Tags: Education | Money | code | fbi | ncaa | pitino | sole

Who Blew the Whistle on Louisville?

Who Blew the Whistle on Louisville?

Wednesday, 04 October 2017 10:24 AM Current | Bio | Archive

Last week, we saw the University of Louisville abruptly place Coach Rick Pitino on administrative leave after federal prosecutors announced they were investigating the school for a "pay to play" scheme for its NCAA basketball players. It’s alleged that Pitino and an Adidas executive conspired to pay the family of a highly-ranked high school recruit in exchange for him playing at Louisville and then to represent Adidas once he entered the NBA. University basketball teams have seen scandals like this before, but what makes this one interesting is where the allegations may have come from.

The real question in all of this is who "blew the whistle" on Louisville and others, and the answer may be Adidas’ biggest rival, Nike.

In the past, most of these problems were handled through the NCAA, not through the FBI. So why is this time different? Well, it might have something to do with Nike steadily losing market share in the "advertising space" of college basketball.

Over the past few months, we’ve seen many stock and brand analysts express concern and interest over Adidas’ strong performance in shoe sales. "Nike has 'lost' its core sneaker enthusiast customer to Adidas," said Morgan Stanley analyst Jay Sole. An analyst at Canaccord Genuity wrote in a note to investors that Adidas’ newly found market share was "causing panic internally," citing industry contacts.

Sentiments such as these may have been brewing at Nike for much longer due to their access to internal metrics and market analysis. That said, it may be how the FBI got their big break in a case that’s been open for over two years.

While it’s true that some assistant coaches associated with schools sponsored by Nike have also been subpoenaed by the FBI, this may be a classic case of shooting oneself in the foot. Nike may have noticed Adidas’ actions and called foul play, all while not realizing that they too had their hand in the cookie jar.

Let’s consider Merl Code. Code is one of the defendants in the case. He left Nike for Adidas in 2014, after previously leading Nike’s Elite Youth Basketball League program, which functions as a scouting combine for the country’s top high school prospects. The FBI’s investigation also began in 2015.

We can easily imagine a scenario where Code, after developing a "pay to play" model at Nike, had intentions to take his modus operandi over to Adidas. A disgruntled Nike employee or mid-tier executive, who knew of Code’s antics, may have seen this and decided to prevent the "competition" (Adidas) from gaining new talent.

By going to the FBI, this person would effectively be blowing the whistle on Adidas, thus preventing their recruitment through Code.

So out of all of the parties that could have tipped off the FBI: the NCAA, other coaches, players and parents who were privy to the operation but not included, or other clothing companies, who did it? Either way, it’s about time this issue is investigated and exposed so that we can finally make informed decisions on how the relationship between brands, schools, and players should be structured.

Richard S. Bernstein, CEO of Richard S. Bernstein & Associates, Inc., West Palm Beach, is an insurance advisor for high net worth business leaders, families, businesses, municipalities, and charitable organizations. An insurance advisor to many of America’s wealthiest families, he is a writer, trusted local and national media resource and expert speaker on estate planning and health insurance. Visit his website at www.rbernstein.com. To read more of his reports — Click Here Now.

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It’s about time that we can finally make informed decisions on how the relationship between brands, schools, and players should be structured.
code, fbi, ncaa, pitino, sole
Wednesday, 04 October 2017 10:24 AM
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