Thiel: As scandal ripens, Huskies, Adidas hook up

In case you thought the feds were too busy investigating the White House, the FBI had enough depth Tuesday to bring fresh indictments against two more men’s college basketball programs, Kansas and North Carolina State, in its continuing investigation of systematic bribery schemes steering players to certain schools that put money in the pockets of players from agents and sports apparel companies.

The expansion of the scandal happened at about the same time as the University of Washington proudly announced a remarkable, $119 million deal over 10 years with apparel maker Adidas to outfit all of its sports teams.

No, the FBI did not indict Washington. Yet. So there is no schedule for making of prison-grey uniforms for the Huskies program.

But in the first eight indictments in the scandal in November, the charges named two Adidas employees, James Gatto and Merl Code. Neither gentleman was mentioned Tuesday in the Huskies’ announcement or in subsequent news coverage.

Gatto was the head of global marketing for the company whose North American headquarters is in Portland, where he worked. Code, a former star at Clemson, was a contractor who worked out of South Carolina, where he coached a high-profile youth team.

The charges claim these guys helped Adidas offer $100,000 to the family of Brian Bowen, a five-star recruit out of Saginaw, Mich., sought by Louisville, an Adidas school. After charges were announced, Bowen was suspended and transferred to South Carolina, coach Rick Pitino and athletics director Tom Jurich were fired, and Gatto was put on administrative leave by Adidas.

The information that formed the basis for the charges came from a wire worn by an unnamed informant. Code and Gatto are each charged with a felony count of wire fraud.

We pass along this info just to make sure all parties know with whom the state’s entertainment/academic flagship is doing business.

Adidas is not yet guilty of anything, nor should anyone expect it should stop doing business while awaiting adjudication.

The UW, of course, is merely doing business like every other Power 5 conference school — profiting handsomely from transactions that have the added benefit of no profit-sharing with the uniformed employees who are the principal reason consumers might see the school’s choice of laundry.

The juxtaposition of the news developments contained enough irony to bend light waves.

The principal reason college basketball is up to its rims in felony charges is because numerous of its employees are using illegal means to bribe players who are otherwise unable to make money playing ball, despite the revenue capacity of the NCAA to make it so.

If the NCAA (which is, remember, a trade association, not sharia law imposed by ISIS), simply decided to pay its players through the front door instead of the back door, its executives and coaches could keep their cognac and Cuban cigars, and no one would care.

But Adidas, along with fellow apparel makers Nike and Under Armour, keep throwing money at universities for the privilege of association with the brand, not the athlete, who is fenced off from the transaction via the principle of amateurism.

The 19th century invention of European royals to keep unwashed serfs from entering their athletic contests, amateurism survives nowhere else in the world but in the U.S. Much like Adam Sandler.

In UW’s new deal starting in 2019, which inspired them to drop the Nike brand, the school will receive annually from Adidas $5.275 million in cash, $5.58 million in product and $1.1 million for marketing. And if the Huskies win Pac-12 or national championships, bonuses up to $500,000 will be paid.

That puts UW’s deal eighth nationally in the haberdashery sweepstakes, according to ESPN.

During a period when UW, despite a highly successful revival of football under coach Chris Petersen, had been running annual deficits in the athletics department, the uptick in revenues is a big deal.

But it also exacerbates the potential for corruption between schools and apparel companies at a time when it took federal intervention to finally pull back the covers for all to see the bed bugs, cooties and other varmints that sustain the enterprise.

Many fans will never care about such things, and the NCAA is hoping they’re in the jury in October, when the case goes to trial.

Meantime, the sport sits in a corner and quivers, awaiting the next release of indictments.  The reason for the pathetic posture is that the NCAA by itself is absolutely reform-proof, meaning an outside entity must impose order. The FBI doesn’t care who Bill Self is.

The Washington deal must be approved by the Board of Regents, which it undoubtedly will do. But it would be most amusing if one of its members had the courage to ask, “Outside of North Korea, where would this highly profitable system built on the backs of uncompensated labor be allowed to exist?”

Just as with reform, no good answer would be forthcoming. Unless of course, Washington really wanted to make a serious point about being a hub of innovation.