College Basketball Indictments: Adidas, Thy Name is Banned ‘Runner’

Adidas’ head of worldwide marketing, Jim Gatto, was one of the ten people indicted last month for involvement in what was alleged to have been conspiracy, fraud, and bribery surrounding four named schools, and several other schools which were unnamed, but implicated. Gatto, according to the indictment, allegedly committed to funnel a total of $100,000 to recruit Brian Bowen, as a part of a scheme which apparently encouraged Bowen both to sign to attend and play for Louisville, but also to hook-up with one or more agents or financial advisors. (Louisville has long had an apparel-supply contract with Adidas; that contract was renewed this year, providing for an Adidas payment of $170 million over ten years.)

 

Gatto

Adidas Worldwide Head Of Marketing Jim Gatto

 

In response to these indictments, NCAA president Mark Emmert has appointed an independent commission, headed by Condoleeza Rice, to recommend changes in the NCAA system. But Emmert and his NCAA may be getting a little ahead of themselves, by not recognizing the need to act with some swiftness to address issues raised by Adidas’ conduct (and, possibly, the conduct of Nike, since Nike has recently been served with a subpoena for production of documents.)

Yesterday I wrote that, if it is true that Adidas made payments directly to a player, the company probably functioned as a Booster under NCAA bylaws, which would necessitate banning the company from any further contact with Louisville and, therefore, require Louisville to sever its contract with Adidas.

Adidas also mostly likely functioned as a “runner” under NCAA rules.

Background

First, a little background. A number of NCAA enforcement decisions have roundly condemned the on-campus presence of “runners”: persons paid by a third party to ‘run’ after players on campus, in order to persuade the player to do something of benefit to that third party, who is usually an established professional players’ agent. Most often the runner’s persuasion of the player includes a gift, payment, or loan to that player, to encourage him to eventually sign an agency contract.

In a 2011 NCAA enforcement case involving Georgia Tech, for example, an NCAA staffer had received a tip that such a runner had been spied on campus, providing free clothing (the horror!) to two prominent Tech football players. The decision by the NCAA’s Committee on Infractions excoriated those ‘runners,’ and sanctioned the school and its athletic department employees. And in a March 2012 decision involving the University of North Carolina, as another example, the NCAA Committee on Infractions gravely warned of a shady world inhabited by agents and their runners.

The situation involving agents and their ‘runners’ supplying impermissible benefits to the seven student-athletes is a window into the often unscrupulous world inhabited by those who look to cash in on potentially lucrative future professional contracts to be signed by gifted & talented student-athletes.

Pursuant to Bylaw 12, any ‘student-athlete’ (anyone participating in or who may be eligible in the future to participate in a sport) may not agree verbally or in writing to be represented by an athlete agent in the present or in the future, for the purposes of marketing the student-athlete’s ability or reputation.

Adidas As Two Kinds of Runner

Gatto likely functioned as such an illegal (under NCAA bylaws) runner, in two respects. First, he can be seen as having been a “runner” for his employer, Adidas, by locating and paying Brian Bowen money, as a means of encouraging Bowen not only to sign with Louisville, with whom Adidas has a promotional contract, but also as a vehicle to encourage Bowen to sign with Adidas after his departure from Louisville (whether after a ‘one-and-done’ year there, or after some lengthier period.)

Second, depending upon factual detail which may become more clear as the indictments proceed, it appears that Gatto may also have been simultaneously “running” for Snood and Dawkins (the agent and financial advisor linked to the schemes described in the indictments.) Using this theory, the money passed by Gatto to Bowen had the same aim as the clothing provided by the runner at Georgia Tech whose actions were so heavily criticized by the Committee on Infractions in 2011: to encourage a player to eventually sign with a third-party who held himself out as a classic player’s ‘agent’. (The difference in scope is more than relevant: the Tech players got some apparel; Bowen would, apparently, be receiving $100,000.) In this scenario, Gatto and Adidas were, like the runner in the UNC case, presumably “looking to cash in on a lucrative professional contract” which they expected Brian Bowen would soon be signing.

The NCAA does not like Runners. Like Boosters, they are frequently banned from campus. Adidas, thy name is also Banned Runner.

 

Copyright William Wilson 2017

About brewonsouthu

Michigan and Big Ten fan, former lawyer, with interest in college sports and NCAA oversight and decisions, and sports generally.
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