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NCAA’s credit outlook now negative, in part because of Ed O’Bannon case

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The Ed O’Bannon case could be hurting the NCAA’s credit outlook, according to the Wall Street Journal.

Looks like the case is starting to affect other things outside the courtroom, with the case slowly catching on nationally after a slow start. O’Bannon, a former UCLA player, is looking to help former college players recoup royalties from their likenesses being used in video games.

The report marked the first time that litigation has emerged as a risk in a Moody’s report for NCAA debt. A federal judge in Oakland is weighing a class-action certification for the suit, launched by former UCLA basketball star Ed O’Bannon in 2009, that would add potentially thousands more current and former athletes to the case and expose to the NCAA to greater damages if it loses.

The NCAA’s credit rating has not changed, but  the outlook presents a prediction of what it will be in the near future. This is especially true if the lawsuit O’Bannon is keying gains class status. The credit watch is a prediction that covers the next two years. Their current credit rating sits at Aa2, the third-highest rating available. If the case does gain class status, that would prompt the change, more than likely.

If the O’Bannon case gains class certification, Moody’s says the NCAA could face greater danger of a downgrade from the third-highest Aa2 rating, which would affect $40 million in debt the association took out in 2005 and 2010 to buy rights to basketball’s National Invitation Tournament and renovate its Indianapolis headquarters, among other expenses.

The NCAA is currently staring down $40 million of debt taken from 2005-2010.

Increasing interest in the case was the reason for the report. “We felt the trial has advanced to a point where it was worth looking at the credit again,” said Moody’s spokesman David Jacobson.

Follow David Harten on Twitter at @David_Harten

Syracuse receives mixed news on sanctions appeals

Jim Boeheim
Associated Press
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Wednesday the NCAA made its ruling on two appeals of sanctions made by Syracuse University, with the news being mixed for the men’s basketball program.

On the positive side the NCAA ruled that Syracuse will be docked two scholarships per season for the next four years, as opposed to the original ruling of three. As a result Jim Boeheim’s program only has to account for the loss of eight total scholarships, meaning that they’ll have 11 to fill in each of the next four seasons as opposed to ten.

One scholarship may not seem like a big deal, but in a sport where you only get 13 (when not dealing with sanctions) getting that grant-in-aid back really helps from a recruiting standpoint.

As for the negatives, they both concern Boeheim. Not only has there yet to be a ruling on Boeheim’s appeal of his nine-game suspension that goes into effect when ACC play begins in January (that appeal is being heard separately), but the appeal to reinstate the wins that were vacated as part of the sanctions was denied. As a result Boeheim officially has 868 wins instead of 969 (not counting today’s game against Charlotte).

And with Mike Hopkins set to take over as head coach in 2018, the denial means that college basketball will have to wait quite some time before anyone threatens to join Duke’s Mike Krzyzewski in the 1,000 wins club.

While not having the wins officially reinstated does hurt, getting a scholarship back for each of the next four seasons is a bigger deal when it comes to the long-term health of the Syracuse program. Also of great importance will be the ruling regarding Boeheim’s suspension, as a suspended coach is not allowed to have any contact with his players or coaching staff while serving the penalty.

And with the original ruling due to take up half of Syracuse’s league slate, not having Boeheim (or the chance to speak with him) is a big deal when it comes to this current team.

St. John’s forward Kassoum Yakwe cleared by NCAA

Chris Mullin
AP Photo/Rick Bowmer
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St. John’s forward Kassoum Yakwe has been cleared by the NCAA to play this season and will be eligible immediately, the school announced on Wednesday.

Yakwe is a 6-foot-8 forward that reclassified and enrolled at St. John’s this fall. He attended the same high school as Kansas forward Cheick Diallo, who was also cleared by the NCAA to play today.

St. John’s played in the Maui Invitational this week, and Yakwe did not take part. His first game with the Johnnies will be on Dec. 2nd against Fordham if the program plans to play his this season.

The question that must be asked, however, is whether or not he will suit up or simply redshirt. The Johnnies are in the midst of a serious rebuild and will be without their other elite recruit this season, Marcus Lovett. Lovett was ruled a partial qualifier. Would it make sense to burn a year of eligibility on what make amount to a wasted season, or will head coach Chris Mullin opt to save that year for down the road?