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Text messages and emails from Nike executives entered in federal court on Friday paint a vivid portrait of the inner workings of grassroots basketball.
They include detailed plans to pay then-high school stars such as Zion Williamson and Romeo Langford, line-item accounting of alleged payments to the people around eventual No. 1 pick Deandre Ayton, and an acknowledgement by a top Nike executive that “the perception and resulting reality is that we dictate where players go to school.”
Controversial lawyer Michael Avenatti produced the exhibits on Friday that supported his allegations filed earlier this week that Nike has engaged in widespread corruption and under-the-table payments to high school players via its Elite Youth Basketball League (EYBL).
The exhibits, which were filed in federal court, are brazenly honest, often authored by Nike’s own employees via corporate email and corporate cell phone texts. There are discussions of payments through a network of EYBL coaches, an apparent bill for $65,840 in handouts to people affiliated with Ayton, and a declaration from one Nike exec that the competition to land elite players is “war.”
The documents continue to show how commonly top high school players are paid to play for specific shoe companies, despite potential violations of NCAA amateurism rules. It also again calls into question why a sweeping federal investigation and two subsequent trials focused almost exclusively on Adidas, resulting in the convictions of an executive and a consultant and the cooperation of an AAU coach.
Nike’s executives have been spared federal scrutiny so far. Defense attorneys repeatedly argued at those trials Adidas wasn’t bidding against itself.
Avenatti was arrested on federal extortion charges earlier this year. Prosecutors allege he tried to “shake down” Nike by demanding they hire him to run an internal investigation of the EYBL or he would reveal incriminating details of the payouts.
Avenatii pleaded not guilty and filed a motion to dismiss the case on Wednesday, arguing he was negotiating on behalf of a client, a fired EYBL coach from California who turned whistleblower on the company.
Nike has thus far declined to address any of Avenatti’s claims, repeatedly stating it “will not respond to the allegations of an individual facing federal charges of fraud and extortion.”
How Nike does business
The exhibits released on Friday, however, are not allegations by Avenatti. They are descriptions of how Nike did business in the words of Nike’s own executives, including Carlton DeBose, the director of the EYBL. DeBose is unknown to the common fan who watches March Madness, but is considered one of the most powerful men in the recruiting ecosystem of college basketball. For years, the EYBL has showcased the majority of the top American high school basketball players, which meant DeBose and his associates had sway over how Nike distributed its resources among those teams.
Nike itself previously handed over these documents to the federal government and thus has been aware of their existence. All parties included in the documents remain employed by Nike. DeBose has been seen in July and August at marquee Nike events.
The exhibits filed include a July 30, 2016, email in which DeBose explains to Nico Harrison, Nike’s vice president of North American Basketball Operations, the state of bidding wars between Nike, Adidas and Under Armour for top talent. DeBose said it can reach $100,000 for a high school player.
DeBose also noted that “I am willing to bet that 38 of 40 teams in the EYBL had to pay a moderate to considerable ransom to families to just play in the EYBL.”
DeBose also participated in a text message exchange on July 6, 2017, with an assistant coach at the University of Kentucky, according to the motion. In the exhibits, the initials “KP” are attached to one non-DeBose number. Kentucky has an assistant basketball coach named Kenny Payne.
In the exchange with “KP,” DeBose explains that he provides money to “about 10 [Nike EYBL] coaches who are helping families to the total of about 200K annually.”
He names the coaches using first names and nicknames that couldn’t immediately be identified by Yahoo Sports. DeBose declares the business is “stressful” because he has “to do it cleanly and with a process. I’m good but it’s enough to where Lynn and Nico don’t want to know the intimate details to cover their asses.”
Nike’s global vice president for sports marketing and basketball is Lynn Merritt, who has been a longtime fixture at the company.
“So it’s a risk,” DeBose wrote, “but my everyday job is a damn risk so I’m used to it now.”
“Watch your back, bro,” KP wrote back.
The Nike emails
If DeBose was trying to keep payouts a secret, his use of corporate email while communicating with other Nike executives and EYBL coaches was a curious way of doing it.
The July 30, 2016, email from DeBose to Harrison came with the subject line, “Thoughts on Landscape.” In it, he portrayed Nike as the company doing things the right way while Adidas and Under Armour are running amok. “It has always been a thankless journey but we are now sitting ducks because our competition and enemies have decided to no longer fight us on our turf but go where we rightfully refuse to go for all of the right reasons. We have a code. Our enemies don’t.”
DeBose complained that the EYBL was under pressure because Adidas and Under Armour were using Nike’s comparatively low payouts against the company in an effort to recruit top players away. “Families and players … are taking much less to play for [Nike] which already puts a sour taste in their mouths about Nike,” he wrote.
