UPDATE — March 26: On Twitter today, Michael Avenatti revealed the names two high-profile basketball players, one in the NBA and another still in college, who he said were involved in Nike‘s alleged employee misconduct.
The attorney stated on the social media platform that the family of NBA rookie Deandre Ayton, a Puma ambassador, and the handlers of Bol Bol, who plays college ball for the Oregon Ducks (a Nike-backed school), received money from Nike.
Original Story
Attorney Michael Avenatti has been charged with four counts related to extortion by the U.S. Attorney’s Office for the Southern District of New York today after allegedly attempting to extract millions of dollars from Nike Inc.
Court documents state that Avenatti tried to extort $22.5 million from Nike by threatening to reveal evidence that would cause damage to its reputation ahead of the company’s quarterly earnings call and before the start of the annual NCAA basketball tournament. The documents state Avenatti planned to reveal information of misconduct of Nike employees.
Watch on FN
According to court documents, a client of Avenatti, described as the coach of a Nike-sponsored Amateur Athletic Union men’s basketball team in California, had evidence that Nike employees “funded payments to the families of top high school basketball players and/or their families and attempted to conceal those payments.” The coach’s contract with Nike had not been renewed, according to the document.
The documents further state that Avenatti intended to reveal the evidence publicly before the company’s March 21 Q3 conference call, which would negatively affect Nike’s market value, unless Nike paid his client $1.5 million and hired Avenatti and a co-conspirator to conduct an internal investigation of the company.
Today, Avenatti stated in a tweet that he would reveal the info in a press conference tomorrow. He wrote: “Tmrw at 11 am ET, we will be holding a press conference to disclose a major high school/college basketball scandal perpetrated by @Nike that we have uncovered. This criminal conduct reaches the highest levels of Nike and involves some of the biggest names in college basketball.”
Nike has responded to FN’s request for comment.
In a statement emailed to FN, the company said: “Nike will not be extorted or hide information that is relevant to a government investigation. Nike has been cooperating with the government’s investigation into NCAA basketball for over a year. When Nike became aware of this matter, Nike immediately reported it to federal prosecutors. When Mr. Avenatti attempted to extort Nike over this matter, Nike with the assistance of outside counsel at Boies Schiller Flexner, aided the investigation.”
The statement continued, “Nike firmly believes in ethical and fair play, both in business and sports, and will continue to assist the prosecutors.”
Payments involving athletic sneaker brands for top basketball recruits has dominated headlines as of late.
On March 5, Adidas’ former director of global sports marketing James “Jim” Gatto was sentenced to nine months in prison, according to an AP report, for his role in the NCAA pay-for-play scandal that came to light in 2017. The report also stated sports industry business manager Christian Dawkins and former Adidas consultant Merl Code each received a six-month sentence.
During the trial, the trio admitted to channeling secret payments to the families of top recruits in hopes of attracting them to Adidas-sponsored basketball programs.
Want more?
What Impact Could College Athletic Scandals Have on Sneaker Brands?
Nike’s Mark Parker Talks Price Points Less Than $100 on the Radar, Digital Shopping and More
