Nearly 40 years ago, a Nike marketing wiz named Sonny Vaccaro began paying college basketball coaches $5,000 apiece to dress their players in Nike footwear, turning the athletes into unpaid sponsors for the shoemaker’s signature swoosh.
College athletics would never be the same. Coaches by the dozens enlisted in Vaccaro’s arrangement, their compensation rapidly climbing. The nation’s universities later joined the bonanza, striking deals with the major shoemakers that have enriched many of the schools by millions of dollars a year.
Now, billions of sneaker sales later, a three-year FBI investigation into the corporate influence in college athletics has evolved into a watershed scandal that has laid bare the seedy role of big money in amateur sports and shaken the system from top to bottom.
Criminal charges are pending, and heads are rolling, most notably with the University of Louisville placing head coach Rick Pitino, one of the giants of college basketball, on unpaid administrative leave, effectively a firing.
The scandal is expected to widen, a potential crisis for universities across the country — and a moment in history that Vaccaro, once considered the godfather of the sneaker wars in college sports, says he never envisioned.
“It would have been impossible for anyone to imagine what this has evolved into,’’ the 78-year-old Vaccaro said in an interview. “All I was doing was paying coaches so the athletes would wear our shoes and people would want to buy them.’’
Federal indictments unsealed Tuesday allege that 10 individuals and a number of unindicted figures connected to nearly every level of the sneaker industry and collegiate basketball conspired to exploit amateur athletes. Those facing charges include shoe company employees, assistant coaches at four major universities, an agent, a financial adviser, an AAU program director, and a former NBA and collegiate referee who founded his own clothing company.
“You have everybody at the table in this scandal,’’ Vaccaro said. “You have the perfect storm of commercialism taking over amateurism in college sports.’’
Colleges across the country face pressure to secure the best possible players, in part because of the financial relationships they have forged with shoe companies. UCLA, for instance, has a 12-year, $280-million contract with Adidas, while Boston College is in the midst of a long-term deal with Under Armour that Forbes has valued at $2.5 million a year.
There is no indication that BC or UCLA is tied to the scandal.
“For the 10 charged men, the madness of college basketball went well beyond the Big Dance in March,’’ said Joon H. Kim, the acting US attorney in Manhattan. “Month after month, the defendants allegedly exploited the hoop dreams of student-athletes around the country, treating them as little more than opportunities to enrich themselves through bribery and fraud schemes.’’
The best known suspect is Chuck Person, a former NBA star who as the associate head basketball coach at Auburn University allegedly took bribes in exchange for pushing amateur players to sign with agents when they turned professional.
The charges against Person jeopardize the tenure of Auburn’s head coach Bruce Pearl, a Massachusetts native who began his career as a manager of the Boston College basketball team.
Pearl, who was fired as the University of Tennessee’s head coach in 2011 after he lied to the NCAA about violating recruiting rules, has canceled two news conferences since the indictments were unsealed.
The three other assistant coaches facing charges have been suspended by their schools: Southern California’s Tony Bland, Arizona’s Emanuel Richardson, and Oklahoma State’s Lamont Evans.
At Louisville, interim president Greg Postel announced the discipline against Pitino and the school’s decision to place athletic director Tom Jurich on paid administrative leave, after the FBI alleged that an unidentified and unindicted Louisville coach agreed to steer $100,000 from Adidas to a top recruit.
Forbes has estimated that Louisville receives $6.78 million a year under its current deal with Adidas.
“Doing nothing would be a tacit admission of unethical and criminal behavior,” Postel said at a news conference.
The scandal could spread beyond the schools already cited since every school has a shoe contract (usually Nike, Under Armour or Adidas). There is potential for more coaching changes or suspensions; players who received money through this corrupt system could be declared ineligible or suspended.
It could seriously affect this season’s results. Arizona had an assistant coach charged by the FBI and the Wildcats are likely to be named No. 1 in the preseason poll. Whether the team and coaching staff remains intact is a question to be answered.
Vaccaro has said that when he worked for Adidas in the 1990s, he hired Jimmy Gatto, who is facing federal conspiracy charges in his role as the company’s director of global sports marketing. Vaccaro left Nike for Adidas in the ’90s.
Gatto is charged with wire fraud and money laundering conspiracies related to the Louisville allegations. Under the alleged conspiracy, the recruit who was to receive the illicit payment also was expected to sign with Adidas when he turned professional. Adidas was identified in the indictment only as “Company-1.’’
Vaccaro, who helped to create the corporate relationship between shoemakers and universities, said he never compensated an athlete to play amateur basketball. In recent years, however, he has become a leading advocate for collegiate athletes receiving compensation.
Vaccaro actively supported a federal antitrust class action lawsuit brought against the NCAA by former collegiate athletes who asserted they should be compensated for the commercial use of their names, images and likenesses. The courts ruled that the athletes should at least receive compensation covering their full cost of attending college.
In Vaccaro’s view, the latest scandal provides more evidence that the NCAA’s rules governing amateurism are outdated and punitive. He said the NCAA thrives under the existing system because it reaps enormous revenues from the March Madness tournament.
“There is no way in the world after this scandal that people don’t come to their senses and admit that this is not amateurism and allow these athletes to be paid for their names, likenesses, and images,’’ Vaccaro said. “They’ve been selling these kids names’ for years, and it starts at the top.’’Bob Hohler can be reached at email@example.com.