“We are viewed as having too much influence,” DeBose added. “The perception and resulting reality is that we dictate where players go to school. In addition, it is known that we make it hard for agents and runners to attend our events and will escort them off the premises. The same agents and runners are given free reign (sic) at [Adidas] and UA events and reps for both companies frequently broker meetings and deals for families/agents.”
Yet three weeks earlier, DeBose received an email on his Nike corporate account from Mel McDonald, a middleman best known as the handler for future NBA players Ayton and Bol Bol. The email has a subject line of “Numbers” and appears to detail money spent on Ayton and people affiliated with him.
The expenses emailed by McDonald, which allegedly cover travel, cell phones and immigration costs, among other things, total $65,840. It is unclear whether McDonald was seeking reimbursement for those expenses. Ayton wound up signing with and playing for Arizona, one of the more prominent basketball programs that wear the Nike brand.
Under the heading “Dates for the money” in the “Numbers” email is a long list of apparent payouts including:
Dec. 12th - 5K in Kentucky (3 cells 2K cash)
Dec. 15th - $5K Xmas Gifts
Jan. 8th - $2940 mom $600 auntie
Feb. 9th - $5,000 for March to mom $3,500 for Bahamas to dad.
After one season at Arizona, Ayton became the No. 1 pick in the NBA draft. In April, Avenatti released documents alleging that Nike made $83,000 in payments to people affiliated with Ayton.
DeBose and McDonald did not return calls seeking comment.
Also included in exhibits released on Friday was a series of text messages from February 2017 between DeBose, Nike recruiting coordinator John Stovall and Nike EYBL manager Jamal James concerning a plan to potentially pay three players — Williamson, Langford and a player from Michigan whose name is redacted because he is still a minor. All three were still in high school, or younger, at the time.
In one group text, James wrote to DeBose seeking to find out if they would be “willing to do … whatever may be needed for the Zion/Romeo situations as well as the money we’re now going to do for the [minor] kid in Michigan.”
Langford -- 20
Zion -- 35 plus
[Minor] – 15
DeBose then wrote he was willing to spend “70” in an effort “to cripple adidas” and that everyone should “stay aggressive and I will figure out the money part.”
Later, Stovall told the others that a third party had “still not presented our new offer” to Williamson. “Only hinted at it. He did not want to put it in print which I agreed with.”
Williamson, who hails from South Carolina, played grassroots ball for multiple shoe companies and then attended Nike-flagship school Duke. He was the No. 1 pick in the 2019 draft and signed an endorsement deal with Nike.
Langford, who hails from Indiana, wound up playing under the Adidas umbrella after that company agreed in the winter of 2017 to sponsor an AAU program run by his father. He attended Adidas-sponsored Indiana and was the 14th pick in the 2019 NBA draft.
Nowhere in the text messages does it say any money actually exchanged hands between Nike and the players or anyone around them, or even if the offers were conveyed.
In an April 18, 2017, email, one veteran EYBL coach expressed concern to Nike executives over the prevalence of payouts to players and the negative attention to Nike if it became public.
“The ‘secrets’ of players and/or their families ‘getting paid’ are no longer secrets and quite frankly are spoken about rather openly,” wrote an EYBL coach. “I can’t see how this ends well for Nike or the EYBL. Some of us will be deemed guilty by association others will be found guilty of failure to supervise (think Rick Pitino).”
These are just some of the exhibits. Large portions of the documents are redacted and the motion filed Wednesday on behalf of Avenatti stated he had additional information and documentation involving Nike, beyond what was entered into the court record.
That shoe companies are paying top high school athletes to compete in their grassroots systems — all-star camps and AAU teams — is not new. But the exhibits further illustrate the commonality of the payments and the fact that players have considerable free market value before they arrive on a college campus.
This persists despite the NCAA enforcing amateurism rules that prohibit players or their families from profiting off their talents. Meanwhile, federal prosecutors have won convictions that include prison time for making a player NCAA ineligible via such a payment.
Adidas executive James Gatto and Adidas consultant Merl Code were both found guilty in 2018 of defrauding colleges by steering money to high school players and thus making them ineligible under NCAA rules. Adidas AAU coach T.J. Gassnola cooperated with authorities and pled guilty to a felony charge of conspiracy to commit wire fraud. The appeal of Gatto and Code’s conviction was filed this week, and it repeats their argument that they were operating on behalf of universities, not in an effort to defraud them.
None of the Nike employees mentioned in the motion to dismiss have been arrested or fired from the company.
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