adidas is involved in a massive NCAA scandal

The FBI announced on Tuesday a massive corruption investigation in the NCAA - the American college basketball - involving college coaches, financial advisors and a representative of adidas, in the person of James Gatto, the head of global sports marketing. Ten people - including legendary coach Rick Pitino, three other coaches, some advisors, and Gatto - were arrested on Tuesday with allegations of fraud and corruption.

The NCAA is a strictly amateur league, so players cannot sign a deal of sponsorship, or earn money although normally they got scholarships and other benefits. Nonetheless, sports brand sponsor the colleges and their teams. The FBI alleges Gatto used adidas money to pay high school students and their families up to six-figure sums to go to adidas-affiliated colleges, and then sign agreements with adidas when they got into the NBA. The FBI alleges Gatto conspired with coaches to do so. The complaint claims payments were disguised on the company's books and paid through management companies. The specific cases involve two college players $100,000 and $150,000 to attend adidas-sponsored schools and, eventually, sign with the brand once they reach the NBA. 

According to investigators, all the action happened during an AAU competition, a summer camp sponsored by big brands where coaches, recruiters, agents and players all in one sitting at the same time — all parties that aren’t supposed to interact. In the investigation, the coaches in question are allegedly captured on wiretaps arranging payments with adidas, a money runner, and an AAU coach to ensure the players in question continue on adidas’ path.

The scandal brings new clouds to a very discussed topic in the US: the influence of big brands on college and amateur school. The hypocrisy of college is the amount of money gained by universities through tv rights, merchandising and sponsors, while the players cannot earn a penny or sign any deal because of the amateur clause. Now the investigation could involve also the NBA, the investigators are acquiring documents regarding sponsorships and contracts.