Sunday, May 31, 2020
May 31, 2020

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Adidas, Nike officials charged in basketball corruption case


Portland — Sports marketing officials at Adidas and Nike were among those charged Tuesday morning in a sweeping bribery and corruption case that struck at the heart of college and youth basketball.

The criminal case enveloped a senior executive at Adidas. Jim Gatto, who identifies himself as Adidas’ head of sports marketing on his LinkedIn page, was accused of conspiring with coaches to pay high school athletes to play for colleges sponsored by his company.

The case was filed after a two-year FBI investigation. Several basketball agents and college assistant coaches were also charged in the case.

Also charged was Merl Code, who once headed a junior basketball league for Nike. In a July 2013 letter from Code to participants in a LeBron James Skills Academy, Code identified himself as elite youth director of Nike basketball.

Gatto, 47, allegedly engineered payments of $100,000 to the family of a Kentucky high school player in return for attending Louisville and participated in another $150,000 bribe to another player to convince him to attend an Adidas-sponsored school in Florida.

Gatto lives in the Wilsonville and has worked for Adidas for 23 years, according to his LinkedIn page. He could not be reached for comment.

Adidas officials said they had just learned of the charges Tuesday. “Today we became aware that federal investigators arrested an Adidas employee,” company spokesperson Lauren Lamkin said in a written statement. “We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”

Neither Code nor Nike could be reached for comment.

Sneaker companies have for decades been a major force in the business of college basketball, signing multi-million deals with individual universities that puts their logo on school uniforms. Some of the higher-profile coaches have their own deals with the companies.

Just last week, Adidas announced a long-term extension of its deal with the University of Kansas through the year 2031.

Over time, in their quest for the hearts and minds of basketball’s best players and most avid fans, Nike and Adidas extended their reach downward to youth basketball. Each company sponsors elite AAU teams and high-level camps for players.

Nike has long ruled the basketball endorsement business, just as it dominates the athletic footwear and apparel industry. But a resurgent Adidas has made strong gains in the past three years, in part at Nike’s expense.