Report: Payments to recruits and families from shoe brands is common knowledge

The FBI Scandal has cast a looming shadow on college basketball this year, despite an interesting season and an even more interesting NCAA Tournament.

And now, a new report by Oregonlive.com is shedding light on an NCAA loophole that is allegedly “common knowledge” in AAU circles.

The loophole walks a fine line between endorsing teams and direct endorsements of players, the report says.

“But the line between throwing money and swag at elite teams and direct endorsement of promising players has blurred, particularly when the parents of top athletes appear to benefit, experts told The Oregonian/OregonLive,” the report reads.

The report prominently features Duke’s star big man Marvin Bagley III, a Wooden Award Finalist and a projected top five NBA draft pick.

The report notes that Bagley played with Phoenix Family, a Nike-sponsored team coached and directed by Marvin Bagley Jr., the Duke star’s father.

“Marvin Bagley Jr. and his wife filed for Chapter 7 bankruptcy in April 2008, during the Great Recession, listing their combined annual income at just over $44,000. Property records indicate the Bagley home was sold in 2011 at a trustee’s sale -- typically a sign of a foreclosure.”

Four years later, the Bagley’s left Phoenix for Southern California, according to the report, and recorded their home as being in the Porter Ranch neighborhood of Northridge.

The report shows homes in the neighborhood ranging from $750,000 to $1.5 million, and rent ranged from $2,500 to $7,500 a month.

All of this came out after Nike’s sponsorship of the team became public, the report said.

The Bagley’s refused to comment when asked about the sponsorship and financial situation.

This excerpt from the Oregon Live piece is especially intriguing.

As private businesses, most club teams don’t disclose their finances publicly. Tracing the flow of shoe company money is nearly impossible unless the grassroots teams choose to disclose it. Even when club teams attain nonprofit status, which normally results in some financial disclosure, there’s little data.

Observers of the grassroots system say it is common knowledge that the leagues find ways to court selected elite players, including in some cases where teams use sponsorship money to hire family members, something one defense attorney involved in the corruption scandal confirmed.

”These families are getting paid by the shoe companies,” said attorney Steve Haney of Southfield, Michigan.

That’s just a portion of what is contained in the article, which is a fascinating read. Make sure to click here and read the piece in full. Jeff Manning and Brad Schmidt did an excellent job looking into the role of shoe companies on the AAU circuit.

Mark Emmert said that they plan to look at ways to clean up collegiate basketball, and if this report is any indication, this may be one of the first places they need to look.