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It should be important to remember though that the NCAA isn't regulation, its a voluntary organization. I'm all for them leaving the NCAA (I think all colleges should leave an organization that exploits players the way it does) and this being handled via litigation. The college benefited from covering up the scandal for a period of years and the victims of Mr. Sandusky have standing to recoup the gain at their expense. There is of course the issue of the players who were recruited during this time and have suffered the punishment (in change in records) for something they were presumably not responsible for. But because Robin Hood gave his money to the poor does not mean the theft is ok or that we shouldn't recover the stolen money.
Not often that I disagree with Mr. Prager (and agree with the NCAA, I feel dirty having said that), but if this incident had been revealed in 1998 there clearly would have been recruiting implications for the team. The benefited by hiding the incident which was their motivation. Limiting the incentives (including I think removing a strong portion of Mr. Paterno's past earnings) is the only logical response to this kind of coverup.
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