Menu
Colleges

FBI Indictments Made In College Basketball Corruption Case That Rocks Sport

Coaches at some of the most storied programs in college basketball and Adidas are at the "center of federal allegations that if proven true could shed light on the lucrative worlds of sports management and apparel contracts and underscore the power coaches wield over top recruits," according to a front-page piece by O'Brien, Cohen & Germano of the WALL STREET JOURNAL. In one of several alleged schemes outlined yesterday by federal prosecutors in N.Y., a top Adidas exec "worked with others including a sports agent and a financial adviser to funnel tens of thousands of dollars to the families of high-school recruits to induce them to sign with major-college programs including Louisville." In exchange, prosecutors said that they were "expected to sign with the agent and adviser and, when they turned pro, choose Adidas as their sponsor." Criminal charges against Adidas Dir of Global Sports Marketing James Gatto and others were unsealed yesterday as part of a "sweeping crackdown on alleged corruption." The case also "involved alleged bribes paid to assistant coaches" at Arizona, Oklahoma State, USC and South Carolina. Four assistant coaches at big-time college basketball programs yesterday were "arrested and charged," including Auburn associate coach Chuck Person. Auburn and the other universities involved in the allegations "suspended the four coaches" yesterday. They said that they were "surprised by the investigations" (WALL STREET JOURNAL, 9/27).

CORRUPTION DETAILS: SI.com's Dan Greene noted the details of the Person investigation are "particularly insightful and damning, a perfect window into the distorted power dynamics of collegiate athletics." Person told a financial advisor, who was cooperating with law enforcement, that an NBA prospect on Auburn’s roster "listens to one person ... That’s me, yep" (SI.com, 9/26). In Portland, Jeff Manning in a front-page piece reports investigators allege Gatto "engineered a $100,000 payment to the family of [an] Indiana high school player to ensure he agreed to play" for Louisville. They also "allege he participated in a $150,000 bribe to convince another athlete to attend an Adidas-sponsored school in Florida" (Portland OREGONIAN, 9/27). ESPN.com's John Gasaway reported former Pittsburgh-based financial advisor Louis Martin "Marty" Blazer III is the witness who "cooperated with the FBI in its investigation of the coaches and other defendants" (ESPN.com, 9/26).

ASM SPORTS INVOLVED: In N.Y., Corey Masisak notes the investigation also involved N.Y.-based athlete representation firm ASM Sports, whose offices were "raided" by the FBI yesterday. The FBI during the raid "seized" ASM Founder Andy Miller's computer. ASM is "one of the biggest agencies that represents NBA players." Christian Dawkins, formerly an agent for ASM who was recently fired for racking up $42,000 in Uber charges on an unnamed NBA player’s credit card, also was "among the 10 people arrested" yesterday. The agency currently lists 47 players on its roster of clients, including Knicks F Kristaps Porzingis (N.Y. POST, 9/27). Dawkins, in the process of forming ASM, told one of the coaches that if the scheme was set up properly, “We will own college basketball” (L.A. DAILY NEWS, 9/27).

JUST THE BEGINNING: In Indianapolis, Zach Osterman writes it is not so much that yesterday "potentially changed college basketball -- and perhaps college sports -- forever." Osterman: "It’s that we genuinely have no idea how yet, because this feels like a beginning, not an end" (INDIANAPOLIS STAR, 9/27). In L.A., Nathan Fenno in a front-page piece writes the investigation is "far from over," as the FBI has "set up a tip line for those with more information" (L.A. TIMES, 9/27). In N.Y., Marc Tracy notes the complaints "depict a thriving black market for teenage athletes, one in which coaches, agents, financial advisers and shoe company employees trade on the trust of players and exploit their inability to be openly compensated because of NCAA amateurism rules." U.S. Attorney for the Southern District of New York Joon Kim during a press conference yesterday said, "For these men, bribing coaches was a business investment." He called the bribery part of the "dark underbelly of college basketball.” NCAA President Mark Emmert was "caught off guard" by the announcement, but "pledged his organization’s support." Yesterday's revelations all but "ensured a renewed debate about two rules central to college basketball." One is the NCAA’s "longstanding restrictions on compensation," while the other is on the one-and-done rule (N.Y. TIMES, 9/27).

DOMINOES MAY FALL: USA TODAY's Lindsay Schnell in a front-page piece writes the "most alarming note" is that the investigation is "ongoing, which means there is potentially more fallout and more arrests to come" (USA TODAY, 9/27). In Kentucky, John Clay writes yesterday's "bombshell may easily mushroom" (LEXINGTON HERALD-LEADER, 9/27). In Richmond, Paul Woody writes, "That dark underbelly might be much bigger than Kim imagines. The dark underbelly might be obese" (RICHMOND TIMES-DISPATCH, 9/27).

NOT A GOOD LOOK: YAHOO FINANCE's Daniel Roberts wrote under the header, "NCAA Bribery Scandal Could Not Come At Worse Time For Adidas." The brand right now is "flying" and "actively focusing on signing more big universities to long-term sponsorship deals." There is "reason to believe that Adidas’s drive to sign new collegiate deals was a key factor in what the FBI alleges: none of the four schools mentioned in the complaint are Adidas-sponsored schools." Arizona, Oklahoma State, and USC are Nike-sponsored, while Auburn is with Under Armour (FINANCE.YAHOO.com, 9/26). The WALL STREET JOURNAL's Sara Germano writes the allegations could "undermine" Adidas' recent sales rebound in the U.S. (WALL STREET JOURNAL, 9/27). CNBC’s Brian Sullivan said Adidas “may have some answering to do” with regard to the scandal (“Power Lunch,” CNBC, 9/26). SW Retail Advisors President Stacey Widlitz said despite Adidas getting a “negative PR headline" from the scandal, when the “footwear consumer is thinking about purchasing decisions, it’s all about innovation and it’s all about who has the hot, cool products, who has the best celebrities or sports figures associated with them. So I think it’ll be a very short-term blip and probably a distant memory very quickly” (“Worldwide Exchange,” CNBC, 9/27).

TWITTER REAX: Pepperdine sports law professor Alicia Jessop tweeted, "Noteworthy: The FBI says its NCAA basketball investigation began in 2015, a year in which adidas signed top programs away from Nike." Raleigh-based WCMC-FM's Joe Ovies: "It’s all fun and games until your favorite school gets exposed in this mess." Goodwin Sports' Nate Jones: "Kinda wild that the FBI does the NCAA's bidding. Like, bruh, there are much more important things to put those resources towards." The AP's Tim Reynolds: "A rough count of the amount of schools in this FBI/college hoops thing today has me lifting Siena to a 3 seed in next year's NCAA tourney."

SBJ Morning Buzzcast: March 25, 2024

NFL meeting preview; MLB's opening week ad effort and remembering Peter Angelos.

Big Get Jay Wright, March Madness is upon us and ESPN locks up CFP

On this week’s pod, our Big Get is CBS Sports college basketball analyst Jay Wright. The NCAA Championship-winning coach shares his insight with SBJ’s Austin Karp on key hoops issues and why being well dressed is an important part of his success. Also on the show, Poynter Institute senior writer Tom Jones shares who he has up and who is down in sports media. Later, SBJ’s Ben Portnoy talks the latest on ESPN’s CFP extension and who CBS, TNT Sports and ESPN need to make deep runs in the men’s and women's NCAA basketball tournaments.

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Daily/Issues/2017/09/27/Colleges/NCAA-FBI-Details.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Daily/Issues/2017/09/27/Colleges/NCAA-FBI-Details.aspx

CLOSE