State rep calls for universities to investigate apparel contracts

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Allegations include payments of $100,000 from a company to the family of an unnamed player to secure his commitment to a public Kentucky school whose enrollment matches that of University of Louisville.
USAToday

State Rep. Kelly Flood of Lexington has filed a bill in the Kentucky House that would require the boards of trustees at all state universities to investigate their schools’ athletic apparel contracts, such as the deals Louisville and Kentucky have with Adidas and Nike, respectively.

Flood’s bill calls for the governing bodies to “protect the good reputation of the university and maintain the financial integrity of the contract or agreement.”

“There is no distinction between a university and its sports teams, which is why it matters that these schools’ governing boards have a formal role approving the lucrative sponsorship and endorsement contracts their athletic departments enter into,” Flood said in a release. “These contracts have grown exponentially, with some worth well over $10 million a year. The bill I am filing today simply calls for our boards of trustees to review these contracts before they’re signed, to make sure they protect the university’s good reputation and are financially viable.”

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Louisville recently signed a 10-year, $160 million contract extension with Adidas. The release from Flood’s office alludes in the first sentence to “the FBI and federal prosecutors investigating whether corporate money was illegally used to recruit college athletes.”

On Sept. 26, the FBI announced an investigation into alleged corruption, bribery and fraud in college basketball recruiting. A federal complaint alleged an arrangement of a $100,000 payment from Adidas to the family of a Louisville basketball recruit, Brian Bowen, in exchange for Bowen’s commitment to play at Louisville.

“I did my due diligence and found that our universities followed proper procurement standards, which is the good news,” Flood said in the release. “What stood out, however, is that the corporate interests included language in the contracts that protected them should the schools come under NCAA investigation. I didn’t find comparable protections for the universities if the situation was reversed and a company was under scrutiny.”

There is a clause in Louisville’s Adidas contract that would allow the apparel company to cut in half the base compensation for any year the football or basketball team is banned from TV appearances as a result of NCAA probation. It does not specify if it applies to the men’s or women’s basketball teams or both.

Louisville’s current base compensation averages $1.5 million a year – much of which went to former men’s basketball coach Rick Pitino before he was fired – and will jump to an average of $7.9 million a year beginning July 1.

A similar provision exists in Kentucky’s Nike contract. Should the men’s basketball team be banned from making TV appearances or if the Nike logo placement rights are diminished on equipment worn by the men’s basketball team or football team, Nike can terminate the contract or reduce the base pay. That pay would be cut by 70 percent for any year the men’s basketball team is affected and by 30 percent for any year the football team is affected.

Kentucky’s base compensation under its current Nike deal averages $2 million a year through the 2024-25 college sports season.

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