Photo Credit: Ralf Finn Hestoft – Getty Images
This Tuesday, the FBI arrested several NCAA basketball coaches and a top marketing executive from Adidas for allegedly participating in bribery and illegal rendezvous!
The FBI claims the Director of Global Marketing for Adidas Basketball – Jim Gatto reportedly paid hundreds of thousands dollars in bribes to top prospects to Adidas sponsored colleges, including Louisville.
Basketball coaches, managers, and financial advisors have been arrested as well.
According to the complaint, Gatto allegedly cooperated with coaches to pay the high school athletes. The investigations have been underway since 2015; they were led by the US Attorney’s office for the Southern District of New York and the FBI as a total of three separate complaints have been filed.
Gatto and four other defendants have been charged with “making and concealing bribe payments” to high school athletes and/or their families. In one instance Gatto and defendants reportedly funneled about $100,000 dollars to the family of a high school basketball player to persuade the player to sign with a “public research university” in Kentucky. The university is not named, but based on the details provided, it is likely Louisville, which signed a $160 million sponsorship in August with Adidas.
An Adidas spokesperson said in an email to Business Insider , “Today we became aware that federal investigators arrested an Adidas employee, we are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”
The FBI says they have wiretapped phone calls with Gatto (Adidas rep) and his accomplices in the act.
“The investigation has revealed multiple instances of bribes paid by athlete advisors, including financial advisors and business managers, as well as high-level apparel company employees, and facilitated by coaches employed by NCAA division 1 universities, to student-athletes playing at or bound for NCAA D-1 universities, and the families of such athletes, in exchange for a commitment by those athletes to matriculate at a specific university and a promise to ultimately sign agreements to be represented by the bribe-payors once the athletes enter the NBA.” – FBI
Sportswear giants are in constant multi-million dollar battle for top-tier basketball teams. The visibility of being worn by a certain team or high-profile player in this market is a valuable marketing opportunity for apparel companies, despite the fact that NCAA players cannot be paid to endorse brands.
Sounds messy, but hopefully Adidas cleans this up quick as the college basketball season is quickly approaching!