College Sports Faces Bribery Scandal After Conviction of Adidas Marketers

January 25, 2021 by Tom Ramstack
College Sports Faces Bribery Scandal After Conviction of Adidas Marketers

A federal court in New York on Friday upheld the convictions of three Adidas shoe company executives for paying bribes to basketball recruits to direct them to specific universities.

The bribes were to ensure the recruits signed with Adidas-sponsored schools. If they later turned pro, they also agreed to endorse Adidas products.

Federal prosecutors successfully argued the marketing scheme violated NCAA rules, similar to the earlier bribes paid by parents to coaches to get their children into good schools under fraudulent athletic scholarships.

The prosecutors said the payments to recruits or their families defrauded the universities of their right to recruit athletes eligible under NCAA rules. The recruits were headed to the University of Louisville, North Carolina State University and the University of Kansas.

They also convinced the court that the executives behind the scheme, former Adidas marketing head Jim Gatto, former Adidas consultant Merl Code and sports agent Christian Dawkins, knew they were committing illegal acts.

The three men denied knowing there was anything wrong with the payments.

Instead, they claimed they were trying to ensure the schools won top athletes. They also said the universities knew they were making the payments or intentionally avoided checking them out.

Their allegations that school officials knowingly overlooked the pay-to-play scheme was supported by a statement from the U.S. attorney who led the prosecution.

Joon H. Kim said when the charges were announced Sept. 26, 2017, “The picture of college basketball painted by the charges is not a pretty one – coaches at some of the nation’s top programs taking cash bribes, managers and advisors circling blue-chip prospects like coyotes, and employees of a global sportswear company funneling cash to families of high school recruits.”

He added, “Month after month, the defendants allegedly exploited the hoop dreams of student-athletes around the country.”

Similar to the 2019 Varsity Blues scandal in which 50 wealthy persons were charged with bribing coaches to get their children into the nation’s best schools, the allegations against Adidas executives raised concerns over the role of money in college sports. Prosecutors estimated the total amount of bribes paid in the Varsity Blues scandal — including by Hollywood stars Felicity Huffman and Lori Loughlin — at $25 million.

Corporations like Adidas sometimes pay universities millions of dollars per year for marketing rights, which can include putting logos on flat surfaces at sporting events, hanging banners in rafters, sponsoring fan festivals and half-time giveaways.

Adidas GM, a sportswear company, is one of the nation’s largest sponsors of college sports teams. Others include Coca-Cola Company and Ford Motor Company, Nike Inc. and Under Armour Inc.

Schools with the best athletes and playing records get the most air time on television, which means their corporate marketing is seen by a greater number of potential customers.

The Center for Research in Intercollegiate Athletics at the University of North Carolina estimates universities will receive $500 million this year for selling their marketing rights. The deals included a 10-year $150 million marketing deal for the University of California at Los Angeles.

Gatto, Code and Dawkins said they were merely doing what marketing executives are hired to do, namely helping their company by building relationships with top athletes who could bring further marketing and endorsement opportunities if they become professional athletes.

Judge Denny Chin of the Second Circuit disagreed when he announced that the men’s appeal of their convictions was denied.

“The ends, however, do not justify the means, and that others are engaging in improper behavior does not make it lawful,” Chin’s written opinion said.

“Here, as the jury could have reasonably found, defendants deprived the universities of property — athletic-based aid that they could have awarded to students who were eligible to play — by breaking NCAA rules and depriving the universities of relevant information through fundamentally dishonest means,” Chin added.

The universities continue to face possible sanctions for violating NCAA rules based on preliminary evidence they knew about the bribes.

The case is USA v. James Gatto, Merl Code and Christian Dawkins, case numbers 19-0783, 19-0786 and 19-0788, in the U.S. Court of Appeals for the Second Circuit.

A+
a-
  • Adidas
  • bribery
  • College Sports
  • law
  • In The News

    Health

    Voting

    Sports

    Willie Mays Appreciation: The 'Say Hey Kid' Inspired Generations With Talent and Exuberance

    SAN FRANCISCO (AP) — Long after “The Catch” and his 660 home runs, and the daring sprints around the bases with his... Read More

    SAN FRANCISCO (AP) — Long after “The Catch” and his 660 home runs, and the daring sprints around the bases with his hat falling off, Willie Mays could still command a room like no other. Mays was a frequent visitor to the downtown ballpark in San Francisco at... Read More

    June 20, 2024
    by Tom Ramstack
    Washington Commanders Settle Lawsuit Alleging Team Withheld Ticket Holders’ Deposits

    WASHINGTON — Virginia’s attorney general this week announced a $1.3 million settlement with the Washington Commanders after the football team... Read More

    WASHINGTON — Virginia’s attorney general this week announced a $1.3 million settlement with the Washington Commanders after the football team was accused of improperly withholding deposits by season ticket holders. The Virginia settlement, which is the largest so far, follows similar settlements with the attorneys general... Read More

    June 14, 2024
    by Tom Ramstack
    Congressional Bill Would Prevent Student Athletes Being Employees

    WASHINGTON — A U.S. House committee approved a bill Thursday that would prevent student athletes from being categorized as employees... Read More

    WASHINGTON — A U.S. House committee approved a bill Thursday that would prevent student athletes from being categorized as employees of their universities. A National Labor Relations Board judge ruled in February that student athletes were university employees, thereby allowing them to earn salaries and to... Read More

    June 14, 2024
    by Dan McCue
    GOP Wins Fourth Straight Congressional Baseball Game

    WASHINGTON — The Republicans soundly defeated their Democratic colleagues in the annual Congressional Baseball Game Wednesday night, the final score... Read More

    WASHINGTON — The Republicans soundly defeated their Democratic colleagues in the annual Congressional Baseball Game Wednesday night, the final score being 31-11. The number that really mattered, however, was the record $2.2 million the game raised for local charities. Next up is the 16th annual Congressional... Read More

    A Cricket World Cup Is Coming to NYC's Suburbs, Where the Sport Thrives Among Immigrant Communities

    EAST MEADOW, N.Y. (AP) — A towering stadium boasting 34,000 seats and a precisely trimmed field of soft Kentucky bluegrass... Read More

    EAST MEADOW, N.Y. (AP) — A towering stadium boasting 34,000 seats and a precisely trimmed field of soft Kentucky bluegrass is rising in a suburban New York park that will host one of the world's top cricket tournaments next month. But on a recent Saturday morning,... Read More

    March 25, 2024
    by Tom Ramstack
    DC Attorney General Warns Sports Teams About Relocating to Virginia

    WASHINGTON — The District of Columbia’s attorney general is invoking a contract provision with local professional sports teams in the... Read More

    WASHINGTON — The District of Columbia’s attorney general is invoking a contract provision with local professional sports teams in the city’s latest bid to keep them from relocating to Northern Virginia. D.C. Attorney General Brian Schwalb told Monumental Sports and Entertainment in a letter last week... Read More

    News From The Well
    scroll top