.  For law students, that major news is amplified when it involves an FBI investigation, an employment dispute, and a contract claim.  Such is the case of Rick Pitino, a former coach of both Kentucky and Louisville, who was recently fired from the latter.

Pitino, who has a long and well-publicized past record of controversies, was fired on October 16 after being placed on administrated leave on September 26.[1]  The firing was in response to an FBI investigation that resulted in criminal charges being brought against an Adidas executive and numerous college basketball coaches around the country.[2]  Louisville was one of several schools allegedly involved in a conspiracy in which Adidas reportedly offered $100,000 to the families of top high school recruits in order to get them to go to Adidas schools.  In return, Adidas would reap the benefits of the Adidas-sponsored school’s presumed success and national attention.  In addition, if the player were to reach the NBA after their time in college, there was an understanding the player would sign an endorsement deal with Adidas.  Louisville was not the only school involved, but they, and Pitino, were the most high-profile names.

Other than the obvious criminal possibilities, there are several employment matters at play.  You may be wondering why Louisville would place Pitino on administrative leave rather than just firing him from the start – it’s because Pitino’s contract with the university, which made him the highest paid coach in college basketball, was set to pay him $44 million through 2026.[3]  If Louisville were to fire Pitino immediately, the firing would have been for no cause.  If fired for no cause, Louisville would be in breach of the contract and would have to pay Pitino all $44 million.  So, by putting Pitino on unpaid administrative leave, Louisville was preparing to fire Pitino for just cause.  Firing for just cause can only be done – at least in Pitino’s case – after 10 days notice and an opportunity to be heard.  Thus, Pitino was placed on administrative leave rather than being immediately terminated.  If just cause is established, Louisville would only have to pay Pitino through the end of the month in which he was fired (which would amount to about $10,000).  Essentially, whether there is just cause for Pitino’s firing is a $44 million dollar question.

So, does Louisville have just cause?  Louisville can, due to Section 6 of Pitino’s contract, fire him for just cause for “a material violation of the contract or for a refusal or unwillingness to perform the contract to the best of Pitino’s abilities.”[4]  Gregory Postel, the interim president of the university and chair of the University of Louisville Athletic Association (ULAA), offers several ways in which Pitino did not adequately hold up his end of the contract:

“Failure to diligently supervise compliance of assistant coaches; failure to promote an atmosphere of compliance, academic integrity, and ethical conduct within the men’s basketball program; failure to monitor the activities of all assistant coaches and administrators involved with the program who report, directly or indirectly, to Pitino; failure to notify compliance staff of concerns or red flags relating to the “late surprise commitment” of Brian Bowen and failure to notify compliance staff of the presence on campus of investment advisor Christian Dawkins [Bowen is the suspected recruit that accepted the money and Dawkins is another individual facing criminal charges for his role in the conspiracy]; failure to ensure staff cooperation with university, conference and/or NCAA investigations and accept responsibility for maintaining the integrity of the investigation and enforcement process; failure to take responsibility for violations; failure to actively monitor staff’s activities, resulting in the commitment of multiple NCAA level-1 violations; engagement in willful misconduct that caused a major violation of a rule or bylaw of the university, the conference or NCAA; and engagement in willful misconduct that tends to greatly offend the public, causing disparaging media publicity of a material nature that damages the good name of the university.[5]

 

As you can see, the list is long.  Postel pointed out that this support for just cause isn’t just in response to the FBI’s charges – this behavior has been going on for years.  In particular, Postel pointed to a 5 game suspension Pitino was already facing due to a prostitution scandal.  In the past, Louisville’s basketball program had allegedly offered money to prostitutes so that they would have sex with recruits and current players.  Based on all of this – Pitino’s history and these new allegations – it is almost a certainty that just cause for the termination exists.

Pitino, of course, will not go down without a fight.  Pitino is likely to bring a breach of contract claim and could, in addition, bring claims of defamation and tortious interference with business relations.  Some of the potential legal arguments for the contract claim include: a lack of factual verification, as no court of law has confirmed any of the allegations against him; a systematic corruption at the university that caused him to be the scapegoat for the FBI’s allegations; and, an inadequate opportunity to be heard (by saying that all of the press and attention the story has received nationally have made it impossible for him to get a fair hearing).  Pitino can argue defamation by showing the irreparable harm his reputation has received.  However, Pitino, as a public figure, would have to show that those who defamed him did so intentionally or with knowledge that their statements were false.  His tortious interference with business relations claim can be shown by arguing Pitino’s future earning ability is completely diminished.  For example, Pitino had a personal endorsement deal with Adidas.  After Louisville officially fired Pitino, Adidas terminated their contract with him.[6]  It is this type of harm to business prospects that could lead to the tort claim.  However, if the allegations prove to be true, Pitino will have no valid arguments.

Although it appears that Louisville has the upper hand, it may nevertheless be smart to pay Pitino at least a portion of the remaining money on the contract.  If Pitino fights for the money all the way through trial, more information is bound to come out.  Considering it is highly unlikely that Pitino was the only one to know of the alleged payments, the information brought out by trial would almost certainly be harmful to Louisville.  It is entirely possible that a trial could be the start of a whole new wave of problems facing the university.  Thus, it may be better if Louisville just “cuts its losses” and pays Pitino a portion of the contract to stay quiet.

Regardless of the ultimate fate for Louisville and Pitino, one thing is guaranteed: the entire state of Kentucky will be paying close attention.  Interestingly, with Pitino no longer holding the title of college basketball’s highest paid coach, Kentucky’s John Calipari has taken over the top spot.[7]  As a result of this scandal, Calipari’s new title is likely just one of many coming victories for the Wildcats over the Cardinals.

[1] See Michael McCann, Rick Pitino’s Contract Dispute and its Potential Impact on Larger NCAA Scandal, Sports Illustrated (Oct. 14, 2017), https://www.si.com/college-basketball/2017/10/14/rick-pitino-louisville-contract-dispute-ncaa-scandal-fbi-investigation.

[2] See Daniel Rapaport, What We Know About Each School Implicated in the FBI’s College Hoops Investigation, Sports Illustrated (Oct. 2, 2017), https://www.si.com/college-basketball/2017/09/29/what-we-know-about-each-school-fbi-investigation.

 

[3] See Michael McCann, Rick Pitino’s Contract Dispute and its Potential Impact on Larger NCAA Scandal, Sports Illustrated (Oct. 14, 2017), https://www.si.com/college-basketball/2017/10/14/rick-pitino-louisville-contract-dispute-ncaa-scandal-fbi-investigation.

[4] Id.

[5] Id.

[6] See Scott Polacek, Rick Pitino’s Contract with Adidas Terminated Following Louisville Firing, Bleacher Report (Oct. 16, 2017), http://bleacherreport.com/articles/2739027-rick-pitinos-contract-with-adidas-terminated-following-louisville-firing.

 

[7] See Sam Belden, Rick Pitino will reportedly lose out on up to $55 million, Business Insider (Sept. 27, 2017), http://www.businessinsider.com/rick-pitino-effectively-fired-salary-contract-louisville-2017-9.

Author: nkylrev

The Northern Kentucky Law Review, founded in 1973, is an independent journal, edited and published entirely by the students of NKU Chase College of Law.

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